1. What is the predominant purpose of underwriting
A. develop rules for insurance
B. develop and maintain profitable book of businesses for the insurer
C. predict possible risks
D. None of the above

2. An underwriter is best described as an insurance professional who
A. accepts or rejects risks.
B. implements an insurer’s strategic plan.
C. invests the capital of an insurer’s shareholders.
D. All of the above

3. What does severity of loss refers to?
A. the ratio of the number of losses to the number of exposure units.
B. the premium required to pay claims.
C. the average size of losses.  
D. a policy’s statutory conditions.

4. What should be investigated by an underwriter when assessing a new risk?
A. Losses which were denied by a prior insurer
B. Losses which were less than the deductible limit and paid by the insured
C. Losses on previously owned locations which were paid by a prior insurer
D. All of the above

5. What does underwriting consists of
A. Risk Assessment
B. Pricing
C. Both of the above
D. None of the above

Answers:      1 (B), 2 (D), 3 (A), 4 (D), 5 (C)

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