#1
Which of the following best describes insurance underwriting?
Assessing risk and determining premiums
Selling insurance policies
Handling insurance claims
Investing insurance premiums
#2
What is the primary goal of insurance underwriting?
To maximize profits for the insurance company
To minimize claims payouts
To ensure that risk is adequately assessed and priced
To deny coverage to high-risk individuals
#3
Which of the following factors is typically NOT considered when assessing an applicant's risk in insurance underwriting?
Occupation
Credit score
Gender
Health condition
#4
What is the primary purpose of a medical exam during the underwriting process for life insurance?
To diagnose medical conditions
To verify the applicant's identity
To assess the applicant's health and medical history
To determine the applicant's occupation
#5
What is 'loss ratio' in insurance underwriting?
The percentage of premium income spent on claims
The total amount of claims paid by the insurer
The ratio of claims to premiums written
The percentage of claims denied by the insurer
#6
In insurance underwriting, what is the purpose of 'actuarial tables'?
To determine the cost of insurance policies
To calculate the expected lifespan of policyholders
To assess the risk of insuring certain demographics
To estimate the probability of future events
#7
In insurance underwriting, what does 'loss reserve' refer to?
The amount of money set aside for future claims payments
The total amount of claims paid by the insurer
The ratio of claims to premiums written
The percentage of claims denied by the insurer
#8
Which of the following factors is NOT typically considered during the underwriting process?
Age
Occupation
Favorite color
Medical history
#9
What is meant by 'adverse selection' in insurance underwriting?
The process of rejecting all insurance applications
The tendency for higher-risk individuals to seek insurance more actively
The practice of offering discounts to low-risk individuals
The act of underpricing insurance policies
#10
What is meant by 'underwriting capacity' in insurance?
The maximum number of policies an underwriter can issue in a day
The financial resources available to an insurer to handle risks
The minimum amount of coverage required for a policy
The process of evaluating an applicant's credit score
#11
Which of the following types of insurance typically involves underwriting for individuals?
Commercial property insurance
Workers' compensation insurance
Life insurance
Professional liability insurance
#12
Which of the following is NOT a type of underwriting decision?
Acceptance
Rejection
Postponement
Cancellation
#13
In insurance underwriting, what is meant by 'retention'?
The process of accepting an insurance application
The percentage of risk retained by the insurer after reinsurance
The duration of an insurance policy
The amount of premium paid by the insured
#14
Which of the following is NOT a typical underwriting criterion for property insurance?
Location of the property
Construction materials used
Number of vehicles owned
Security features installed
#15
In insurance underwriting, what does the term 'moral hazard' refer to?
The deliberate misrepresentation of facts by the insured
The willingness of individuals to take risks because they are insured
The process of evaluating past insurance claims
The tendency for insurance premiums to increase over time
#16
What role does actuarial science play in insurance underwriting?
Assessing the structural integrity of insurance buildings
Estimating future risks and determining appropriate premiums
Analyzing legal contracts in insurance policies
Handling customer complaints related to insurance claims
#17
Which of the following statements best describes reinsurance in relation to underwriting?
The process of insuring against the risk of catastrophic losses
The practice of selling insurance policies to high-risk individuals
The act of transferring a portion of risk to another insurer
The evaluation of insurance applications before approval
#18
What is a 'moratorium' in insurance underwriting?
A temporary suspension of insurance coverage
A type of insurance premium payment plan
A document detailing the terms of an insurance policy
An individual's risk classification based on medical history
#19
What does the term 'subrogation' mean in insurance underwriting?
The process of estimating the value of insured property
The transfer of an insured's rights to the insurer after a claim is paid
The calculation of insurance premiums based on risk factors
The cancellation of an insurance policy by the insured
#20
What is 'catastrophe modeling' in insurance underwriting?
A method for estimating the cost of natural disasters
A technique for assessing the financial impact of large-scale events
A process of evaluating insurance applications for high-risk individuals
A software tool used for calculating insurance premiums
#21
What is 'renewal underwriting' in insurance?
The process of underwriting a policy for the first time
The assessment of risk for existing policyholders at renewal
The transfer of risk to another insurer
The evaluation of claims after a policy expires