Q1 - Ariel is facing an ethical dilemma at work and is using a...

Q1 - Ariel is facing an ethical dilemma at work and is using a checklist for ethical decision making to help resolve it. At the end of his experience, he should

Select one:

A. Internalize everything learned.

B. Find that there is a rule for everything.

C. Find that some problems cannot be solved.

D. Avoid making a hard decision.

Q2 Rules of the CPCU Code of Professional Conduct

Select one:

A. Are established by the Ethics Policy Committee.

B. Are enforceable standards of behavior for CPCUs.

C. Express general concepts of ethical standards of behavior.

D. Include advisory opinions on ethical conduct.

Q 3. The American Institute for CPCU (American Institute) confers the CPCU designation. The CPCU designation can be revoked by the

Select one:

A. Board of Trustees of the American Institute.

B. Board of Ethical Inquiry of the American Institute.

C. Ethics Policy Committee of the American Institute.

D. Ethics Counsel of the American Institute.

Q4. Felicia is a commercial lines underwriter and a CPCU. One of the brokers that she underwrites comes into the office one day to discuss a potential account submission. The account is a golf course that includes a hotel and conference center. The account appears to be a good one - well managed and maintained. Unfortunately, the loss frequency on the account has been much higher than average over the past several years. The broker badly wants to write the account and is asking Felicia to provide a competitive quote despite the loss frequency, which the broker assures her will not continue. The broker offers to buy a membership to the golf course for Felicia so that she can visit the course regularly and "keep an eye on" the account. Which one of the following statements best describes how Felicia should handle the situation in order to comply with Canon 3 of the Code of Professional Conduct concerning laws, regulations, and unjust harm?

Select one:

A. Felicia should decline the golf course membership and underwrite and price the account based on its own merits.

B. Felicia could accept the golf course membership provided she ask another underwriter to review the account.

C. Felicia should decline to accept the golf course membership and refuse to write the account.

D. Felicia should accept the golf course membership if she elects to write the coverage so that she can "keep an eye on" the account.

Q5. Wallace is an insurance company executive and a CPCU. He is also an active member of a political party. When that party comes to power in Wallace's home state, he is appointed to serve on the state's insurance commission. He resigns his position with the insurance company and accepts the insurance commission appointment. Which one of the following statements best describes how Canon 4 of the Code of Professional Ethics regarding improving insurance mechanisms applies to this situation?

Select one:

A. Wallace is in compliance with Canon 4 as long as he avoids any action that may lead to the appearance of a conflict of interest.

B. Wallace is complying with Canon 4 by accepting a position that will allow him to improve the insurance mechanism.

C. Wallace is in violation of Canon 4, which prohibits CPCUs from serving in the public sector.

D. Wallace is not in compliance with Canon 4 because he has accepted a political appointment, which provides for personal gain at the expense of the public.

Q6.Insurance consumer Lachlan thinks he has a legitimate complaint relative to a CPCU's actions that he believes fell well below professional competency. Lachlan files a complaint with the Board of Ethical Inquiry. Which one of the following statements best describes when the Board of Ethical Inquiry would take action on Lachlan's complaint?

A. When a proven violation caused unjust harm and discredited the CPCU designation

B. During the investigation of the same complaint by the insurance regulator to assist in that investigation

C. During the investigation into the CPCU's actions by his employer

D. When notified by legal counsel for Lachlan that actions of the CPCU allegedly violated civil law

Q7.Jose, a CPCU and producer, is an expert in insuring major contractors and developers. One of his clients is negotiating a complex development involving a general contractor and a local governmental unit in a neighboring state. The client asks Jose about a hold harmless agreement provision and the effects of the provision on the liability of the client. To best comply with Rule 6.2 of the Code of Professional Conduct concerning knowing the legal limitations of one's profession, Jose should

Select one:

A. Explain the potential liability to the best of his ability.

B. Call the underwriter on the account for his or her opinion on the liability.

C. Recommend the client ask an attorney licensed in the neighboring state.

D. Call an adjuster in the neighboring state for his or her opinion on the liability.

Q8.Vance is a marketing representative with ABC Insurance and a CPCU. Vance is very active within the insurance industry and within his community. He regularly attends professional development courses and seminars, he presents introductory insurance seminars to students at the local high school, he serves on the town council, and he is treasurer of an investment club. Which one of Vance's activities best complies with his obligations under Canon 7 of the Code of Professional Conduct as it relates to helping the public to understand insurance?

Select one:

A. Attending professional development courses and seminars

B. Acting as treasurer of an investment club

C. Serving on town council

D. Teaching introductory insurance seminars

Q9. Charlotte has been assigned telephone extension 2728 at her adjusting company. As a CPCU, she is pleased that those numbers reflect the letters of her designation. She wonders if she should put "Extension CPCU" on her stationery and business cards. Charlotte's best action in this situation would be to

Select one:

A. Print her extension as "CPCU."

B. Ask her employer for permission to use CPCU instead of 2728.

C. Print her extension as "CPCU (2728)."

D. Print her extension as 2728.

Q10. Cindy is an applicant for the CPCU program. Cindy recently committed and was convicted of a felony. Which one of the following statements is true?

Select one:

A. There is a process whereby Cindy, if deemed to be fully rehabilitated, may still pursue the CPCU designation.

B. There is a two-year waiting period before Cindy's CPCU studies can be pursued again.

C. Cindy is banned for life from pursuing the CPCU designation.

D. Cindy can still pursue the CPCU designation upon recommendation by a parole officer.

Q11. Anton is a CPCU candidate. Anton violated a law relating to professional activities. The violation does not involve a felony conviction. Which one of the following statements is true?

Select one:

A. Anton may seek approval to continue to pursue the CPCU designation if he or she is deemed fully rehabilitated.

B. Anton may continue to pursue the CPCU designation as long as an apology was issued to any victims.

C. Anton may petition to have any suspension waived upon completion of assigned community service.

D. Anton may continue to pursue the CPCU designation at the discretion of the American Institute's Ethics Counsel.

Q12.The claim director for Insurance Company (IC) realized that he was not on track to meet his objective of significantly lowering the number of liability claims pending by the end of the year. He was intent on meeting the goal, however, so in December he issued a verbal directive to the claim staff. He said that they could settle for more than they believed a given claim to be worth if it meant closing the file by the end of the year, as long as the coverage limits were not exceeded. One of the claim representatives, who is a CPCU, thought that this scheme could be unethical because of its potential effect on policyholder rates and the value of claims generally. Her best course of action would be to

Select one:

A. Accept the instruction because if there is an ethical problem, she is not responsible for it.

B. Follow the directive because it has the positive effect of benefiting a stakeholder group, the claimants.

C. Ask herself to whom her duty of loyalty belongs and conclude that it is to the claim director.

D. Recognize that the issue is not hers to resolve and seek out the appropriate channels in her company in which to raise her concerns.

Q13.Blain is a CPCU who owns a large insurance agency. He is very proud of his CPCU designation and the number of his employees who are also CPCUs. He will not hire a new employee who is not a CPCU.

employees with "CPCU SPOKEN HERE" printed on them. Half the staff thought it was a good idea, and the other half thought there may be something improper about such use of "CPCU." Blain was not sure what to think.

Which one of the following statements is true?

Select one: 

A. Blain should take a vote among his staff members to determine whether to proceed with creating the buttons.

B. Blain should proceed with the button idea but the buttons should only be worn from holders of the CPCU designation.

C. Blain should satisfy himself that the buttons would appear dignified and professional and then proceed to order them.

D. Blain should seek express permission from the American Institute for the contemplated use of "CPCU."