APA 92 Practice Exam

Question 0

State regulatory laws include

Answer 0

File and use, flex rating, prior approval, use and file, mandatory law.

Question 1

The ideal exposure base is

Answer 1

Difficult for the insured to manipulate, sensitive to inflation, and socially acceptable. It is also easily determined.

Question 2

The NCCI does?

Answer 2

Function directly in many jurisdictions, acts as a statistical agent to state rating bureaus, and calculates file loss costs for its members

Question 4

A business consideration in rate making is that the rate .

Answer 4

is sensitive to loss exposures

Question 5

An employer might commonly demonstrate its financial ability to pay any WC claim by

Answer 5

having a WC insurance plan, state fund, or self insure

Question 6

The insurer;s rights regarding when a premium audit can be conducted include

Answer 6

within three years of expiration, using records only relating to the policy, and during the policy period

Question 7

Worker’s compensation benefits include

Answer 7

medical, disability, and death. it does not cover unemployment

Question 8

What are the standard limited of liability under employers’ liability coverage for bodily injury by accident and bodily injury for disease?

Answer 8

100/100/500

Question 9

Part four of WC and ELI policy covers

Answer 9

your duties if injury occurs

Question 10

Part 6 - conditions of WC and ELI policy provides rights and obligations relating to

Answer 10

inspection, cancellation, and sole representative

Question 11

Care and loss of employee services, including the loss of consortium is covered under?

Answer 11

Employers Liability Insurance

Question 12

The prominent reasons payroll is used as a premium base in WC is that

Answer 12

it variance with exposure, easy to determine and verify, and it is not readily manipulated by the insured

Question 13

When uninsured subcontractors are used, to calculate payroll you can use

Answer 13

payroll, full subcontract price, or 90% of contract price for contracts with labor only.

Question 14

The authorized rate is

Answer 14

the manual rate or any rate authorized by the regulatory authority

Question 15

Business can be considered multiple enterprises when

Answer 15

the other operation is not within the scope of insured’s principal business, operation could still exist if insured’s other operations cease, and the insured maintains separate financial records for each business.

Question 16

Parts of the basic manual include

Answer 16

Rules, classifications, and conditions

Question 17

The Scopes Manual derived the description for each classification from

Answer 17

NCCI classification files, NCCI underwriting committee decisions, and NCCI underwriting staff interpretations

Question 18

Standard exception classifications include

Answer 18

clerical office employees, clerical telecommuter employees, and automobile salespersons

Question 19

The Davis-Bacon Act prohibits federal government from funding any construction project on which

Answer 19

wage rates are below the prevailing wage for the area

Question 20

On a construction project, the person primarily responsible for work quality and timely performance is the

Answer 20

general contractor

Question 21

the basic stages of the construction process include

Answer 21

installing utilities, enclosing the superstructure, and landscaping the site

Question 22

What are flashings?

Answer 22

The material strips used for sealing joints

Question 23

In construction, a temporary yard can become a permanent yard when it is

Answer 23

used after project completion

Question 24

The Jones act applies to?

Answer 24

an occupational injury to a crewmember of a seagoing cargo vessel injured while the vessel is at sea

Question 25

The FELA (federal employers liability act) applies to?

Answer 25

an occupational injury to an employee of an interstate railroad who would be injured in a train accident

Question 26

A state workers’ compensation law

Answer 26

would apply to an occupational injury when an employee of a commercial painting firm is injured while temporarily working at a dockyard painting the warehouse used to store cargo for seagoing vessils.

Question 27

LHWCA covers

Answer 27

the operator of a crane used to load and unload seagoing vessels.

Question 28

The stevedoring industry wage rate structure contains penalty rates for handling

Answer 28

ammunition, explosives

Question 29

GL gross sales premium base exclusions include

Answer 29

royalty income from patent rights or copyrights that are not product sales, sales taxes collected and submitted to governmental division, and finance charge for items sold on installment

Question 30

The Commercial Lines Manual includes

Answer 30

comissions but not tips, intercompany sales, and severence pay

Question 31

The Commercial lines manual includes payroll for GL insurance such as

Answer 31

fees paid to employment agencies, payments for allowances for hand or power tools, and value of store certificates or merchandise. It does not include rewards for invention or discovery

Question 32

The classification table in the commercial lines manual contains raiting and classification information for

Answer 32

boiler and machinery, general liability, and farm. It does not include workers’ compensation

Question 33

The amount of an employers WC obligation depends on

Answer 33

a state statute, not judges decision, jurys decision, or tort law.

