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What best describes a 'program business' arrangement in property-casualty insurance?

A standard admitted carrier writing one-off accounts through retail agents

A book of similar risks in a defined niche, underwritten and serviced by a program administrator on behalf of one or more carriers

A reinsurance treaty between two carriers covering catastrophic losses

A captive insurance company owned by a single Fortune 500 parent

to track

2026 Statistics

Key Facts: PBP Exam

4 courses

Required for PBP Designation

The Institutes / TMPAA

May 2024

PBP Launch Date

The Institutes / TMPAA partnership

70%

Passing Score

All PBP/Institutes course exams

~$1,800

Total Designation Cost

$415 per course x 4 courses

Model #225

NAIC MGA Model Act

NAIC Managing General Agents Act

~90 days

Typical PA Contract Cancellation Notice

Common PA-carrier contract provision

The PBP designation requires four courses (two CPCU foundation courses plus PBP 401 and PBP 402) administered by The Institutes and TMPAA. Each course is approximately $415 with a 70% passing score. Topics include program business fundamentals, niche markets, MGA/MGU vs. program administrator distinctions, NAIC MGA Model Act #225, sliding scale and profit-share commissions, claims and binding authority limits, program submissions, captives, fronting, reinsurance treaties, and ethics under the CPCU Code of Professional Conduct.

Sample PBP Practice Questions

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1What best describes a 'program business' arrangement in property-casualty insurance?

A.A standard admitted carrier writing one-off accounts through retail agents

B.A book of similar risks in a defined niche, underwritten and serviced by a program administrator on behalf of one or more carriers

C.A reinsurance treaty between two carriers covering catastrophic losses

D.A captive insurance company owned by a single Fortune 500 parent

Explanation: Program business is a specialized book of homogeneous risks within a defined niche or industry, typically underwritten and administered by a program administrator (often an MGA/MGU) under a contract with one or more carriers. It is distinct from one-off retail placements, treaty reinsurance, or single-parent captives.

2Which organization launched the PBP designation in May 2024 in partnership with The Institutes?

A.NAIC

B.TMPAA (Target Markets Program Administrators Association)

C.PIA (Professional Insurance Agents)

D.RIMS

Explanation: The Program Business Professional (PBP) designation was launched in May 2024 by The Institutes in partnership with TMPAA, the Target Markets Program Administrators Association, the leading trade group for program administrators in P&C insurance.

3How many courses must a candidate complete to earn the PBP designation?

A.2

B.3

C.4

D.5

Explanation: The PBP designation requires four courses: two from the CPCU curriculum plus PBP 401 (program business fundamentals) and PBP 402 (program administrator contracts and submissions), with the ethics requirement integrated into the program.

4Which course in the PBP curriculum focuses specifically on program administrator contracts and submissions?

A.PBP 400

B.PBP 401

C.PBP 402

D.CPCU 520

Explanation: PBP 402, 'Understanding Program Administrator Contracts and Submissions,' covers the structure of PA-carrier contracts, submission packages, and key contractual provisions. PBP 401 covers program business fundamentals, while CPCU 520 is an operations-focused CPCU course.

5Which audience is the PBP designation primarily designed for?

A.Personal lines retail agents and customer service reps

B.MGAs, program administrators, and carrier program executives

C.Independent claims adjusters working catastrophe losses

D.Workers compensation auditors

Explanation: The PBP is designed for managing general agents (MGAs), program administrators, carrier program executives, and reinsurance and wholesale partners who build, underwrite, and manage program books of business.

6A 'niche market' in program business is best described as:

A.Any geographic territory served by a single carrier

B.A homogeneous group of insureds sharing common exposures, distribution, or industry characteristics

C.Only Fortune 500 corporate accounts placed by global brokers

D.Personal auto insurance written through direct-to-consumer channels

Explanation: A niche market in program business is a homogeneous group of insureds with common exposures, industry, or distribution characteristics, allowing the program administrator to underwrite efficiently using specialized expertise.

7Which of the following is the clearest example of a niche program?

A.A standard homeowners book sold through 5,000 independent agents

B.A package program for craft breweries underwritten by a specialty MGA

C.Personal auto policies written through a captive carrier owned by a bank

D.A general aggregate excess umbrella for any commercial buyer

Explanation: A craft brewery package program is a textbook niche: a homogeneous class of insureds (craft brewers), specialized exposures (tank leakage, contamination, taproom liability), and a dedicated MGA underwriting the class for a specific carrier.

8What is the primary distinction between a Managing General Agent (MGA) and a Managing General Underwriter (MGU)?

A.MGAs only place personal lines, while MGUs only place commercial lines

B.MGAs typically have broader authority including marketing and producer management, while MGUs primarily focus on underwriting authority delegated by a carrier

C.MGAs are domiciled offshore, while MGUs are domiciled onshore

D.MGAs are unregulated, while MGUs are licensed by every state

Explanation: While definitions vary by state and contract, MGAs typically have broader delegated authority that may include marketing, appointing producers, underwriting, binding, and sometimes claims authority. MGUs are usually focused more narrowly on underwriting authority delegated by a carrier. Both are forms of program administrators.

9A program administrator that performs underwriting, binding, policy issuance, and claims supervision on behalf of a carrier is most accurately described as functioning as a:

A.Reinsurance broker

B.Full-service MGA / program administrator

C.Wholesale retail agent

D.Captive insurance manager

Explanation: A full-service MGA or program administrator combines underwriting, binding, policy issuance, and often claims supervision, acting as the carrier's outsourced operational arm for a specific program.

