CPCU 520ACTUAL EXAM COMPLETE WITH 130
QUESTIONS AND WELL -VERIFIED CORRECT
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CASUALTY UNDERWRITER LATEST 2025 EXAM
A crucial responsibility of the premium auditing function is to classify insured exposures correctly. Underwriting must establish the classifications - ANSWER- When the policy is issued.
Most insurers give some producers the authority to pay claims up to a certain amount. In this role, producers function much like an - ANSWER- Inside claim representative.
Supervisors and managers often use a diary or suspense when handling claims as - ANSWER- Reminder systems to review claim files.
Liability policies cover insureds for compensatory damages an insured owes to a third party. Compensatory damages normally covered by the policy include - ANSWER- Pain and suffering and out-of-pocket expenses claimed up to the policy limit.
To determine if a person is a named "insured" under a policy, the claims representative would generally need to review - ANSWER- The Declarations section and Definitions section.
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Benjamin has his home insured with Westfork Mutual under an HO-3 policy for $100,000. He is the named insured on the policy. There are three other residents of
the home: Maria, Benjamin's mother; Daniel, his nephew; and Cian, a family
friend. An accidental fire causes damage to the home and to personal property of all four occupants. Benjamin reports the loss to Westfork and Fatima, a claim representative, is assigned the claim. Which one of the following will most likely be Fatima's principal concern when analyzing coverage for the loss? - ANSWER- Whether Maria's, Daniel's, and Cian's property would be covered
Which one of the following statements is correct regarding actuarial services? - ANSWER- Regulators sometimes require insurers to provide a consulting actuary's opinion verifying the accuracy and reasonableness of the staff actuaries' work.
Given the following data and using the loss ratio ratemaking method, calculate the insurance rate change (rounded).Expected loss ratio63% Actual loss ratio55% Incurred losses$600,000 Earned premium$1,250,000 Expenses45% - ANSWER- The insurance rate change is -13 percent, equal to (the actual loss ratio - expected loss ratio) / expected loss ratio.
(55-63)/63 = -13%
As a key step in the process of developing insurance rates, actuaries adjust the premium and loss data that they have collected from past years. Which one of the following statements concerning this adjustment process is true? - ANSWER- Loss development factors reflect growth in incurred reported losses and in incurred by not reported (IBNR).
If rates vary by territory and/or class, they are reviewed after the calculation of the overall rate change. Territorial relativities can be determined by comparing the estimated loss ratio for each geographic territory to the statewide - ANSWER- Average loss ratio.
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Which one of the following statements is correct with respect to ratemaking for different types of insurance? - ANSWER- A five-year experience period is used almost universally for fire insurance because it is required by law in many states.
Unusual rate fluctuations could result from occasional large losses, whether from large individual losses or from an accumulation of smaller losses from a single event. In liability insurance, these fluctuations are controlled by using - ANSWER- Only basic limit losses.
Liability insurance coverage is provided at various limits of coverage. Which one of the following statements is true regarding charges to increase limits above the basic limit? - ANSWER- Higher limits can require a portion of the coverage to be reinsured, and the additional expense must be included in the rate.
The purpose of loss reserve analysis is to determine whether the carried loss and loss adjustment expense reserves can be expected to adequately cover the losses that have been incurred but not yet paid. Which one of the following would participate in loss reserve analysis on behalf of potential investors or creditors? - ANSWER- Rating agencies
The main components of an insurer's bulk (or aggregate) loss reserves are reserves for unreported claims plus - ANSWER- Reserves for losses that have inadequate case reserves and reserves for claims that have settled and then reopened.
Customer Marna reported a slip-and-fall accident to a store owner who denied responsibility stating she should have been aware of the condition of the premises.Nine months later, Marna sued the store owner for $30,000 related to her injuries.The insurer was not aware of the incident until legal action was pursued. Prior to the legal action, the insurer would likely have used which one of the following types of loss reserves to account for this claim? - ANSWER- Pure incurred but not reported loss reserves
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