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AFSB 151 FLEX
TEST WITH
COMPLETE
SOLUTIONS 2024
Which one of the following statements regarding fidelity bond claims is true? - answer By promptly investigating a bond loss, an insurer may discover that it has recourse against persons or entities whose conduct caused or contributed to the loss, but is not relevant to the proof of loss. Which one of the following statements regarding gathering information for surety claims is true? - answer Claims by personnel can gather most of the needed information for a surety claim by applying the questions of who, what, when, where, why, and how to the claim.
Which one of the following statements regarding the goal of the fidelity and surety claims process is true? - answer Once the claims personnel have determined that the surety is probably liable to the obligee under the bond, they begin the information gathering process Which one of the following statements regarding surety compliance with statutes and regulations is true? - answer Surety and fidelity contracts are often prescribed by statue or regulation, including requirements for many license and permit bonds, fidelity coverages, and public official bonds. Which one of the following statements is true regarding financial reporting to reinsurers? - answer When a primary surety establishes reserves, it determines a reinsurance recoverable reserve and notes in the records that reinsurance reserves have reduced posted reserves.
Under a cosurety agreement for which a principal defaults on the bond, how is the cosurety's share of the risk determined and how are losses paid? - answer The osurety agreement defines each cosurety's share of the loss that is paid by the designated controlling cosurety, which then collects the agreed-upon portion of the loss and expense amounts from each surety. Which one of these statements provides an accurate description of license and permit bonds or their use? - answer Licenses help regulate license holders through statues, regulates, or ordinances, and they are backed by license and permit bonds. Under a public official bond guaranteeing the honesty of a treasurer, - answer He or she must account for the cash that he or she holds while in office. Public official bonds for officials who handle public funds, - answer guarantee losses that occur when the principal fails to follow designated depository guidelines
Bonds in the category of public official bonds for officials whose duties require direct involvement with members of the public - answer pay losses when principals commit wrongful acts such as seizing the wrong goods or making wrongful arrests A bond that guarantees that, if a higher court sustains an initial judgement on appeal, the defendant will pay the entire judgement, plus court costs and interest, is - answer A supersedes bond. Which one of the following contractor's assets would encourage a surety to underwrite contract bonds for the contractor or to extend a line of credit for bonding? - answer Quality stocks and bonds and accounts receivable Sureties compete for commercial surety bonds in this category on the basis of service to the agent and to the client and they usually offer substantial price discounts for
write replevin bonds - answer More quickly and for smaller amounts The fidelity loss control measure of divided responsibilities, under which employees who regularly handle cash do not also handle merchandise, is impractical for some small businesses. To address this situation, which of the following practices should the employer perform? - answer Make frequent spot checks Name the special characteristics of fidelity bonds to which this refers: The nature of the employment relationship provides the employee an opportunity to learn the firm's routines; schedules; and the existence, absence, or relative effectiveness of management controls - answer Property exposed to loss is accessible What quality of the contractor-producer- underwriter relationship requires periodic visits to the contractor's office, visits to project sites with the contractor, and
meetings with the contractor's key people concerns? - answer Ongoing dialogue Frequently having to react to emergency or artificial deadlines indicates a lack of what quality in the contractor-producer- underwriter relationship - answer Communication When assessing a contractor's capacity in terms of management control, what is the first step in the construction process? - answer Estimating Which one of the following includes sections of the Consumer Credit Protection Act that apply directly to the surety industry? - answer Titles VI and VII Which of the following statements is true regarding the surety underwriter's evaluation of a surety principal? - answer The underwriter needs to obtain current information quickly or risk making a bad
credit information for most US households? - answer TransUnion Which one of the following consumer credit report providers also provides business credit reporting? - answer Experian
