Underwriting is the process of evaluating risks, selecting who can be insured, pricing that insurance coverage, determining policy terms and conditions, and ______ those decisions. Fill in the blank.

Which of the following is NOT a primary underwriting activity?

Adverse selection generates unprofitable business by allowing an individual or a business with a high probability of loss to obtain insurance at a lower cost than the insurer would normally charge for that risk.

Underwriting guidelines specify the attributes of an account that underwriters should look for before offering coverage.

Underwriting is essential because it helps insurers assess risk and set appropriate premiums. How does collaboration with other departments benefit both insurers and insureds?

What is one way cooperation between underwriters and representatives of other insurer functions improves the quality of information available to underwriters?

Risk control professionals and premium auditors provide underwriters with valuable information that enables them to make better underwriting decisions.

Which of the following is a type of valuable information that risk control professionals and auditors provide to underwriters?

Descriptions of operations that can help classify ________ exposures are a type of valuable information provided to underwriters.

Technical information on the fire and health hazards of new building materials and production processes is valuable to underwriters.

Loss control measures that could help an applicant meet ________ guidelines are provided to underwriters by risk control professionals.

New loss exposures at an insured’s ________ are a type of valuable information provided to underwriters.

Changes in an insured’s ________ operations are important information for underwriters.

Brian is an underwriter. If he wants to help an insurer develop and maintain a growing, profitable book of business, what key activities should he perform?

Mary has been approved for a life insurance policy with a low premium because on her application she falsely stated that she does not indulge in dangerous activities such as sky-diving, illegal street racing, and free solo rock climbing. This is an example of:

Underwriters are most effective when:

According to the key points, an insurer typically employs how many complementary groups of underwriters?

Which group of underwriters works primarily in the field by interacting directly with producers and applicants?

Fill in the blank: The second group of underwriters works primarily in the insurer’s _______ office and helps establish and maintain the insurer’s overarching underwriting policy.

What is the most important thing field underwriters do?

Which of the following is NOT an activity performed by field underwriters?

Field underwriters are responsible for ensuring accurate account classification so each account can be priced properly.

Field underwriters work with producers to recommend or provide applicants with appropriate _______.

Since field underwriters work closely with producers and insureds, they can help educate the _______ Department on what types of accounts are most profitable for the insurer.

Fill in the blank: Corporate underwriters assist insurers in researching the market by ___.

Fill in the blank: Formulating the underwriting policy is a collaborative effort between corporate underwriters and others, and the results are communicated through _______.

Fill in the blank: Corporate underwriters revise underwriting guidelines so that they reflect any changes in the _______.

Fill in the blank: Corporate underwriters collaborate with the insurer’s actuarial and legal departments to develop new coverage forms and modify existing forms to meet _______.

Fill in the blank: Rates are reviewed by underwriters and updated regularly to respond to changes in loss experience, regulatory developments, and _______.

Fill in the blank: Corporate underwriters are typically responsible for determining and fulfilling the training needs of _______.

Fill in the blank: Corporate underwriters determine reinsurance needs and select _______.

Fill in the blank: When complex or unique issues arise with an account, corporate underwriters consult with other underwriters to _______.

Fill in the blank: Corporate underwriters review files to check whether individual underwriters are following the insurer’s _______.

An insurer typically employs what two complementary groups of underwriters?

Select the group of underwriters that would be best suited to select new and renewal accounts that meet the insurer’s underwriting guidelines.

Which group of underwriters would be best suited to help formulate an underwriting policy?

Fill in the blank: The first step in the underwriting process is to ________ the application. In this step, underwriters try to understand the risk associated with each applicant using information from various sources such as the application, inspection reports, past claims, financial documents, audit reports, telematics, predictive models, and catastrophe models.

Fill in the blank: After evaluating an application, an underwriter may accept or reject it as is, or develop ________ alternatives by modifying the application and making a counteroffer to the applicant.

Fill in the blank: An underwriter must evaluate each underwriting alternative carefully and select the best one under the circumstances. This step is called ________ an underwriting alternative.

Fill in the blank: After evaluating an application, making any appropriate modifications, and determining a premium, the underwriter must ________ the final decision.

Fill in the blank: Underwriters must ________ their decisions to make sure that the desired results are achieved.

The first step of the underwriting process involves:

The tasks that must be completed to implement an underwriting decision are:

Camron is an underwriter who reviewed an application and determined that modifications must be made before Camron can accept the application. Which of the following are some modifications she might require?

What is an insurance rate?

What is an exposure unit?

Fill in the blank: Insurance premiums are calculated by multiplying the insurance rate by the number of _________

Which of the following is commonly called rating?

Fill in the blank: The premium is calculated by multiplying the insurance rate (the unit price) by the number of _________

Manual rates are usually intended to represent the average risk in a class.

What is the purpose of a rate manual in insurance?

Premium auditors help underwriters by:

What is the purpose of comparing anticipated loss exposures with actual loss exposures in insurance auditing?

What can identifying new exposures in insurance auditing help with?

What activities do premium auditors perform to assess an account’s desirability?

What types of hazards can auditors identify during insurance auditing?

Which of the following is a factor that can affect the final premium?

Installing fire-protection systems can affect the final insurance premium.

True or False: The care and condition of the premises is not a factor in determining the final insurance premium.

An exposure unit can be described as:

Insurance premiums are calculated based on which of the following factors?

Brian should help the insurer minimize adverse selection, ensure adequate policyholders’ surplus, and enforce underwriting guidelines by:

Educational Objective 1: Which of the following is an example of adverse selection?

Underwriters are most effective when:

The primary role of the first group (field underwriters) and the second group (corporate underwriters) is:

The most important thing field underwriters do is:

Formulating the policy is a collaborative effort because:

The first step in evaluating an insurance application is:

To implement an underwriting decision, the underwriter must:

Camron may require the applicant to do which of the following before accepting the application?

Which of the following can affect the final insurance premium?