Insurance Underwriting – Non-UK (WUE) Practice Exam

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• If turnover is $15,000,000 and the rate is 0.5‰, what is the premium for a $5,000,000 indemnity limit?
• In reinsurance, which arrangement transfers a fixed percentage of every risk from the ceding insurer to the reinsurer?
• Which item is typically excluded from a theft policy?
• An insurer has arranged reinsurance on a risk. This means that the insurer has:
• A hazard can be defined as
• If an engineering firm wants to cover itself against third party claims for personal injury or damages arising from its operations, it will need to take out a:
• The condition that reduces claims payments in proportion to any underinsurance is known as:
• In introductory policy text, which term describes the opening section?
• Extended warranty insurance primarily covers which risk?
• Breach of a condition precedent to liability gives the insurer the right to
• Which factor is NOT among the two most important underwriting factors for fire insurance?
• In the pooling of risks, the law of large numbers helps insurers with making reliable:
• Premium on a household policy with sum insured $200,000 and rate of 1.5 per mille is
• At a 2.5% rate, what is the premium for $3,000 of coverage?
• General exclusions common to all policies are best described as which type of exclusions?
• Which term best describes the top level of the information pyramid?
• A franchise in insurance means
• What is the most common way for an insurer to get risk information?
• If underwriting capacity decreases, price of insurance will?
• In risk management terms, which statement best defines a hazard?
• Which part of a policy personalises the cover?
• Which term describes the ratio comparing claims to booked premiums?
• With a franchise of 2,500, a claim of 2,400 would be paid by the insurer
• Which option describes the items that are optional extensions under Business Interruption?
• What is a clause requiring removal of sawdust daily in a fire policy?
• In the given example, what percentage of the risk is retained by the insurer?
• In a tiered premium formula where the first 200,000 is charged at 1.5% and the excess at 1.0 per mille, what does this illustrate?
• Who would be appointed to make initial enquiries about the loss and then to ensure that an accurate claims settlement is achieved?
• In a fire policy, the daily sawdust removal clause is described as what?
• What is the main rating factor for products liability insurance?
• Which statement best describes stop loss reinsurance?
• Omitting a material fact on a public liability form is considered
• This form of issuing a policy is called a:
• Which component confirms the exact cover provided to the insured?
• Which formula represents the incurred loss ratio?
• In underwriting terminology, policy terms and conditions are sometimes referred to as
• This type of policy is usually based on the level of benefits selected and the premiums tend to increase with the age of the policyholder.
• A clause requiring prompt submission of a claim is an example of:
• Where would someone find how to make a claim in their policy wording?
• An insurance policy shows a gross premium of $1,000, settled claims of $300 and outstanding claims of $200. What is the incurred loss ratio?
• Which of the following, in normal legal definition is considered a minor contract term but, in insurance terms goes to the heart of the contract and must be complied with?
• When underwriting employers' liability insurance, which factor is considered the primary rating driver?
• Which document is used by underwriters to obtain key information about the risk?
• What type of policy is sometimes issued on a short-period basis?
• Which trio correctly represents the components of the combined operating loss ratio?
• General exclusions common to all policies are called which of the following?
• Which peril is NOT usually excluded under household buildings insurance when the property is unoccupied for over 30 or 60 days?
• Who is responsible for providing information that could affect risk classification?
• What type of reinsurance would a liability account manager take out to protect against large losses?
• Which item is not included in the ROCE calculation example provided?
• Latent claims are claims not known at policy issue but may surface later. True or false?
• If the premium hasn't been paid but is intended, the contract is which of the following?
• Which insurance class is most influenced by latent claims affecting risk premium?
• Uninsured working expenses under business interruption include which item?
• If the premium rate is 2.5%, what is the premium for a $1,000 insured?
• At a 2.5% rate, what is the premium for $4,000 of coverage?
• When would an insured use a 24/7 helpline?
• In personal accident insurance, what is the main rating factor?
