AINS 101 EXAMINATION SCRIPT 2026 FULL
QUESTION SET WITH VERIFIED ANSWERS
◉ Ways Insurance is Marketed and Sold.
Answer: 1. Independent Agents and Brokers
2. Exclusive Agency
3. Direct Writer
4. Distribution Channels
◉ Independent Agents and Brokers (Producers).
Answer: Sell insurance products to individuals, businesses, and
provide policy services
-BROKER represents CUSTOMER, AGENT represents one or more
INSURERS
-BROKERS usually CAN'T commit an insurer to write a policy, unlike
AGENTS who generally CAN
-BOTH are NOT employees of an insurer, and usually free to work
with as many insurers
-BOTH own their expirations lists
*advantage = insurer doesn't have a right to independently solicit
those policyholders Free to work with as many different insurers as
it wants
,◉ Expiration Lists.
Answer: Lists containing policy holder information and policy
expiration dates
◉ Exclusive Agnecy.
Answer: Contract to sell insurance for one insurer or group of
insurers
-AGENTS AREN'T employees of the insurer, but CANNOT sell policies
from another insurer, b/c contract prohibits that
-Insurer often handles administrative functions
-does NOT own policy exploration lists, the insurer does
-IF agent decides to contract with another insurer, CANNOT take
policyholders along
◉ Direct Writer.
Answer: Insurer uses its OWN EMPLOYEES as producers who
market its policies
-Same as Exclusive, b/c restricted to representing only ONE insurer,
which owns expiration lists
-Insurer's other staff does most of administrative work
◉ Common Distribution Channels.
Answer: 1. Digital - apps and websites
, 2. Call centers - Customer service representatives or chatbots
3. Direct response - Social media, email blasts, website ads
4. Group marketing - marketing to members of the same personal or
professional group
5. Financial institutions - marketing through banks and financial
services
◉ Underwriting.
Answer: Process of evaluating risks, selecting who can be insured,
pricing that insurance coverage, determining policy terms and
conditions, and monitoring those decisions
-Primary purpose = help an insurer develop and maintain a growing
profitable book of business
◉ Underwriters perform three key activites.
Answer: 1. Minimize Adverse Selection
2. Ensure adequate policy holder's surplus
3. Enforce underwriting guidelines
◉ Adverse Selection.
Answer: Generates unprofitable business by allowing an individual
or business with a high profitability of loss to obtain insurance at a
lower cost than insurer would normally charge b/c insurer wasn't
fully aware of the actual risk involved
QUESTION SET WITH VERIFIED ANSWERS
◉ Ways Insurance is Marketed and Sold.
Answer: 1. Independent Agents and Brokers
2. Exclusive Agency
3. Direct Writer
4. Distribution Channels
◉ Independent Agents and Brokers (Producers).
Answer: Sell insurance products to individuals, businesses, and
provide policy services
-BROKER represents CUSTOMER, AGENT represents one or more
INSURERS
-BROKERS usually CAN'T commit an insurer to write a policy, unlike
AGENTS who generally CAN
-BOTH are NOT employees of an insurer, and usually free to work
with as many insurers
-BOTH own their expirations lists
*advantage = insurer doesn't have a right to independently solicit
those policyholders Free to work with as many different insurers as
it wants
,◉ Expiration Lists.
Answer: Lists containing policy holder information and policy
expiration dates
◉ Exclusive Agnecy.
Answer: Contract to sell insurance for one insurer or group of
insurers
-AGENTS AREN'T employees of the insurer, but CANNOT sell policies
from another insurer, b/c contract prohibits that
-Insurer often handles administrative functions
-does NOT own policy exploration lists, the insurer does
-IF agent decides to contract with another insurer, CANNOT take
policyholders along
◉ Direct Writer.
Answer: Insurer uses its OWN EMPLOYEES as producers who
market its policies
-Same as Exclusive, b/c restricted to representing only ONE insurer,
which owns expiration lists
-Insurer's other staff does most of administrative work
◉ Common Distribution Channels.
Answer: 1. Digital - apps and websites
, 2. Call centers - Customer service representatives or chatbots
3. Direct response - Social media, email blasts, website ads
4. Group marketing - marketing to members of the same personal or
professional group
5. Financial institutions - marketing through banks and financial
services
◉ Underwriting.
Answer: Process of evaluating risks, selecting who can be insured,
pricing that insurance coverage, determining policy terms and
conditions, and monitoring those decisions
-Primary purpose = help an insurer develop and maintain a growing
profitable book of business
◉ Underwriters perform three key activites.
Answer: 1. Minimize Adverse Selection
2. Ensure adequate policy holder's surplus
3. Enforce underwriting guidelines
◉ Adverse Selection.
Answer: Generates unprofitable business by allowing an individual
or business with a high profitability of loss to obtain insurance at a
lower cost than insurer would normally charge b/c insurer wasn't
fully aware of the actual risk involved
