Colorado Car Sales Practice Test

During placement of a complex commercial risk, what is a broker's core duty in the underwriting process?

To present the risk fairly and seek terms consistent with the client's instructions To guarantee that the insurer will pay every future claim To determine the insurer's regulatory capital requirement To act solely for the insurer in all circumstances

Correct Answer:

To present the risk fairly and seek terms consistent with the client's instructions

Explanation:

An intermediary should understand the client's needs, present underwriting information appropriately and seek suitable terms; it does not guarantee claims payment.

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