AINS 101 Exam Prep
AINS 101 EXAM PREP NEWEST ACTUAL EXAM COMPLETE 350
QUESTIONS AND CORRECT DETAILED ANSWERS (VERIFIED ANSWERS)
|ALREADY GRADED A+||BRAND NEW VERSION!!
In an effort to reduce expenses, increase profitability, and reduce human errors;
ABC Insurance Company decided to automate most of its personal lines
underwriting function. The company now uses standardized application forms that
are submitted electronically to one of the company's regional offices. At each
regional office, a computer with a scanner reads the applications. The computer
has been programmed with acceptable answers to the questions. If the answers
on the application are all acceptable, the policy is automatically issued. Rejected
applications are automatically forwarded to a human underwriter who reviews
them. The use of this technology has reduced the company's expense ratio by two
and a half percent, and reduced the time it takes to issue a policy. ABC Insurance
Company's use of computers to evaluate applications electronically is an
application of
A. Radiant sensors.
B. Artificial intelligence.
C. Risk management information systems.
D. Actuator technology.
Artificial intelligence.
Jimmy decided to buy a house in his neighborhood that had been foreclosed on
by the bank that held the mortgage. He is hoping to do some renovation and
repair work on the house, and then sell it for a quick profit. What type of risk is
this?
Speculative Risk
Which one of the following best describes the concept of pooling?
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, AINS 101 Exam Prep
A. The financial consequences of unanticipated losses are transferred to an
insurer.
B. Risk management is concerned with positive and negative risks.
C. Insureds share the cost of each other's losses.
D. Insurance benefits society as a whole.
Insureds share the cost of each other's losses.
Which one of the following represents uncertainty about outcomes that can be
negative or positive?
A. Loss exposure
B. Transfer
C. Risk
D. Pooling
Risk
Coverage for money and other business property from various causes of loss such
as burglary, robbery, theft, and employee dishonesty typically is provided by
Commercial crime insurance.
The insurance agent suggested that Sally's Snack Shop buy a policy that combines
property, crime, and liability coverages into one policy. This is referred to as a(n)
Commercial Package Policy (CCP)
Which one of the following describes the characteristics of a mutual insurance
company?
A. A corporation owned by policyholders that provides insurance to its
policyholders.
B. An unincorporated association that provides reciprocal coverage to subscribers.
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, AINS 101 Exam Prep
C. An unincorporated association that earns profits for its individual investors.
D. A corporation owned by stockholders that earns profits for the stockholders.
A corporation owned by policyholders that provides insurance to its policyholders.
A reinsurance company
A. Assumes loss exposures from a primary insurer.
B. Provides primary insurance for loss exposures that private insurers are unwilling
to provide.
C. Is formed to write all or part of the insurance for a parent company.
D. Transfers losses to a primary insurer.
Assumes loss exposures from a primary insurer.
Autonomous Vehicle Applications (AVA) is a start-up company that develops safety
technologies that can be sold to companies that are producing autonomous
vehicles. One technology AVA is developing allows an autonomous vehicle to
detect, extract, and analyze images; and then to respond to the images. For
example, the technology would detect a presence in a crosswalk, extract the
image, and a computer would analyze the image. When the image was
determined to be a human being, the vehicle would slow down or stop until the
crosswalk was clear. This technology, which is designed to capture and analyze
images, and to act on the recognition of the image; is called
Computer Vision
Mutual Fund Company (MFC) offers a wide array of mutual fund options to
investors. Each mutual fund has a different fund objective and set of investment
guidelines that apply to the fund. While MFC gives considerable freedom to its
fund portfolio managers, they are required to abide by the fund's investment
guidelines. To monitor compliance, MFC developed a computer algorithm. The
computer algorithm continuously monitors each fund's compliance with
investment guidelines. If a fund manager violates the investment guidelines, the
computer immediately notifies MFC's internal control director, and corrective
3|Page
, AINS 101 Exam Prep
action is taken. MFC's use of the computer algorithm to monitor investment
compliance and to provide notification when corrective action is necessary
illustrates use of
Artificial Intelligence
The primary role of insurance is to
Indemnify individuals and organizations for covered losses
Which one of the following best describes the concept of pooling?
A. Insureds share the cost of each other's losses.
B. Risk management is concerned with positive and negative risks.
C. The financial consequences of unanticipated losses are transferred to an
insurer.
D. Insurance benefits society as a whole.
Insureds share the cost of each other's losses.
A type of insurer that is owned by policyholders and may pay dividends to
policyholders as a return of a portion of premiums paid is a
Mutual insurer.
The state of Maryland operates a residual auto plan (the Maryland Auto Insurance
Fund—MAIF) that provides coverage for drivers who are unable to obtain
coverage from private insurers. Which one of the following is the best rationale for
the MAIF program?
A. Private insurers face limited competition, and the state increases competitive
pressures by operating this type of plan.
B. Auto insurance is compulsory, and the program makes it possible for all drivers
to have reasonably priced insurance.
