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

Subjective hazard refers to the mental attitude or character of the insured that increases the likelihood of loss, such as carelessness or dishonesty.

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

A pattern of similar losses warrants a targeted loss control inspection to identify and potentially correct the underlying cause before acceptance or modification.

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

Portfolio underwriting means evaluating how individual risks contribute to the overall balance and profitability of the insurer's entire book of business.

Question 4

A 'non-concurrent' policy condition exists when:

Accepted Answer

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

Answer

Non-concurrent policies occur when multiple policies covering the same risk have different terms, conditions, or exclusions, potentially creating coverage gaps or disputes.

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

A CLUE report provides a 7-year history of personal property and auto insurance claims, giving underwriters a detailed picture of the applicant's loss history.

(CU) Certified Underwriter Practice Test

(CU) Certified Underwriter Practice Test

CU Risk Assessment and Selection 2