1.Julio, a CPCU, is an auditor for a reinsurer. During a claims audit of a reinsured, Julio detects violations of the reinsured's underwriting guidelines by its underwriters. Which one of the following would be Julio's best choice for his audit report?

Select one:

A. Report the violations to his employer but not to the reinsured

B. Ignore the potential violations in the report as they are not related to claims

C. File a specific report on the potential violations with the appropriate parties

D. Identify the potential problem to the underwriter

2.Walter is a commercial lines insurance producer and a CPCU. When he contacts one of his larger accounts to discuss the policy renewal, the client indicates that he is unhappy with the premium he is currently paying and that, if Walter cannot find a more competitive price, the client may ask another brokerage to quote on the coverage. Walter represents an insurer, XYZ Insurance, that he knows will provide a very competitive quote for the client's coverage. He has been hesitant to use XYZ with major clients, however, because he has had many complaints about the insurer's speed and quality of service in both loss control and claims adjusting. Walter elects not to share his concerns about XYZ with his client, and despite his reservations, he obtains a quote for the client. The client is happy with the quote and accepts the renewal. Which one of the following statements best describes how Canon 3 of the Code of Professional Conduct concerning laws, regulations, and unjust harm applies to this situation?

Select one:

A. Walter is in compliance with Canon 3 because he is doing what the client has asked him to do.

B. Walter is in compliance with Canon 3 because he is supporting fair price competition.

C. Walter is not in compliance with Canon 3 because he has chosen price over quality.

D. Walter is not in compliance with Canon 3 because he has concealed his concerns about XYZ.

3.Katarina, a CPCU, is considering running for city council. Her platform would include a promise to improve the insurance and risk management programs of the city. Katarina is concerned that her choice to run for public office may violate the CPCU Code of Professional Conduct. Which one of the following statements most correctly identifies a situation where Katarina would not violate the Rules of Canon 4 concerning diligence in occupational duties?

Select one:

A. When she takes a position and assures the public the American Institute supports her position

B. When she believes that a few changes in safety procedures would improve the workers compensation experience of the city

C. When she correctly publicly criticizes the insurance brokers who currently obtain insurance for the city

D. When the reason for her running for office is to obtain a substantial portion of the insurance business of the city for her employer

4.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?

Select one:

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

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

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

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

5.Emilia is a CPCU and risk management consultant. She has been asked by law enforcement to provide information in an inquiry into alleged illegal actions of the broker of one of her clients. To best comply with Rule 5.3 of the Code of Professional Conduct related to investigations into alleged illegal conduct, Emilia should

Select one:

A. Ignore the inquiry as the regulator has no jurisdiction over her activities.

B. Ask the client for permission to respond to the inquiry.

C. Report the inquiry to the client and broker.

D. Respond with any information that is officially requested by law enforcement.