AINS 101 EXAM 2024 QUESTIONS & CORRECT
ANSWERS GRADED A
Bill is an insurance producer for and employed by ABC Insurance Company
(ABC). He represents only ABC when marketing insurance products, and uses an
administrative staff also employed by ABC. Bill is a producer in the - ANSWER-
Direct writer marketing system
Because the insurance company usually determines policy wording and the insured
has little choice but to "take it or leave it," an insurance contract is a - ANSWER-
Contract of adhesion
Which one of the following best explains why producers should be alert to changes
in clients' loss exposures? - ANSWER-Implemented risk management techniques
may prove to be ineffective or become obsolete
At Greenfield Insurance Company, Bernadette and Rachel are corporate
underwriters, and Tomas and Jose are field underwriters. All of the following are
underwriting activities typically performed by corporate (or staff) underwriters like
Bernadette and Rachel, EXCEPT: - ANSWER-Support producers and insureds
Joel is the underwriter for Stanton Industries. He received a notice from the
premium auditor on the account. After a recent visit to the insured's location, the
auditor wanted to make Joel aware of a decline in the business and some
questionable business practices. Which one of the following types of hazards is the
auditor identifying? - ANSWER-Moral hazards
Moral hazards - ANSWER-include questionable business practices or a failing
business.
,James West is a claims rep with Hatters Insurance. As he learns how to handle a
claim from start to finish, which one of the following best describes the correct
order for him to follow during this process? - ANSWER-Identifying the policy,
calculating a loss reserve, determining the cause of loss, preparing a loss statement
Margaret was severely injured and scarred due to a recent accident. Which one of
the following is an example of general damages Margaret received? - ANSWER-
Compensation for disfigurement
Donna is an insurance producer. She makes an appointment with potential
policyholder Sandie to review her loss exposures. She asks Sandie to complete a
questionnaire to assist her in this effort. Donna is conducting a - ANSWER-Risk
management review
Rachel is a new employee of Westley Insurance, and has been asked to review
some existing policies to become familiar with the types of policies she will be
working with. Which one of the following will Rachel find is true as she conducts
her review? - ANSWER-Rachel finds the policy begins with a coverage overview
and then goes into more coverage details.
Sports, Inc. is looking to obtain a commercial property policy on its building for
$400,000. If their insurer decides to charge them a rate of $0.50 per $100 of
building insurance, what premium must Sports, Inc. pay? - ANSWER-$2,000
Destructive competition in the insurance industry could result in - ANSWER-
Insurance shortages
The financial report for Hometown Insurer contains the following information:
Earned premiums$4,000,000Written premiums$5,000,000Net investment
income$1,000,000Incurred losses$3,000,000Incurred underwriting
expenses$2,000,000
, What is Hometown Insurer's loss ratio? - ANSWER-75%
Loss Ratio - ANSWER-incurred losses divided by its earned premiums
Jessie is a new customer service representative (CSR) at the Winfield Agency.
Jessie usually engages in all the following activities, EXCEPT: - ANSWER-
Determining coverage quotes
Riley Turner is performing a comprehensive evaluation of Hardwick Enterprises to
make sure its insurance and risk management efforts are serving the organization
appropriately. Which one of the following will be true in regard to this effort? -
ANSWER-Besides risk management goals being attainable, they should also pose
a challenge.
Rachel is considering investing in the stock of an insurance company. Which one
of the following is likely to provide the best indication of the insurer's financial
position at this point in time? - ANSWER-Balance sheet
Balance Sheet - ANSWER-provides the best indication of its financial position
because it shows admitted assets, liabilities, and policyholders' surplus at a
particular point in time.
Which one of the following is the amount of business an insurer can write based on
regulatory guidelines, usually a comparsion of the insurer's written premiums to
the policyholders' surplus? - ANSWER-Capacity
The two main sectors of the insurance industry are - ANSWER-Property-casualty
insurance and life-health insurance
ANSWERS GRADED A
Bill is an insurance producer for and employed by ABC Insurance Company
(ABC). He represents only ABC when marketing insurance products, and uses an
administrative staff also employed by ABC. Bill is a producer in the - ANSWER-
Direct writer marketing system
Because the insurance company usually determines policy wording and the insured
has little choice but to "take it or leave it," an insurance contract is a - ANSWER-
Contract of adhesion
Which one of the following best explains why producers should be alert to changes
in clients' loss exposures? - ANSWER-Implemented risk management techniques
may prove to be ineffective or become obsolete
At Greenfield Insurance Company, Bernadette and Rachel are corporate
underwriters, and Tomas and Jose are field underwriters. All of the following are
underwriting activities typically performed by corporate (or staff) underwriters like
Bernadette and Rachel, EXCEPT: - ANSWER-Support producers and insureds
Joel is the underwriter for Stanton Industries. He received a notice from the
premium auditor on the account. After a recent visit to the insured's location, the
auditor wanted to make Joel aware of a decline in the business and some
questionable business practices. Which one of the following types of hazards is the
auditor identifying? - ANSWER-Moral hazards
Moral hazards - ANSWER-include questionable business practices or a failing
business.
,James West is a claims rep with Hatters Insurance. As he learns how to handle a
claim from start to finish, which one of the following best describes the correct
order for him to follow during this process? - ANSWER-Identifying the policy,
calculating a loss reserve, determining the cause of loss, preparing a loss statement
Margaret was severely injured and scarred due to a recent accident. Which one of
the following is an example of general damages Margaret received? - ANSWER-
Compensation for disfigurement
Donna is an insurance producer. She makes an appointment with potential
policyholder Sandie to review her loss exposures. She asks Sandie to complete a
questionnaire to assist her in this effort. Donna is conducting a - ANSWER-Risk
management review
Rachel is a new employee of Westley Insurance, and has been asked to review
some existing policies to become familiar with the types of policies she will be
working with. Which one of the following will Rachel find is true as she conducts
her review? - ANSWER-Rachel finds the policy begins with a coverage overview
and then goes into more coverage details.
Sports, Inc. is looking to obtain a commercial property policy on its building for
$400,000. If their insurer decides to charge them a rate of $0.50 per $100 of
building insurance, what premium must Sports, Inc. pay? - ANSWER-$2,000
Destructive competition in the insurance industry could result in - ANSWER-
Insurance shortages
The financial report for Hometown Insurer contains the following information:
Earned premiums$4,000,000Written premiums$5,000,000Net investment
income$1,000,000Incurred losses$3,000,000Incurred underwriting
expenses$2,000,000
, What is Hometown Insurer's loss ratio? - ANSWER-75%
Loss Ratio - ANSWER-incurred losses divided by its earned premiums
Jessie is a new customer service representative (CSR) at the Winfield Agency.
Jessie usually engages in all the following activities, EXCEPT: - ANSWER-
Determining coverage quotes
Riley Turner is performing a comprehensive evaluation of Hardwick Enterprises to
make sure its insurance and risk management efforts are serving the organization
appropriately. Which one of the following will be true in regard to this effort? -
ANSWER-Besides risk management goals being attainable, they should also pose
a challenge.
Rachel is considering investing in the stock of an insurance company. Which one
of the following is likely to provide the best indication of the insurer's financial
position at this point in time? - ANSWER-Balance sheet
Balance Sheet - ANSWER-provides the best indication of its financial position
because it shows admitted assets, liabilities, and policyholders' surplus at a
particular point in time.
Which one of the following is the amount of business an insurer can write based on
regulatory guidelines, usually a comparsion of the insurer's written premiums to
the policyholders' surplus? - ANSWER-Capacity
The two main sectors of the insurance industry are - ANSWER-Property-casualty
insurance and life-health insurance
