CPCU 520 Exam 3 Latest Versions Chartered Property

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CPCU 520 Exam (3 Latest Versions) /Chartered Property Casualty Underwriter Exam/ featuring accurate and verified questions covering insurance operations, underwriting, claims handling, marketing, risk management, and the regulatory environment. Designed for insurance professionals pursuing CPCU designation through The Institutes.

VERSION 1

One of the functions of reinsurance is to increase large-line capacity. Which one of the following best describes this function from the perspective of a primary insurer?

Select one:

• To withdraw from a market segment in a geographic area
• To assume a loss exposure with potential financial

consequences that are higher than its financial condition would otherwise permit

• To limit liability for a single loss that occurs over more than

one policy period

• To reduce the financial consequences of a single catastrophic

event that causes multiple losses - ANSWER-B. To assume a 1 / 4

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loss exposure with potential financial consequences that are higher than its financial condition would otherwise permit

While developing goals for its book of business, an insurer's staff underwriter decides to increase its market share of workers compensation insurance in the construction industry. This type of underwriting activity is known as

Select one:

• Developing underwriting guides.
• Formulating underwriting policy.
• Reviewing and revising rating plans.
• Providing assistance to policyholders. - ANSWER-B.

Formulating underwriting policy.

Which one of the following entities has as its vision to provide one place for producers to go to meet all aspects of the producer licensing and appointment process using an electronic communication network?

Select one:

• The Insurance Services Office 2 / 4

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• The National Association of Insurance Commissioners
• The National Insurance Producer Registry
• The Federal Insurance Office - ANSWER-C. The National

Insurance Producer Registry

In which one of the following ways can the premium auditor contribute to the risk control function?

Select one:

• Confirming values of inventories, vehicles, and contractors'

equipment lists

• Providing information about unsafe procedures or working

conditions

• Convincing an insured of the accuracy of the audit
• Noting any discrepancies between classifications on the

policy and those proper for the operation - ANSWER-B.Providing information about unsafe procedures or working conditions

Tobias, a successful producer with Barnley's Insurance Company, is struggling with an intricate quote on homeowners coverage for his insured, Hanna. Hanna not only has substantial collections of guns and silverware, but also has a small farm 3 / 4

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located at her premises. Which one of the following individuals from Barnley Insurance Company could provide assistance and support to Tobias?

Select one:

• The actuary
• Staff underwriter
• The line underwriter
• The claims representative - ANSWER-C. The line

underwriter

Which one of the following statements is correct with respect to the premium auditing process?

Select one:

• Vacation pay, tool allowances, bonuses, commissions, and

sick pay cannot be included in payroll for premium calculation purposes.

• Before they look at the books, premium auditors observe the

operation, compare it to similar businesses, and assess management.

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