Reference no: EM133090610
1. A table of limits is used by an insurer
(A) to notify an insured of the building limits on a policy.
(B) to assign maximum authorized policy limits for risks of varying types.
(C) to identify the statutory conditions of an automobile policy.
(D) to list claim frequency numbers for a particular line of business.
2. An underwriter is best described as an insurance professional who
(A) accepts or rejects risks.
(B) implements an insurer's strategic plan.
(C) invests the capital of an insurer's shareholders.
(D) All of the above
3. Which of the following is an indication of a soft market?
(A) Premium rates are below profitable levels
(B) Rising premiums
(C) A reduction in market capacity
(D) The rejection of normally acceptable risks
4. The term contra proferentum means that
(A) the Civil Code of Quebec applies to the policy.
(B) following a loss, an insured will be returned to the same financial position enjoyed immediately before the loss.
(C) 100% insurance to value applies to the policy.
(D) any dispute caused by ambiguity in a policy wording will be decided against the insurer.
5. Severity of loss refers to
(A) the ratio of the number of losses to the number of exposure units.
(B) the premium required to pay claims.
(C) the average size of losses.
(D) a policy's statutory conditions.
6. Examples of technical skills which should be developed and practiced by an underwriter include
(A) communication and analytical skills.
(B) loss development and reinsurance skills.
(C) analytical and math skills.
(D) communication and organization skills.
7. On a commercial lines policy, the person(s) responsible for payment of the premium is/are
(A) all persons listed as named insured.
(B) the person listed first as named insured.
(C) the person listed last as named insured.
(D) the additional named insured.
8. Which of the following should be investigated by an underwriter when assessing a new risk?
(A) Losses which were denied by a prior insurer
(B) Losses which were less than the deductible limit and paid by the insured
(C) Losses on previously owned locations which were paid by a prior insurer
(D) All of the above
9. A policy that becomes effective retroactively after the applicant submits the application is commonly referred to as
(A) back-dated.
(B) under-insured.
(C) future-dated.
(D) re-insured.
10. Which of the following normally accompanies a homeowner application and indicates the amount of insurance required on the dwelling?
(A) Table of limits
(B) Insurance contract
(C) Valuation guide
(D) Statement of values
11. An expert system is a computer software program used
(A) mainly for large commercial-lines risks.
(B) for risks that have unique characteristics.
(C) to guide underwriters through a risk analysis.
(D) all of the above
12. Tenants Legal Liability
(A) protects a tenant against his or her liability for damages caused by an insured peril to the premises he or she occupies.
(B) protects a property owner against his or her liability for damages caused by an insured peril to the premises he or she occupies.
(C) protects a tenant against damage caused by a landlord to his or her property in the premises occupied.
(D) protects a property owner against damage he or she caused to a premises occupied by a tenant.
13. The four stages of fire are
(A) incipient, smouldering, combustion, and heat.
(B) incipient, smouldering, flame, and heat.
(C) incipient, flame, heat, and smoke.
(D) incipient, smouldering, heat, and toxic.
14. Civil Law may impose liability through
(A) negligence, statute law, or breach of contract.
(B) negligence, tort, or breach of contract.
(C) negligence, tort, or nuisance.
(D) negligence, nuisance, or breach of contract.
15. The ABC rule of negligence requires which three factors be established? (A) A duty of care exists, the duty was breached, and there is a law suit pending (B) A duty of care exists, there is a law suit pending, and there is bodily injury to the third party (C) A duty of care exists, the duty was breached, and the breach caused the damage (D) A duty of care exists, there was a failure to act, and the failure caused the damage
16. For the purposes of establishing an occupier's duty of care, which of the following would NOT be considered an invitee?
(A) A neighbour whom you invite to accompany you to the theatre
(B) A client who has an appointment in your office to discuss his insurance needs
(C) A shopper who enters the store you own to make a purchase
(D) A shopper who enters the store you lease to make a purchase
17. A personal umbrella policy is recommended when
(A) liability limits of underlying policies are not high enough.
(B) drop-down coverage is required for additional exposures.
(C) there is a need to broaden territorial limits.
(D) all of the above
18. The purpose of the Non-owned Automobile policy is to
(A) provide coverage for leased vehicles to the lessor.
(B) provide coverage for temporary substitute automobiles being driven by employees.
(C) provide protection for an employer whose employees drive vehicles not owned by the employer on behalf of the employer.
(D) provide coverage for leased vehicles to the lessee.