• What is the risk premium? (Expected claims = $250,000; IBNR = 10%)
• Which insurance class is most affected by electrical breakdown risk?
• Which statement about renewal is most accurate?
• At a 2.5% rate, what is the premium for $50,000 of coverage?
• A material damage warranty is usually automatically imposed under which type of policy?
• Which describes the primary purpose of reinsurance for an insurer?
• At a 2.5% rate, what is the premium for $6,000 of coverage?
• At a 2.5% rate, what is the premium for $25,000 of coverage?
• For which risk are insurers most likely to request the completion of a supplementary questionnaire?
• What ratio is most likely used to assess the quality of profits excluding investment income?
• Where are the insured perils listed in a property insurance policy?
• In the policy examples, which itemization describes what is part of Building?
• What effect on the insurance market cycle does a reduced capacity to accept risks have?
• Excess of loss reinsurance can be written on which basis?
• What does the loss ratio measure?
• Short-period premium is usually charged when?
• Which party typically purchases an extended warranty policy on electrical goods?
• In insurance terminology, a risk too serious to be insured is called a
• Which principle ensures that all terms are agreed before the contract is binding and that the documentation is issued promptly?
• Which cover under a Household insurance policy covers the reasonable cost of alternative but similar accommodations while the premises are uninhabitable due to an insured peril?
• When arranging a contract of insurance, what is the payment of the premium known as?
• With surplus reinsurance, the insurer:
• What would be the annual premium for a $10,000,000 indemnity limit when turnover is $25,000,000 and the rate is 0.8 per mille?
• An extended warranty insurance policy commonly excludes risks covered by which policy?
• Under a cancellation condition, what are usually the minimum number of days an insurer must give when sending written notice of cancellation?
• What is the term for failing to disclose information that would influence an underwriter's decision?
• What type of policy should the supermarket have in effect to deal with this loss?
• Which type of insurance covers financial losses due to interruption of business operations?
• What term describes the premium paid at policy renewal?
• Which policy is specifically designed to cover construction projects and associated works for material damage?
• Besides building use, what is the main underwriting factor for glass insurance?
• Which document serves as evidence that insurance has been granted, pending the issue of a new policy or endorsement?
• Which section of policy wording would you consult to understand the claims process?
• What does per mille denote?
• When a quotation is issued, cover is considered to be:
• The top level of the information pyramid is:
• At a 2.5% rate, what is the premium for $100,000 of coverage?
• Security, property construction, and vehicle condition are examples of which hazard?
• Which document confirms the existence of an insurance contract?
• Which concept explains why insurers can predict losses more accurately as the number of similar risks increases?
• What is the primary function of an uninsured loss recovery service?
• A very large excess is known as a
• Lapse flow analysis relates to which type of business?
• What term describes funds set aside to pay future claims?
• If expected claims are $300,000 and IBNR is 12%, what is the risk premium?
• A return on capital employed of 25% means which of the following?
• At a 2.5% rate, what is the premium for $12,000 of coverage?
• Which of the following is a reason to issue a cover note?
• Which items are included in a quotation pack?
• What is the effect on the premium when choosing a voluntary excess?
• Which item is NOT typically included in a quotation pack?
• A supplementary questionnaire is typically requested for which class of insurance?
• Under subrogation, when can the insurer exercise its rights?
• If a receipt submitted for a claim is tampered with, the insurer is most likely to
• Under a household insurance policy, how does the insurer generally discourage claims for items that do not exist?
• The term used to describe a risk that has been passed to a reinsurer is:
• Which of the following is achieved by the complete and final agreement of all terms between the insured and the insurer by the time that they enter into the contract, with the contract documentation provided promptly thereafter?
• Which type of reinsurance is used by insurers to protect their loss ratio?
• A document issued as evidence that insurance has been granted, pending the issue of a new policy or endorsement is known as a
• What is the period of cover for a single policy from inception to its first renewal called?
