Security Federated Insurance Company numbers its insurance policies with a 10 character code that identifies the type of property or casualty insurance sold, the policy year, the customer type, and a customer number. Numbering of this character is an example of:
a.Sequential code.
b.Block code.
c.Group code.
d.Object code.
Answer:C
Choice "C" is correct. Group coding embeds intelligence into the identification numbers associated with a particular item. The identification of different features of an insurance policy with specific numbering scheme is an example of group coding.
Choice "a" is incorrect. Sequential coding purely numbers documents, transactions, or other items in order (sequence). Insurance policy number of the type described is not sequential coding.
Choice "b" is incorrect. Block coding represents assignment of blocks of numbers to broad categories of items (e.g., a general ledger chart of accounts that assigns assets to the 1,000 series of account numbers, liabilities to the 2,000 series, etc.).
Choice "d" is incorrect. The object code is created by a compiler and represents the intermediate instruction that takes programming source code and translates it into machine language. This response is a distracter.