AINS PRACTICE EXAM REVIEW
QUESTIONS AND ANSWERS 2026
VERIFIED.
One distinguishing feature between independent agency systems and other marketing systems
is the... - ANS agency expiration list
Foreign Insurer - ANS An insurer licensed to operate in a state but incorporated in another
state
Domestic Insurer - ANS An insurer doing business in the jurisdiction in which it was
incorporated
Alien Insurer - ANS An insurer domiciled in a country other than the US
Direct Response Marketing System - ANS Greatly reduces compensation costs but has higher
advertising costs
Agency Expiration List - ANS An agency's most valuable asset (does not belong to insurer)
Important consideration when selecting distribution channels - ANS Does the channel
capitalize on its core capabilities?
@COPYRIGHT ALL RIGHTS RESERVED PAGE 1 OF 10
, Knowledge acquired by the agent is presumed to be.. - ANS knowledge acquired by the
insurer
Premium collection method used for personal insurance and small commercial accounts -
ANS Direct Bill
What specifies scope of authority of an agent? - ANS Agency contract
Agency Bill - ANS Payment procedure in which a producer sends premium bills to the insured,
collects the premium, and sends the premium to the insurer, less any commission
Item Basis - ANS Premium (less commission) is forwarded to the insurer when the producer
collects it or when it comes due. Least complex method
Statement Basis - ANS Insurer sends statement to the producer showing the premiums due.
Producer is obligated to pay the premiums as due.
Account Current Basis - ANS Producer periodically prepares a statement showing the
premiums due to the insurer, after deducting appropriate commissions, and transmits the
amount to the insurer. The agency contract will indicate how often the producer must submit
the account current statement (usually monthly). Producer must pay when premium is due,
even if policyholder hasn't paid.
Purposes of underwriting - ANS Develop and maintain a book of business, guard against
adverse selection, ensure adequate policyholder's surplus and enforce underwriting guidelines
Experience Rating - ANS A rating plan that adjusts the premium for the current policy period
to recognize the loss experience of the insured organization during past policy periods
@COPYRIGHT ALL RIGHTS RESERVED PAGE 2 OF 10
QUESTIONS AND ANSWERS 2026
VERIFIED.
One distinguishing feature between independent agency systems and other marketing systems
is the... - ANS agency expiration list
Foreign Insurer - ANS An insurer licensed to operate in a state but incorporated in another
state
Domestic Insurer - ANS An insurer doing business in the jurisdiction in which it was
incorporated
Alien Insurer - ANS An insurer domiciled in a country other than the US
Direct Response Marketing System - ANS Greatly reduces compensation costs but has higher
advertising costs
Agency Expiration List - ANS An agency's most valuable asset (does not belong to insurer)
Important consideration when selecting distribution channels - ANS Does the channel
capitalize on its core capabilities?
@COPYRIGHT ALL RIGHTS RESERVED PAGE 1 OF 10
, Knowledge acquired by the agent is presumed to be.. - ANS knowledge acquired by the
insurer
Premium collection method used for personal insurance and small commercial accounts -
ANS Direct Bill
What specifies scope of authority of an agent? - ANS Agency contract
Agency Bill - ANS Payment procedure in which a producer sends premium bills to the insured,
collects the premium, and sends the premium to the insurer, less any commission
Item Basis - ANS Premium (less commission) is forwarded to the insurer when the producer
collects it or when it comes due. Least complex method
Statement Basis - ANS Insurer sends statement to the producer showing the premiums due.
Producer is obligated to pay the premiums as due.
Account Current Basis - ANS Producer periodically prepares a statement showing the
premiums due to the insurer, after deducting appropriate commissions, and transmits the
amount to the insurer. The agency contract will indicate how often the producer must submit
the account current statement (usually monthly). Producer must pay when premium is due,
even if policyholder hasn't paid.
Purposes of underwriting - ANS Develop and maintain a book of business, guard against
adverse selection, ensure adequate policyholder's surplus and enforce underwriting guidelines
Experience Rating - ANS A rating plan that adjusts the premium for the current policy period
to recognize the loss experience of the insured organization during past policy periods
@COPYRIGHT ALL RIGHTS RESERVED PAGE 2 OF 10