10TMPAA membership benefits typically include all of the following EXCEPT:

A.Networking with carrier partners and other program administrators

B.Educational resources and best-practice guidelines for program administration

C.Guaranteed program approval by any TMPAA carrier member

D.Advocacy on regulatory and legislative issues affecting program business

Explanation: TMPAA provides networking, education, and advocacy for the program business community, but it does not guarantee program approval; carriers retain full underwriting and contractual discretion in deciding which programs to back.

About the PBP Exam

The Program Business Professional (PBP) is a designation launched in May 2024 by The Institutes in partnership with TMPAA (Target Markets Program Administrators Association). It is built for MGAs, program administrators, MGUs, and carrier partners who design, underwrite, and manage program business. The 4-course curriculum covers two CPCU foundation courses plus PBP 401 (program business fundamentals) and PBP 402 (program administrator contracts and submissions), with ethics integrated throughout.

Questions

100 scored questions

Time Limit

2 hours

Passing Score

70%

Exam Fee

$415 per course (~$1,800 total) (The Institutes / TMPAA)

PBP Exam Content Outline

20%

Program Business Fundamentals & Niche Markets

Definition of program business, niche identification, association programs, specialty distribution, fronting carriers, MGA vs MGU vs program administrator roles, and admitted vs E&S markets.

20%

Program Administrator–Carrier Contracts

NAIC MGA Model Act #225, required provisions, binding and claims authority limits, sliding-scale and profit-share commission, audit rights, E&O clauses, fiduciary trust accounts, exclusivity, and 90-day cancellation/runoff provisions.

15%

Program Submission Development

Building a comprehensive submission: target market definition, distribution plan, premium projections, expense and loss ratios, loss triangles, capacity request, reinsurance structure, and management qualifications.

15%

Underwriting in Program Business

Risk identification and selection, underwriting cycle, frequency/severity trend, loss-sensitive rating, loss control, predictive models, referral business, performance monitoring, and renewal underwriting.

15%

Captives, Reinsurance & Risk Sharing in Programs

Quota share, surplus share, and excess-of-loss treaties; ceding commissions; single-parent, group, RRG, and segregated cell captives; reciprocal exchanges; PA captive participation; collateral; and catastrophe reinsurance.

10%

Compliance, Producer Licensing & State Regulation of MGAs

MGA Acts adopted from NAIC #225, P&C and surplus lines licensing, TPA licensing, AML, OFAC, NAIC Insurance Data Security Model #668, GLBA, NYDFS Part 500, regulatory filings, and unfair claims practices.

Ethics

CPCU Code of Professional Conduct as applied to program business: integrity, conflicts of interest, captive participation disclosure, suitability in association marketing, and ethical incentive design.

How to Pass the PBP Exam

What You Need to Know

Passing score: 70%
Exam length: 100 questions
Time limit: 2 hours
Exam fee: $415 per course (~$1,800 total)

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

PBP Study Tips from Top Performers

1Read NAIC Managing General Agents Act (Model #225) and your state's adopted MGA Act to anchor contract and licensing questions

2Build a one-page chart of MGA vs MGU vs program administrator vs TPA roles, authorities, and licensing requirements

3Memorize the typical PA-carrier contract clauses: binding authority limits, claims authority caps, sliding-scale commission, profit-share, E&O, audit rights, fiduciary trust, 90-day cancellation, and runoff

4Master the program submission components: target market, distribution, premium and loss projections, expense ratio, loss triangles, capacity request, and reinsurance structure

5Practice reinsurance and captive structures: quota share, surplus share, XOL, ceding commission, single-parent vs group vs RRG vs segregated cell captives, and fronting carrier economics

Frequently Asked Questions

What is the PBP designation and who launched it?

The Program Business Professional (PBP) is a professional designation launched in May 2024 by The Institutes in partnership with TMPAA (Target Markets Program Administrators Association). It is designed for MGAs, MGUs, program administrators, and carrier partners working in program business across property and casualty insurance.

How many courses are required to earn the PBP designation?

PBP requires four courses: two foundation courses drawn from the CPCU curriculum, plus PBP 401 (program business fundamentals) and PBP 402 (Understanding Program Administrator Contracts and Submissions). Ethics is integrated through the CPCU Code of Professional Conduct that PBP candidates commit to.

How much does the PBP designation cost?

Each course is approximately $415, bringing the total to roughly $1,800 for all four courses. Additional costs include study materials and any optional review programs. TMPAA member firms often subsidize PBP for staff.

What is the passing score for PBP exams?

All PBP/Institutes course exams require a 70% passing score. Exams are typically delivered as virtual, timed Institutes examinations with multiple-choice questions in scheduled testing windows.

How does PBP relate to CPCU and other Institutes designations?

PBP shares two foundation courses with the CPCU curriculum and uses the CPCU Code of Professional Conduct, but it is a distinct, narrower designation focused on program business. CPCU candidates can apply qualifying coursework toward PBP and vice versa where the courses overlap.

Who should pursue the PBP designation?

PBP is built for MGAs, MGUs, program administrators, carrier program executives, wholesale brokers, reinsurance specialists working on program business, and ethics-focused leaders at TMPAA member firms. It signals deep expertise in PA-carrier contracts, program submissions, captives, and compliance.