AINS Exam Questions And Answers Verified 100% Correct 2026 | Updated
1. Documents that can become part of an insurance pol- A. Summary of available
icy include all of the following, EXCEPT: coverage options
A. Summary of available coverage options All of the answer choic-
B. Relevant statutory terms and provisions es are documents that can
C. Completed application become part of a poli-
D. Insurer's bylaws cy, except for summary of
available coverage options,
which generally does not
become part of the policy.
2. A company turnover rate well above company and D. Personnel problems that
industry averages could be a sign of need to be addressed.
A. Employee slacking. A company turnover rate
B. Financial problems that need to be addressed. well above company and in-
C. Claims-consciousness. dustry averages could be a
sign of personnel problems
D. Personnel problems that need to be addressed.
that need to be addressed.
3. Traditionally, the risk management professional's role C. Pure risk.
has been associated with loss exposures related to
Traditionally, the risk man-
A. Business risk. agement professional's role
B. Operational risk. has been associated with
C. Pure risk. loss exposures related to
D. Speculative risk. pure risk.
4. The financial report for Hometown Insurer contains D. 75%
the following information:
Hometown Insurer's loss
Earned premiums $4,000,000
ratio is its incurred loss-
Written premiums $5,000,000
es ($3,000,000) divided
Net investment income $1,000,000
, AINS Exam Questions And Answers Verified 100% Correct 2026 | Updated
Incurred losses $3,000,000 by its earned premiums
Incurred underwriting expenses $2,000,000 ($4,000,000), or 75 per-
What is Hometown Insurer's loss ratio? cent.
A. 20%
B. 30%
C. 50%
D. 75%
5. A stock insurer is distinguished from a mutual insurer A. Owners are not necessar-
by the fact that ily insureds.
A. Owners are not necessarily insureds. A stock insurer is distin-
B. It seeks to generate a profit. guished from a mutual in-
C. It is governed by a board of directors. surer by the fact that own-
D. Owners have voting rights. ers are not necessarily in-
sureds.
6. A decrease in incurred losses will generally cause a B. Expense ratio
decrease in all of the following, EXCEPT:
A decrease in incurred loss-
A. Combined ratio es would decrease the loss
B. Expense ratio ratio, which is included in
C. Overall ratio the combined ratio and the
overall operating ratio. The
D. Loss ratio
expense ratio would not
decrease.
7. A loss exposure is B. Any condition that pre-
sents the possibility of a
A. The same thing as a peril. loss.
B. Any condition that presents the possibility of a loss.
A loss exposure is any con-
, AINS Exam Questions And Answers Verified 100% Correct 2026 | Updated
C. The same thing as a hazard. dition or situation that pre-
D. Any condition that precludes the chance of loss. sents the possibility of a
loss.
8. A group of policies with a common characteristic, such A. A book of business.
as a territory or type of coverage, or all policies written
by a particular insurer, producer, or agency is referred A group of policies with
a common characteristic,
to as
such as a territory or type
A. A book of business. of coverage, or all policies
B. A coverage pool. written by a particular in-
C. A line of business. surer, producer, or agency
D. A policy group. is referred to as a book of
business.
9. Which one of the following is an example of material D. Albert tells the insurance
misrepresentation by Albert, a businessman applying agent the building is used
for property insurance on a building he owns? to store steel, but it is ac-
tually used to store steel
A. Albert does not tell the insurance agent he is about drums containing flamma-
to file for bankruptcy. ble liquids.
B. Albert does not tell the insurance agent his building
has a defective heating system that could explode at
Albert tells the insurance
any time.
agent the building is used
C. Albert tells the insurance agent he has owned
to store steel, but it is ac-
the building for seventeen years, but he has actually
owned it for eighteen years. tually used to store steel
D. Albert tells the insurance agent the building is used drums containing flamma-
ble liquids.
to store steel, but it is actually used to store steel
drums containing flammable liquids.
