AINS 101 SIMULATED FINAL PAPER 2026
COMPLETE QUESTIONS AND ANSWERS
GUARANTEED TO PASS
●● Adverse selection.
Answer: Insuring individuals with a high probability of loss at a cost
lower than the insurer would normally charge for that risk because it
wasn't aware of the actual risk involved.
●● Binder.
Answer: A temporary written or oral agreement to provide insurance
coverage until a formal written policy is issued.
●● Book of business.
Answer: A group of policies with a common characteristic, such as
territory or type of coverage, or all policies written by a particular
insurer or agency.
●● Broker.
Answer: An independent producer who represents insurance customers.
●● Brokerage.
, Answer: Compensation in the form of a flat fee or a commission that is
paid by the reinsurer to the reinsurance intermediary for services
provided.
●● Capacity.
Answer: The amount of business an insurer is able to write, usually
based on a comparison of the insurer's written premiums to its
policyholders' surplus
●● Catastrophe model.
Answer: A type of computer program that estimates losses from future
potential catastrophic events.
●● Certificate of insurance.
Answer: A brief description of insurance coverage prepared by an
insurer or its agent and commonly used by policyholders to provide
evidence of insurance.
●● Claim.
Answer: A demand by a person or business seeking to recover from an
insurer for a loss that may be covered by an insurance policy.
●● Claimant.
COMPLETE QUESTIONS AND ANSWERS
GUARANTEED TO PASS
●● Adverse selection.
Answer: Insuring individuals with a high probability of loss at a cost
lower than the insurer would normally charge for that risk because it
wasn't aware of the actual risk involved.
●● Binder.
Answer: A temporary written or oral agreement to provide insurance
coverage until a formal written policy is issued.
●● Book of business.
Answer: A group of policies with a common characteristic, such as
territory or type of coverage, or all policies written by a particular
insurer or agency.
●● Broker.
Answer: An independent producer who represents insurance customers.
●● Brokerage.
, Answer: Compensation in the form of a flat fee or a commission that is
paid by the reinsurer to the reinsurance intermediary for services
provided.
●● Capacity.
Answer: The amount of business an insurer is able to write, usually
based on a comparison of the insurer's written premiums to its
policyholders' surplus
●● Catastrophe model.
Answer: A type of computer program that estimates losses from future
potential catastrophic events.
●● Certificate of insurance.
Answer: A brief description of insurance coverage prepared by an
insurer or its agent and commonly used by policyholders to provide
evidence of insurance.
●● Claim.
Answer: A demand by a person or business seeking to recover from an
insurer for a loss that may be covered by an insurance policy.
●● Claimant.
