AINS 101 Increasing Your Insurance IQ – Simulated Exam
(Associate in Insurance Program) EXAM 2026-2027 LATEST
UPDATED VERSION QUESTIONS AND ANSWERS
For a loss exposure to be ideally insurable it must be definite in
Select one:
A. Duration, damage, and cost.
B. Time, cause, and location.
CorrectCorrect. For a loss exposure to be ideally insurable it must be definite in time, cause, and
location.
C. Scope, origin, and coverage.
D. Value, extent, and consequences. - answer>>B. Time, cause, and location.
CorrectCorrect. For a loss exposure to be ideally insurable it must be definite in time, cause, and
location.
Why are insurance regulators concerned about the effects of large catastrophes?
Select one:
A. They could lead to destructive competition.
B. Licensed insurers will be unable to handle demand.
C. Insurance rates will rise.
D. Insurers may become insolvent.
CorrectCorrect. Regulators try to maintain the financial condition of insurers because poor financial
condition may lead to insolvency in the event of a large catastrophe. - answer>>D. Insurers may
become insolvent.
CorrectCorrect. Regulators try to maintain the financial condition of insurers because poor financial
condition may lead to insolvency in the event of a large catastrophe.
,Winston is skimming through his new personal auto policy that just arrived. Winston discovers that
every insurance policy is represented through a collection of policy provisions. He discovers all of the
following policy provisions, EXCEPT:
Select one:
A. Definitions
B. Declarations
C. Exceptions
CorrectCorrect. Winston finds the policy provisions of conditions, definitions, and declarations. The
other two main provisions in a policy are the insuring agreement, and the exclusions.
D. Conditions - answer>>C. Exceptions
CorrectCorrect. Winston finds the policy provisions of conditions, definitions, and declarations. The
other two main provisions in a policy are the insuring agreement, and the exclusions.
Which one of these is most directly associated with a satisfied customer?
Select one:
A. Soft underwriting cycles
B. Decreased cost efficiencies
C. Leads and referrals that can be used to generate new business
CorrectCorrect. Leads and referrals that can be used to generate new business are most directly
associated with a satisfied customer.
D. Increased cost efficiencies - answer>>C. Leads and referrals that can be used to generate new
business
CorrectCorrect. Leads and referrals that can be used to generate new business are most directly
associated with a satisfied customer.
Allian Insurance Company is a growing regional insurer selling policies in three states, specializing in
personal auto and homeowners policies. Which one of the following is most likely true regarding Allian
and the policies it sells?
Select one:
, A. Customized coverages are usually issued through a self-contained policy.
B. Allian issues more preprinted policies than manuscript forms.
C. Allian offers modular policies for coverages common to a large number of its insureds.
IncorrectIncorrect. Allian issues more preprinted policies than manuscript forms.
D. The manuscript forms that Allian issues are developed by ISO. - answer>>B. Allian issues more
preprinted policies than manuscript forms.
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?
Select one:
A. Legal hazards
B. Moral hazards
CorrectCorrect. Auditors can identify a variety of hazards. Moral hazards include questionable business
practices or a failing business.
C. Physical hazards
D. Morale hazards - answer>>B. Moral hazards
CorrectCorrect. Auditors can identify a variety of hazards. Moral hazards include questionable business
practices or a failing business.
Earned premiums are shown on an insurer's income statement because they are
Select one:
A. Admitted assets.
B. Equal to net income.
C. Revenues.
CorrectCorrect. Earned premiums are revenues shown on an insurer's income statement.
D. Expenses. - answer>>C. Revenues.
CorrectCorrect. Earned premiums are revenues shown on an insurer's income statement.
(Associate in Insurance Program) EXAM 2026-2027 LATEST
UPDATED VERSION QUESTIONS AND ANSWERS
For a loss exposure to be ideally insurable it must be definite in
Select one:
A. Duration, damage, and cost.
B. Time, cause, and location.
CorrectCorrect. For a loss exposure to be ideally insurable it must be definite in time, cause, and
location.
C. Scope, origin, and coverage.
D. Value, extent, and consequences. - answer>>B. Time, cause, and location.
CorrectCorrect. For a loss exposure to be ideally insurable it must be definite in time, cause, and
location.
Why are insurance regulators concerned about the effects of large catastrophes?
Select one:
A. They could lead to destructive competition.
B. Licensed insurers will be unable to handle demand.
C. Insurance rates will rise.
D. Insurers may become insolvent.
CorrectCorrect. Regulators try to maintain the financial condition of insurers because poor financial
condition may lead to insolvency in the event of a large catastrophe. - answer>>D. Insurers may
become insolvent.
CorrectCorrect. Regulators try to maintain the financial condition of insurers because poor financial
condition may lead to insolvency in the event of a large catastrophe.
,Winston is skimming through his new personal auto policy that just arrived. Winston discovers that
every insurance policy is represented through a collection of policy provisions. He discovers all of the
following policy provisions, EXCEPT:
Select one:
A. Definitions
B. Declarations
C. Exceptions
CorrectCorrect. Winston finds the policy provisions of conditions, definitions, and declarations. The
other two main provisions in a policy are the insuring agreement, and the exclusions.
D. Conditions - answer>>C. Exceptions
CorrectCorrect. Winston finds the policy provisions of conditions, definitions, and declarations. The
other two main provisions in a policy are the insuring agreement, and the exclusions.
Which one of these is most directly associated with a satisfied customer?
Select one:
A. Soft underwriting cycles
B. Decreased cost efficiencies
C. Leads and referrals that can be used to generate new business
CorrectCorrect. Leads and referrals that can be used to generate new business are most directly
associated with a satisfied customer.
D. Increased cost efficiencies - answer>>C. Leads and referrals that can be used to generate new
business
CorrectCorrect. Leads and referrals that can be used to generate new business are most directly
associated with a satisfied customer.
Allian Insurance Company is a growing regional insurer selling policies in three states, specializing in
personal auto and homeowners policies. Which one of the following is most likely true regarding Allian
and the policies it sells?
Select one:
, A. Customized coverages are usually issued through a self-contained policy.
B. Allian issues more preprinted policies than manuscript forms.
C. Allian offers modular policies for coverages common to a large number of its insureds.
IncorrectIncorrect. Allian issues more preprinted policies than manuscript forms.
D. The manuscript forms that Allian issues are developed by ISO. - answer>>B. Allian issues more
preprinted policies than manuscript forms.
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?
Select one:
A. Legal hazards
B. Moral hazards
CorrectCorrect. Auditors can identify a variety of hazards. Moral hazards include questionable business
practices or a failing business.
C. Physical hazards
D. Morale hazards - answer>>B. Moral hazards
CorrectCorrect. Auditors can identify a variety of hazards. Moral hazards include questionable business
practices or a failing business.
Earned premiums are shown on an insurer's income statement because they are
Select one:
A. Admitted assets.
B. Equal to net income.
C. Revenues.
CorrectCorrect. Earned premiums are revenues shown on an insurer's income statement.
D. Expenses. - answer>>C. Revenues.
CorrectCorrect. Earned premiums are revenues shown on an insurer's income statement.
