Underwriting

Underwriting Interview questions. We have listed some important interview questions on Underwriting to help you for your next job as Underwriter.

Q.1 What is Underwriting?

Underwriting is the process through which an individual or institution takes on financial risk for a fee. Underwriting services are provided by some large financial institutions, such as banks, insurance companies and investment houses.

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Q.2 Who introduced the term Underwriting?

The term underwriting is believed to have been coined by the famed insurer Lloyd's of London.

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Q.3 Give the types of Underwriters?

1. Mortgage Underwriters 2. Loan Underwriters 3. Insurance Underwriters 4. Debt Security Underwriters 5. Securities or Equities Underwriters

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Q.4 Explain Mortgage underwriters?

Mortgage underwriters need to ensure that the applicant for the mortgage loan meets the standards. They also need to analyze the property under consideration to ensure the purchase price

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Q.5 What do you understand by Insurance Underwriters?

An insurance underwriter determines how risky the party seeking the insurance is. There are specialized underwriters for each type of insurance, such as for auto insurance, life insurance, health insurance and more.

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Q.6 What are Loan underwriters?

These are the underwriters for other types of loans such as auto loan, student loan and many more. Their services are used by banks.

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Q.7 Who are Debt Security Underwriters?

Debt security underwriters buy debt securities, including municipal bonds, government bonds, corporate bonds, preference shares from the issuer. They then sell those debt securities to make a profit.

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Q.8 Explain Securities or Equities Underwriters?

These underwriters usually involve with IPO (initial public offerings) process of a company. Their services are primarily used by primarily investment banks.

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Q.9 What three main sources of underwriter risk exist for insurers?

1. Interest Rates. 2. Financial Markets. 3. Ratio. 4. insurance policy. 5. loss ratio.

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Q.10 What are the 7 types of business?

1. Sole proprietorship. 2. Partnership. 3. Limited liability company (LLC) 4. Corporation - C corp. 5. Corporation - S corp. 6. Corporation - B corp. 7. Corporation - nonprofit. 8. Flexibility.

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Q.11 What is life underwriting?

Underwriting is used to describe the consideration given to a life insurance application, to determine whether a policy applied should be issued or there are changes to be made depending on the person's risk profile.

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Q.12 What are perils in insurance?

A peril is an event, like a fire or break-in, that may damage your home or belongings. The perils covered by your homeowners insurance are listed in your policy.

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Q.13 What are the 3 categories of perils?

A peril is a potential adverse event. A hazard makes that event more likely. Hazards are divided into three classifications: physical, moral, and morale.

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Q.14 What are Operational Control?

Operational control is the authority to perform those functions of command over subordinate forces involving organizing and employing commands and forces, assigning tasks, designating objectives, and giving authoritative direction to accomplish the mission.

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Q.15 What are the 3 types of control?

Three basic types of control systems are available to executives: (1) output control, (2) behavioural control, and (3) clan control.

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Q.16 What are the types of claims in insurance?

Types of insurance claims under an auto policy can include property damage, physical injuries, uninsured motorist coverage, collision coverage, and liability.

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Q.17 What are the main principles of insurance?

In the insurance world there are six basic principles: insurable interest, Utmost good faith, proximate cause, indemnity, subrogation and contribution.

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Q.18 What is Claim settlement?

If an insurer settles a claim it pays money to a policyholder for the occurrence of a loss or risk against which they were insured.

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Q.19 What is claim settlement in life insurance?

Insurance companies have an obligation to settle claims promptly. You will need to fill a claim form and contact the financial advisor from whom you bought your policy.

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Q.20 What are the steps in claim settlement procedure?

Step One: Intimation to the insurance company about the Claim. Step Two: Documents required. Step Three: Submission of required Documents for Claim Processing. Step Four: Settlement of Claim.

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Q.21 What are the three basic types of dispute resolution?

1. Mediation. 2. Arbitration. 3. Litigation.

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Q.22 What is the goal of mediation?

The goal of mediation is for a neutral third party to help disputants come to a consensus on their own.

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Q.23 Explain arbitration?

In arbitration, a neutral third party serves as a judge who is responsible for resolving the dispute. Arbitrators hand down decisions that are usually confidential and that cannot be appealed. Like mediation, arbitration tends to be much less expensive than litigation.

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Q.24 What is litigation?

The most familiar type of dispute resolution, civil litigation typically involves a defendant facing off against a plaintiff before either a judge or a judge and jury.

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Q.25 What is the role of insurance intermediaries?

Insurance intermediaries provide services to insurance companies and consumers that complement the insurance placement process.

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Q.26 What is the role of intermediary or insurance agent?

Insurance intermediaries serve as a bridge between consumers, seeking to buy insurance policies and insurance companies, seeking to sell those policies.

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Q.27 What is the role of insurance broker?

An insurance broker is a specialist in insurance and risk management. A broker helps to identify your individual and business risks to help you decide what to insure.

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Q.28 Define Underwriting Cycle?

The underwriting cycle refers to fluctuations in the insurance business over a period of time.

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Q.29 What is the COPE model?

The COPE model, a systematic approach to problem-solving, provides the patient and caregiver with the opportunity to work closely with their health care.

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Q.30 What is the COPE model used for?

The COPE framework is used to structure educational materials and manuals for use with family caregivers with chronic illness.

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Q.31 What are 3 coping strategies?