• At a 2.5% rate, what is the premium for $10,000 of coverage?
• Reinsurers want to increase investment at what stage in the market cycle?
• Which of the following correctly shows the three elements of the combined operating loss ratio?
• Which statement best describes a material factor in underwriting?
• An employee falls from a faulty ladder and incurs medical costs $650 and lost wages $1,500. If the employer is liable, how much is the Employer's Liability policy likely to pay?
• Which policy covers a solicitor for loss of profits after an insured loss?
• An insurer will usually require an examination of financial accounts when considering a proposal for which class of insurance?
• Mary has a building policy with sum insured $100,000 and a franchise of $2,500. How much would insurers pay if she submitted a claim for $5,500?
• If the insured fails to meet a condition precedent to liability, the insurer will
• What do insurance underwriters need to consider when assessing the exposure caused by a property risk?
• For theft of shop stock to be covered, what is usually required?
• What policy covers an accountant's liability for staff errors/omissions?
• In risk premium, the term 'frequency' refers to what?
• If a loss ratio is 120%, how much is paid in claims per $100 of premium?
• Which measure combines claims costs and underwriting expenses to assess underwriting profitability, excluding investment income?
• During renewal, which action is typically performed by the insurer?
• Utmost good faith is usually:
• Who would take out an extended warranty insurance policy on electrical goods?
• Which professional handles initial loss enquiries and oversees settlement?
• Fire doors and resistant walls are considered what type of hazards in underwriting?
• The declaration on a consumer's proposal form is intended to do which of the following?
• A ship explosion in the Atlantic is an example of which risk profile?
• In the event of an increased capacity for underwriting risks, the price of insurance would be expected to:
• At a 2.5% rate, what is the premium for $15,000 of coverage?
• The premium base in a public and products liability policy is typically:
• If a risk is valued at $500,000 with an estimated maximum loss of 60%, what amount of the risk would the insurer be able to retain?
• This section of the policy includes the name of the insurer and, in some cases, the address and company logo:
• With a capital employed of $2,000,000, an ROCE of 12% yields what profit?
• Most money policies exclude dishonesty by an employee unless discovered within how many days?
• For which class would insurers request a supplementary questionnaire rather than a survey?
• Who has an obligation to renew an insurance policy at the end of the term?
• Who has an obligation to renew an insurance policy at the end of the term?
• Which occurrence is usually excluded under travel insurance?
• Excess of loss reinsurance is typically written on which basis?
• How do fraudulent claims affect an insurer?
• The insured's obligation to mitigate loss after a claim is best described as which of the following?
• During the 2024 underwriting year, what was the total premium paid?
• The benefit received by one party in return for a promise of performance of an act of another is:
• Professional indemnity insurance is usually made on what basis?
• A common exclusion to a theft policy is:
• Insurance policies are most commonly issued in a:
• Which section of the policy typically identifies the insurer's identity and branding?
• Failure to tell the insurer something important is called?
• What is the premium for a sum insured of $230,000 when the first $200,000 is charged at 1.5% and the remaining $30,000 at 1.0 per mille?
• Implied conditions such as insurable interest and utmost good faith are:
• Which risk category is most likely to trigger a supplementary questionnaire due to complexity?
• The amount paid to an insurer to obtain cover is known as the:
• When is an arbitration clause typically used in an insurance policy?
• The insured's duty to minimize a loss is an example of which type of contract condition?
• With a commercial combined insurance contract, what is most likely to indicate a moral hazard?
• Which type of reinsurance protects an entire account from large losses?
• What is the principal consideration when underwriting employers' liability insurance for a company?
• Why would an insured choose a voluntary excess?
• At a 2.5% rate, what is the premium for $2,000 of coverage?
• What does a return on capital employed (ROCE) of 10% indicate?
• The statement signed by the proposer confirming that the information supplied is true and correct is a:
• Glass insurance typically excludes breakage caused by
• What is the term for the proposer’s duty to disclose material information in an insurance contract?
