CU Risk Assessment and Selection 2

Question 1

Which factor is considered a 'subjective' hazard in underwriting risk assessment?

Accepted Answer

The attitude and character of the insured toward risk

Answer

The age of a building's electrical system

Answer

The geographic location of the property

Answer

The construction type of a structure

Question 2

An underwriter reviewing a commercial property account notices the insured has filed 4 claims in 3 years, all for water damage. What underwriting action is MOST appropriate?

Accepted Answer

Request a loss control inspection focused on plumbing and drainage systems

Answer

Decline the account immediately without further review

Answer

Accept the account with no modifications

Answer

Refer the account to a specialty market without investigation

Question 3

The insurance concept where an underwriter considers the entire book of business rather than individual risks is known as:

Accepted Answer

Portfolio underwriting

Answer

Risk segmentation

Answer

Individual risk rating

Answer

Adverse selection management

Question 4

A 'non-concurrent' policy condition exists when:

Accepted Answer

An insured has multiple policies with different terms covering the same risk

Answer

Two insurers share the same policy period

Answer

A policy covers multiple locations under one premium

Answer

The policy limit equals the value of the insured property

Question 5

Which underwriting tool provides the MOST comprehensive view of an applicant's personal insurance history?

Accepted Answer

CLUE (Comprehensive Loss Underwriting Exchange) report

Answer

ISO ClaimSearch

Answer

MVR (Motor Vehicle Report)

Answer

Inspection report

Question 6

In underwriting, 'risk transfer' is best described as:

Accepted Answer

Shifting the financial consequences of a loss from one party to another through insurance

Answer

Moving a risk from a preferred market to a standard market

Answer

Transferring underwriting authority from a junior to a senior underwriter

Answer

Reassigning a risk from one underwriting territory to another

Question 7

An underwriter applies a 'schedule rating' modification to a commercial account. This modification is based on:

Accepted Answer

The insured's specific characteristics that differ from the average risk in the class

Answer

The overall loss ratio of the insurer's book of business

Answer

Industry-wide loss statistics for the class code

Answer

The producer's commission level