C120 Underwriting Essentials Study 6-9 QUIZZES

C120 Underwriting Essentials Study 6-9 QUIZZES Which body approves policy forms for automobile insurance? - ✔✔Provincial and territorial governments The client has two minor convictions and has been licensed for less than four years. This business meets the current filed guidelines. As a precaution, the underwriter might send it to which of the following? - ✔✔The risk sharing plan Which one of the following is not important for an underwriter to determine? - ✔✔Colour of the automobile's interior What will an application for insurance allow an underwriter to assess? - ✔✔Physical hazards Why must an underwriter obtain a signed application from an applicant who becomes an insured? - ✔✔Because it is required by law Where are credit checks not done in Canada? - ✔✔Newfoundland and Labrador and Ontario John owns a pizzeria. He has hired a few drivers to deliver for his business. John requires that his drivers use their own vehicles. What insurance must John have? - ✔✔Non-owned automobile insurance What is the concern when an underwriter is inquiring about how an applicant stores its vehicles? - ✔✔Peril of theft What is Canadian Loss Experience Automobile Rating (CLEAR) based on? - ✔✔Cost of repairs and passenger injury Why is the manufacturer's suggested retail price (MSRP) considered unfair? - ✔✔Most collision claims result in repair rather than replacement of the vehicle What is the definition of pure premium? - ✔✔The portion of the total premium that is used to pay expected losses What does it mean for the insurer if the premiums are too low? - ✔✔The insurer will pay out more money than it takes in and will go out of business. What is the definition of underwriting loss? - ✔✔The amount of money an insurance company loses as a result of its insurance operations Which one of the following is true about unallocated loss adjustment expenses (ULAE)? - ✔✔These are costs that cannot be attached or attributed to a specific claim The mathematical theory of the law of large numbers means what? - ✔✔The larger the sample size, the more correct the results Which one of the following statistics is not required by the actuarial department? - ✔✔Market conditions and competition Bob is an actuary who has decided to look at various rating exposures for the local movie theatre. Which one of the following is not an exposure that he should consider? - ✔✔Type of film shown A commercial automotive building has many unique exposures. What would the type of rating for such a risk be called? - ✔✔Schedule rating When is class rating used? - ✔✔When statistics can be gathered on a large number of risks that share common characteristics What are the factors that allow for an underwriter to have some degree of flexibility when it comes to rating a risk? - ✔✔The type of insurance and the size of the risk Which of the following statements is false when discussing the benefits of an underwriter having good relationships with