C. Private insurers overcharge for auto insurance, and the state provides a low-
4|Page
AINS 101 EXAM PREP NEWEST ACTUAL EXAM COMPLETE 350
QUESTIONS AND CORRECT DETAILED ANSWERS (VERIFIED ANSWERS)
|ALREADY GRADED A+||BRAND NEW VERSION!!
In an effort to reduce expenses, increase profitability, and reduce human errors;
ABC Insurance Company decided to automate most of its personal lines
underwriting function. The company now uses standardized application forms that
are submitted electronically to one of the company's regional offices. At each
regional office, a computer with a scanner reads the applications. The computer
has been programmed with acceptable answers to the questions. If the answers
on the application are all acceptable, the policy is automatically issued. Rejected
applications are automatically forwarded to a human underwriter who reviews
them. The use of this technology has reduced the company's expense ratio by two
and a half percent, and reduced the time it takes to issue a policy. ABC Insurance
Company's use of computers to evaluate applications electronically is an
application of
A. Radiant sensors.
B. Artificial intelligence.
C. Risk management information systems.
D. Actuator technology.
Artificial intelligence.
Jimmy decided to buy a house in his neighborhood that had been foreclosed on
by the bank that held the mortgage. He is hoping to do some renovation and
repair work on the house, and then sell it for a quick profit. What type of risk is
this?
Speculative Risk
Which one of the following best describes the concept of pooling?
1|Page
, AINS 101 Exam Prep
A. The financial consequences of unanticipated losses are transferred to an
insurer.
B. Risk management is concerned with positive and negative risks.
C. Insureds share the cost of each other's losses.
D. Insurance benefits society as a whole.
Insureds share the cost of each other's losses.
Which one of the following represents uncertainty about outcomes that can be
negative or positive?
A. Loss exposure
B. Transfer
C. Risk
D. Pooling
Risk
Coverage for money and other business property from various causes of loss such
as burglary, robbery, theft, and employee dishonesty typically is provided by
Commercial crime insurance.
The insurance agent suggested that Sally's Snack Shop buy a policy that combines
property, crime, and liability coverages into one policy. This is referred to as a(n)
Commercial Package Policy (CCP)
Which one of the following describes the characteristics of a mutual insurance
company?
A. A corporation owned by policyholders that provides insurance to its
policyholders.
B. An unincorporated association that provides reciprocal coverage to subscribers.
2|Page
, AINS 101 Exam Prep
C. An unincorporated association that earns profits for its individual investors.
D. A corporation owned by stockholders that earns profits for the stockholders.
A corporation owned by policyholders that provides insurance to its policyholders.
A reinsurance company
A. Assumes loss exposures from a primary insurer.
B. Provides primary insurance for loss exposures that private insurers are unwilling
to provide.
C. Is formed to write all or part of the insurance for a parent company.
D. Transfers losses to a primary insurer.
Assumes loss exposures from a primary insurer.
Autonomous Vehicle Applications (AVA) is a start-up company that develops safety
technologies that can be sold to companies that are producing autonomous
vehicles. One technology AVA is developing allows an autonomous vehicle to
detect, extract, and analyze images; and then to respond to the images. For
example, the technology would detect a presence in a crosswalk, extract the
image, and a computer would analyze the image. When the image was
determined to be a human being, the vehicle would slow down or stop until the
crosswalk was clear. This technology, which is designed to capture and analyze
images, and to act on the recognition of the image; is called
Computer Vision
Mutual Fund Company (MFC) offers a wide array of mutual fund options to
investors. Each mutual fund has a different fund objective and set of investment
guidelines that apply to the fund. While MFC gives considerable freedom to its
fund portfolio managers, they are required to abide by the fund's investment
guidelines. To monitor compliance, MFC developed a computer algorithm. The
computer algorithm continuously monitors each fund's compliance with
investment guidelines. If a fund manager violates the investment guidelines, the
computer immediately notifies MFC's internal control director, and corrective
3|Page
, AINS 101 Exam Prep
action is taken. MFC's use of the computer algorithm to monitor investment
compliance and to provide notification when corrective action is necessary
illustrates use of
Artificial Intelligence
The primary role of insurance is to
Indemnify individuals and organizations for covered losses
Which one of the following best describes the concept of pooling?
A. Insureds share the cost of each other's losses.
B. Risk management is concerned with positive and negative risks.
C. The financial consequences of unanticipated losses are transferred to an
insurer.
D. Insurance benefits society as a whole.
Insureds share the cost of each other's losses.
A type of insurer that is owned by policyholders and may pay dividends to
policyholders as a return of a portion of premiums paid is a
Mutual insurer.
The state of Maryland operates a residual auto plan (the Maryland Auto Insurance
Fund—MAIF) that provides coverage for drivers who are unable to obtain
coverage from private insurers. Which one of the following is the best rationale for
the MAIF program?
A. Private insurers face limited competition, and the state increases competitive
pressures by operating this type of plan.
B. Auto insurance is compulsory, and the program makes it possible for all drivers
to have reasonably priced insurance.
C. Private insurers overcharge for auto insurance, and the state provides a low-
4|Page
