GPCU 520 EXAM AND PRACTICE EXAM NEWEST

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GPCU 520 EXAM AND PRACTICE EXAM NEWEST

ACTUAL EXAM 150 QUESTIONS AND CORREC

DETAILED ANSWERS (VERIFIED ANSWERS

|ALREADY GRADED A+

Risk control can assist premium auditing by

Select one:

• Reporting the existence of new operations.
• Designing product recall procedures.
• Providing laboratory analyses.
• Developing safety management programs. - ANSWER- A

Bill is an insurance producer for ABC Insurance Company (ABC). He represents only ABC when marketing insurance products. ABC compensates Bill primarily through salary, and he has no ownership rights to policy expirations. Bill is a producer in the

Select one:

• Captive agency marketing system.
• Exclusive agency marketing system.
• Independent agency marketing system.
• Direct writer marketing system. - ANSWER- D

Which one of the following statements is true regarding claim department contacts? 1 / 4

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Select one:

• Insurer claim departments perform market conduct investigations as

part of their normal activities.

• Uniform legislation exists for licensing of insurance claim adjusters.
• Consumer complaints are investigated by the state insurance

departments.

• Attorney representation guarantees a faster claim settlement. -

ANSWER- C

During advance audits or pre-audit surveys, the premium auditor can classify and observe the operations as well as

Select one:

• Verify the estimated premium base.
• Estimate individual claim reserves.
• Initiate a risk control strategy.
• Recommend additional insurance products. - ANSWER- A

The only unincorporated insurers permitted in most states are

Select one:

• Captive insurers.
• Lloyds associations.
• Alien insurers.
• Reciprocal insurance exchanges. - ANSWER- D
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Surplus share reinsurance

Select one:

• Covers policies with amounts of insurance less than the line.
• Is typically used only with property insurance.
• Requires primary insurers to share loss exposures that they could

safely retain.

• Is designed to split losses according to a set percentage. - ANSWER-

B

Workers compensation insurance benefits are established by statute. If legislation or a court decision changes these benefits, past losses must be adjusted to

Select one:

• Mandatory minimum benefit requirements.
• Current benefit levels.
• A state specific percentage of benefits level.
• Current inflation levels. - ANSWER- B

Which one of the following statements is correct?

Select one:

• Underwriting managers usually supervise ratemaking activities.
• An actuary is a person who puts a price on risk.
• Every insurance company employs one or more staff actuaries.
• Insurers rarely use the services of outside actuarial consultants. -

ANSWER- B 3 / 4

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All states attempt to ensure that continuous auto insurance coverage is available to consumers by

Select one:

• Mandating affordable rates for auto insurance premiums.
• Educating politicians and lawmakers to create an awareness that

insurance is a personal need rather than a disposable commodity.

• Restricting the rights of insurers to cancel or nonrenew personal auto

insurance policies.

• Suggesting policyholders carry minimum amounts of insurance

coverage. - ANSWER- C

Insurance pools operate either as a syndicate or through

Select one:

• Stock insurers.
• Reinsurance.
• Surplus lines insurers.
• Reciprocal insurers. - ANSWER- B

Specialty insurers such as those offering surety bonds, aviation insurance, and livestock mortality insurance usually

Select one:

• Centralize underwriting authority.
• Use automated underwriting systems.
• Refer those lines to senior underwriters.
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