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8 Cards in this Set
- Front
- Back
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Which one of the following activities is generally that of a line underwriter?
a. Evaluating loss experience b. Conducting education and training c. Developing coverage forms d. Classifying accounts |
d. Classifying accounts
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Insured Cindy Harris always leaves her car unlocked hoping it will be stolen so she can collect on her insurance policy. This attitude of carelessness or indifference on Cindy's part is an example of which one of the following terms?
a. Moral hazard b. Morale hazard c. Fraud d. Conversion |
b. Morale hazard
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Capacity is one major constraining factor on underwriting policy. Which one of the following would be considered acceptable premium-to-surplus ratio?
a. 3 to 1 b. 4 to 1 c. 5 to 1 d. 6 to 1 |
a. 3 to 1
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From what source do underwriters obtain most information in underwriting an account?
a. From producers b. From the application c. From loss exchange databases d. From competitors and public carriers |
b. From the application
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Fred Fontaine is an insurance producer who knows the types of accounts his insurer is interested in writing. Fred submits applications that are of the quality the insurer is usually willing to accept. He successfully performs account selection before submitting the account to the insurer therefore saving the insurer from having to evaluate accounts that would ultimately be rejected.
Which one of the following best describes Fred's underwriting role? a. Fred is a line underwriter. b. Fred is a staff underwriter. c. Fred is a front-line underwriter. d. Fred is an executive underwriter. |
c. Fred is a front-line underwriter.
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The underwriting authority granted to a line underwriter typically varies by all of the following, EXCEPT:
a. Position b. Grade level c. Experience d. Communication skills |
d. Communication skills
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The primary purpose of underwriting is to
a. Ensure that the risk transfer is equitable and the insurer is able to develop and maintain a growing, profitable book of business. b. Create policy language that reflects rate accuracy, equity, and adequacy. c. Formulate and implement underwriting policy. d. To investigate claims and satisfy the obligations of the insurer to the policyholder as agreed to in the insurance policy. |
a. Ensure that the risk transfer is equitable and the insurer is able to develop and maintain a growing, profitable book of business.
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Implementing underwriting decisions generally involves all the following steps, EXCEPT:
a. Communicating the decision to the producer and other insurance personnel b. Developing appropriate documentation c. Recording information about the policy and the applicant for accounting, statistical, and monitoring purposes d. Distributing individual policies that compose the book of business over producer, territory, state, or region among the various lines and classifications |
d. Distributing individual policies that compose the book of business over producer, territory, state, or region among the various lines and classifications
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