There are three basic coping styles: task-oriented, emotion-oriented, and avoidance-oriented.

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Q.32 How is underwriting results calculated?

Underwriting income is calculated as the difference between an insurance company's earned premiums and its expenses and claims.

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Q.33 What is net underwriting result?

The difference between the earned premiums and the sum of the actual claim payments and the change in insurance liabilities.

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Q.34 How do you classify underwriters?

Underwriters classify the applicants into four types of risk groups: standard risk, substandard risk, preferred risk and uninsurable/declined risk.

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Q.35 What are the function of underwriters?

The underwriter's function is to evaluate a risk, estimate the potential exposure, determine the likelihood of loss, then make a decision whether or not to accept the application for insurance.

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Q.36 Explain SEBI Rules and Regulations, 1993?

1. Registration 2. Code of Conduct 3. Agreement with Clients 4. General Responsibilities of an Underwriter 5. Proper Books of Accounts and Records, etc. 6. Appointment of Compliance Officer 7. Board’s Right to Inspect 8. Liability in Case of Default

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Q.37 Which act regulate the underwriting process in India?

The Securities and Exchanges Board of India (Underwriters) Regulations, 1993.

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Q.38 What are SEBI regulations?

SEBI is a statutory regulatory body established by the Government of India to regulate the securities market in India and protect the interests of investors in securities.

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Q.39 What is the role of a claims adjuster?

Claims adjusters verify insurance claims and determine a fair amount for settlement. These can be any type of claim, from personal injury to property damage.

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Q.40 What does it mean to adjust a claim?

Claims adjusting is the process of determining coverage, legal liability, and settling a claim.

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Q.41 What is customer service explain?

Customer service is the support you offer your customers both before and after they buy and use your products or services that helps them have an easy and enjoyable experience with you.

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Q.42 What is Automated Underwriting?

Automated underwriting is a technology-driven underwriting process that provides a computer generated loan decision.

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Q.43 How does automated underwriting work?

Automated mortgage underwriting is the process where advanced artificial intelligence (AI) technology electronically undertakes the decision making process for granting mortgage loans by analyzing one's credit report.

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Q.44 Why would underwriting deny a loan?

Underwriters can deny loan application for several reasons. Some of these problems that might arise and have your underwriting denied are insufficient cash reserves, a low credit score, or high debt ratios.

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Q.45 How long does automated underwriting take?

It has the capability to provide instant outputs that can generally take up to 60 days to complete with manual processing.

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Q.46 What are Loan Operating Systems?

Loan operating systems in the lending market are also rapidly evolving to service all aspects of the loan process.

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Q.47 What is high-ratio loan?

A high-ratio loan is a loan whereby the loan value is close to the value of the property being used as collateral.

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Q.48 What are Qualifying Ratios?

Qualifying ratios are ratios that are used by lenders in the underwriting approval process for loans.

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Q.49 What are the two most commonly used automated underwriting systems?

“Fannie Mae Desktop Underwriter (DU) and Freddie Mac's Loan Product Advisor (LPA) are the two main automated underwriting systems.

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Q.50 What is Memorandum of Association?

The Memorandum of Association is the charter of a company. It is a document, which amongst other things, defines the area within which the company can operate.

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Q.51 What is the first step of the underwriting process?

The first step is Information collection

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Q.52 Which factor is essential during risk evaluation for big corporate clients?

Corporate governance

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Q.53 What is the first step to file a claim?

The first step to file a claim is to Provide a claimant's statement

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Q.54 What does 'P' in COPE refers to?

It refers to Protection

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Q.55 Which chapter of SEBI (Underwriters) Regulations 1993, illustrates registration of underwriters in India.

chapter 2

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Q.56 What steps do you follow to study a problem before making the final decision?

At first I would get as much history or background of the problem, then focus on finding out who are involved in the problem. Thereby understanding how and why of the problem to aid me in making final decision.

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Q.57 What is your greatest accomplishment as an underwriter?

You are required to support your position and establish the trust of the employer. Sample Answer - One of the greatest accomplishment as an underwriter so far has be retaining the renewal book after the company closed the branch office.

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Q.58 How do you stay organized and prioritize your work as an underwriter?

Very often it has been seen that underwriters ae absorbed in several tasks to perform all at once, and many take on dozens of clients at any given time. Your are required to make sure that you have what it takes to stay organized as your workload grows. Sample Answer - You may say that "I have maintained a detailed planner that I update throughout the day. This helps to keep a track of the cases which require focus at any given time. I also use an alphabetical filing system to keep track of every applicant's information to make the search easy " This shows the interviewer you management styles to be efficient throughout the day.

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Q.59 Let us suppose you have a different opinion on a case from your consigner which you very strongly feel about, how do you react in this case?

It is very important to have a cordial relationship between a consigner and underwriter. Your answer will demonstrate how tactful you are. It is suggested that as an underwriter you should adapt your style according to the consigner or consultant you are working with in order to get "Agree" on your consigns. Sample Answer - I will look for the point that will make it meaningful, but also be mindful about maintaining a strong workable relation with their consigner or consultant.

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Q.60 In the beginning, what was one of your biggest struggles in underwriting, and how did you overcome it?

You may have an endless list. There could be case where you faced trouble like learning the coding on MIB, underwriting specific conditions, understanding rating tables, dealing with high maintenance advisors etc. What is more important is to understand if the you are self-aware and take initiative to educate themselves on unknown topics.

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