Casualty Actuarial Society (CAS) Practice Exam 2025 – The Comprehensive All-in-One Guide for Exam Success!

Investigating an applicant's use of temporary and seasonal workers is crucial for workers' compensation underwriters primarily because these workers may lack sufficient training and could present a moral hazard. When these workers are not fully familiar with workplace safety protocols or procedures, they are at a higher risk of workplace accidents and injuries. This increased risk can lead to more frequent and costly claims, impacting the overall risk profile of the business seeking coverage.

The potential for a moral hazard arises when either the employer or the workers might take on riskier behaviors if they believe that insurance coverage will absorb the costs associated with accidents or injuries. This situation could lead to less cautious attitudes toward workplace safety, thus raising the likelihood of claims.

The other options do not capture the essential risks associated with temporary and seasonal labor. For instance, while some may believe that these workers are better trained or less likely to file claims, this does not reflect the general trends observed within the industry. Comprehensive coverage for such workers is also not guaranteed, as the specifics of coverage can vary widely depending on the employer's insurance policy and the nature of the employment.