AD BANKER AL PC PRACTICE COMP

AD BANKER AL P&C PRACTICE COMP EXAM QUESTIONS & ANSWERS RATED

100% CORRECT

Which rating method listed below is established by the underwriter?

• Manual rating
• Retrospective rating
• Individual rating
• Judgment rating – CORRECT ANSWER - D.

Judgment rating is the Only rating method that is determined by the underwriter. All other rating methods are determined by the actuarial department of the insurance company. 1.11 The type of insurance company in which the policyholder is considered an owner, with the right

to vote and share in the profits, is a:

• Fraternal benefit society
• Mutual company
• Stock company
• Risk retention group – CORRECT ANSWER - B.

A mutual company is mutually owned by the policyholders...

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A morale hazard: 1 / 2

• Is being dishonest on an application or claim form
• Is the extent to which one may be affected by a peril
• Is a physical condition that increases the probability of loss
• Arises through an individual's carelessness or irresponsible actions – CORRECT

ANSWER - D.

A morale hazard refers to a persons behavior, or a persons morale...

A good example of Risk Reduction might be:

• When one takes action to minimize the severity of a potential loss
• Insuring only those risks that threaten the financial stability of the insured
• The transfer of the risk to an insurance company
• The elimination of the exposure to a specific risk – CORRECT ANSWER - A.

Risk Reduction involves applying techniques...

Insurance binders are:

• Limited to personal lines risks
• Valid for 30 days
• Temporary or interim insuring agreements
• Required to be written – CORRECT ANSWER - C.

An insurance binder is considered to be...

Which of the following would NOT be found in the policy declarations page?

• Limits of insurance, deductibles, amount of premium
• A description of the property to be insured
• A legal representative in the event of the insured's death
• Insurers promise of protection – CORRECT ANSWER - D.

The insurers promise of protection would be found...

The right to request an appraisal belongs to:

• Both answers
• The insurance company
• Neither answer
• The insured – CORRECT ANSWER - A.

When the insured and the insurer cannot agree...

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