• Why is it important that an insurer accurately reserves for claims?
• At a 2.5% rate, what is the premium for $5,000 of coverage?
• Professional indemnity insurance is usually made on what basis?
• An insurer calculates a claims loss ratio by dividing the:
• What characterizes a hard market in insurance?
• In a legal expenses insurance policy, which costs are normally covered?
• Which term describes exclusions common to all general insurance policies (such as war and terrorism)?
• An insurer is embarking on a new class of insurance. Which type of reinsurance should it arrange?
• The policy feature that reduces claims payments in proportion to underinsurance is called:
• What is the purpose of a cover note?
• Which statement best describes the purpose of endorsements in an insurance policy?
• Which statement best describes the premium calculation formula?
• Some general insurance exclusions (e.g., war and terrorism) are common to all general insurance policies and are called:
• If Insurers X and Y have ROCE of 6.5% and 8.5% respectively, this suggests:
• Which of the following is a pecuniary insurance?
• Which clause allows the insurer to recover its outlay from a third party?
• What does IBNR stand for in claims reserving?
• Which policy protects professionals such as accountants against liability for professional services?
• Calculate ROCE given premium 350,000, claims 150,000, and capital 1,000,000.
• The insurer's quotation represents the:
• What is the principal rating factor when underwriting employers' liability insurance?
• What information does an underwriter use to assess profitability of a class of business?
• Another name for the preamble in an insurance policy is:
• In reinsurance, what does 'retention' refer to?
• An excess accepted by the insured in return for a premium discount is known as:
• Which risk is typically covered by public liability insurance policy?
• In policy terms, utmost good faith is described as what type of condition?
• In insurance, policy terms and conditions are sometimes referred to as
• If a claim is 1,350 with a 300 excess, the insured receives
• Why are material circumstances important to underwriters?
• An insurance policy can best be described as:
• Which policy feature activates when a claim exceeds a threshold and pays out in full?
• At a 2.5% rate, what is the premium for $20,000 of coverage?
• Business interruption insurance usually does NOT arise from:
• What is the legal significance of an insurance policy?
• Apart from the destination, what is the most important underwriting factor for annual travel insurance?
• Which is a method of collecting premium?
• Insurers X and Y have returns on capital employed of 6.5% and 8.5% respectively. This tends to suggest that:
• In an insurance contract, the value exchanged between the insured and insurer is known as
• Which statement best describes Return on Capital Employed (ROCE) in insurer performance?
• In percentage terms, what is the insurer's estimated maximum loss for any one fire?
• In insurance contracts, a warranty is a promise by the insured that a fact is true and essential to the contract.
• Which statement best describes a franchise in an insurance policy?
• What document proves insurance exists for compulsory insurance?
• Which policy is usually sold at the point of sale, providing immediate protection at purchase?
• For fire insurance underwriting, the two most important underwriting factors are:
• At a 2.5% rate, what is the premium for $8,000 of coverage?
• An event with low frequency but high severity is described as which of the following?
• If a loss ratio is 115%, how much is paid in claims for every $100 of premium?
• What is the primary purpose of reinsurance?
• Which policy is usually sold at the point of sale?
• Other than the use of the building, what is the main underwriting consideration for glass insurance?
• If the proposer changes the vehicle engine after a quote, what is the insurer's obligation?
• At a 2.5% rate, what is the premium for $24,000 of coverage?
• Meredith has a personal accident and sickness policy with a franchise of seven days for sickness cover. If she is off work for ten days, what will her insurer pay?
• If turnover is $30,000,000 and the rate is 0.5‰, what is the premium for a $5,000,000 indemnity limit?
• In underwriting, which statement best describes a hazard?
• Calculate the premium for a household policy with sum insured $150,000 and rate 2.0 per mille.
• Excess of loss reinsurance primarily protects an insurer against which type of loss?
• When a quotation is issued, the status of cover is: