Washington State Insurance Practice Exam

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Prepare for the Washington State Insurance Exam with comprehensive study materials and quizzes. Enhance your understanding of insurance concepts through engaging questions and detailed explanations to excel in your upcoming exam.

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

Which components determine insurance rates?

Broker commissions, investment returns, underwriting guidelines
Claim frequency, policyholder credit score, industry standards
Loss reserves, loss adjusting expenses, operating expenses, and profits
Policy limits, retention rates, premium growth

The correct answer is: Broker commissions, investment returns, underwriting guidelines

The correct answer is A. Broker commissions, investment returns, and underwriting guidelines are all components that can determine insurance rates. Option B is incorrect because claim frequency and policyholder credit score can influence insurance rates, but the inclusion of industry standards is not a primary component in determining rates. Option C is incorrect because while loss reserves, loss adjusting expenses, operating expenses, and profits are important factors for insurance companies, they typically do not directly determine insurance rates for policyholders. Option D is incorrect because while policy limits, retention rates, and premium growth are factors that can affect insurance rates for policyholders, they are not the primary components that determine rates.