Question 34

in the CLM classification table, the symbol “m” denotes

Answer 34

Admissions

Question 35

An operation excluded from the scope of a classification is

Answer 35

amusement centers

Question 36

An inclusion for governmental subdivision audits are

Answer 36

operating expenditures

Question 37

NPD stands for

Answer 37

no payment division

Question 38

NOC means

Answer 38

not otherwise classified

Question 39

The insured is an auto parts store. The insured’s van is used by employees to deliver parts to auto dealers and repair shops in the area. The correct auto business use classification is

Answer 39

commerical. it is not wholesale, service, or retail

Question 40

the primary classification in motor carrier insurance for van pools is

Answer 40

seating capacity

Question 41

for public audits, other than car basis or composite rating could be

Answer 41

gross receipts and mileage basis

Question 42

According to CLM, truckers eligible for coverage include

Answer 42

contractual gravel dealers, furniture movers, and building contractors hauling supplies

Question 43

Item five in schedule for non-ownership liability in the truckers coverage from declarations include

Answer 43

number of employees or partners

Question 44

Item six of trailer interchange coverage in truckers coverage form declarations include

Answer 44

the daily rate and estimated premium for the physical damage coverages provided under the trailer interchange coverage

Question 45

the covered auto symbol covers owned auto onlys under the truckers coverage form?

Answer 45

Symbol 42

Question 46

Which covered auto symbol covers hired autos only?

Answer 46

Symbol 47

Question 47

A typical garage policy has

Answer 47

auto physical damage, auto liability, and garage keepers coverage

Question 48

the 2005 garage coverage form helps meet insurance needs of

Answer 48

auto dealers

Question 49

item one of garage coverage form declarations include information regarding

Answer 49

policy period

Question 50

The liability premium for the Garage Coverage Form-Auto Dealers Supplementary Schedule is based on

Answer 50

number of employees

Question 51

Most property insurance contracts settle losses based on the propertys

Answer 51

actual cash value

Question 52

Bailees insurance includes coverage for

Answer 52

laundries and dry cleaners, furriers customers, and warehouse operators legal liability. It does not cover bonds for jailed individuals

Question 53

The purpose of an internal control survey is to

Answer 53

measure the value of mangement controls, discourage theft by employees, and to provide early detection of theft.

Question 54

Transportation insurance on domestic shipments that covers the carriers liability is provided by

Answer 54

a motor truck cargo insurance policy

Question 55

a general control for a fidelity audit is

Answer 55

physical security measures

Question 56

a narrative report for an auditor reporting on crime and fidelity losses include

Answer 56

audit prcedures and findings, method of alleged discrepancies, and settlement proposal schedule

Question 57

embezzlement is

Answer 57

the principal cause of employee losses

Question 58

in crime and fidelity loss auditing, the narrative report includes

Answer 58

information used for final claim negotiation, information developed from the insured’s books and records, and schedules in case a court decision is necessary for a claim settlement

Question 59

an underwriter may request an internal control curvery for an insured or a prospect for

Answer 59

insured’s request, fidelity claims for the insured line are unacceptably high, and limits requested eceed predertined amount

Question 60

Pure Premium =

Answer 60

Loss and loss adjustment expenses/earned exposure units

Question 61

gross rate =

Answer 61

pure premium/loss and loss adjustment expense

Question 62

loss and loss adjustment expense percentage =

Answer 62

100% - Total aquisition costs - all other expenses (except loss and loss adjustment expenses)

Question 63

Ocean marine insurance covers

Answer 63

Hull insurance, protection and indemnity, and cargo insurance.

Question 64

An open cargo policy is an insurance policy that covers oversea shipments that are

Answer 64

either exports or imports or both, by vessel or aircraft.