CAS Practice Exam 2025 – Complete Study Guide

The key question regarding risk acceptance for an account focuses on whether the risk aligns with the underwriting guidelines established by the insurance company. Underwriting guidelines are critical as they define the parameters within which an insurer will accept or reject risks. They take into account various factors such as loss experience, risk characteristics, and accepted risk appetites. If a risk falls outside these established guidelines, it may lead to adverse selections, increased claims, or financial losses for the insurer. Thus, evaluating whether a specific risk is acceptable according to these guidelines is essential for making informed decisions about coverage and pricing.

The other options, while relevant to the broader context of risk management and decision-making, do not specifically address the core issue of risk acceptance in relation to underwriting. Market trends, public image, and environmental regulations play important roles in shaping a company's strategy and public perception but do not directly dictate whether an individual risk is acceptable based on underwriting criteria.