10. A policy provides coverage starting on April 1 with B. $200
an annual premium of $800. How much premium is
, AINS Exam Questions And Answers Verified 100% Correct 2026 | Updated
earned as of June 30? The earned premium is
$200 because three months
A. $100 of coverage have been pro-
B. $200 vided. 3/12 X $800 = $200
C. $600
D. $800
11. All commercial package policies begin with two com- D. Declarations.
ponents, namely, common policy conditions and com-
All commercial package
mon
policies begin with two
A. Coverages. components, namely, com-
B. Manuscripts. mon policy conditions
C. Modules. and common declarations.
D. Declarations. Adding the necessary forms
to make up an individual
coverage part that meets
the insured's specific needs
completes the policy.
12. An agency bill process in which the producer is usually C. The item basis.
not required to pay the insurer until the premium is
An agency bill process in
collected from the policyholder is known as
which the producer is usu-
A. The statement basis. ally not required to pay the
B. The account current basis. insurer until the premium
C. The item basis. is collected from the policy-
D. The direct bill basis. holder is known as the item
basis.
13. Which one of the following statements is correct? C. Some states require in-
surance consultants, who
A. Insurance agents are not subject to licensing re- give advice or opinions
1. Documents that can become part of an insurance pol- A. Summary of available
icy include all of the following, EXCEPT: coverage options
A. Summary of available coverage options All of the answer choic-
B. Relevant statutory terms and provisions es are documents that can
C. Completed application become part of a poli-
D. Insurer's bylaws cy, except for summary of
available coverage options,
which generally does not
become part of the policy.
2. A company turnover rate well above company and D. Personnel problems that
industry averages could be a sign of need to be addressed.
A. Employee slacking. A company turnover rate
B. Financial problems that need to be addressed. well above company and in-
C. Claims-consciousness. dustry averages could be a
sign of personnel problems
D. Personnel problems that need to be addressed.
that need to be addressed.
3. Traditionally, the risk management professional's role C. Pure risk.
has been associated with loss exposures related to
Traditionally, the risk man-
A. Business risk. agement professional's role
B. Operational risk. has been associated with
C. Pure risk. loss exposures related to
D. Speculative risk. pure risk.
4. The financial report for Hometown Insurer contains D. 75%
the following information:
Hometown Insurer's loss
Earned premiums $4,000,000
ratio is its incurred loss-
Written premiums $5,000,000
es ($3,000,000) divided
Net investment income $1,000,000
, AINS Exam Questions And Answers Verified 100% Correct 2026 | Updated
Incurred losses $3,000,000 by its earned premiums
Incurred underwriting expenses $2,000,000 ($4,000,000), or 75 per-
What is Hometown Insurer's loss ratio? cent.
A. 20%
B. 30%
C. 50%
D. 75%
5. A stock insurer is distinguished from a mutual insurer A. Owners are not necessar-
by the fact that ily insureds.
A. Owners are not necessarily insureds. A stock insurer is distin-
B. It seeks to generate a profit. guished from a mutual in-
C. It is governed by a board of directors. surer by the fact that own-
D. Owners have voting rights. ers are not necessarily in-
sureds.
6. A decrease in incurred losses will generally cause a B. Expense ratio
decrease in all of the following, EXCEPT:
A decrease in incurred loss-
A. Combined ratio es would decrease the loss
B. Expense ratio ratio, which is included in
C. Overall ratio the combined ratio and the
overall operating ratio. The
D. Loss ratio
expense ratio would not
decrease.
7. A loss exposure is B. Any condition that pre-
sents the possibility of a
A. The same thing as a peril. loss.
B. Any condition that presents the possibility of a loss.
A loss exposure is any con-
, AINS Exam Questions And Answers Verified 100% Correct 2026 | Updated
C. The same thing as a hazard. dition or situation that pre-
D. Any condition that precludes the chance of loss. sents the possibility of a
loss.
8. A group of policies with a common characteristic, such A. A book of business.
as a territory or type of coverage, or all policies written
by a particular insurer, producer, or agency is referred A group of policies with
a common characteristic,
to as
such as a territory or type
A. A book of business. of coverage, or all policies
B. A coverage pool. written by a particular in-
C. A line of business. surer, producer, or agency
D. A policy group. is referred to as a book of
business.
9. Which one of the following is an example of material D. Albert tells the insurance
misrepresentation by Albert, a businessman applying agent the building is used
for property insurance on a building he owns? to store steel, but it is ac-
tually used to store steel
A. Albert does not tell the insurance agent he is about drums containing flamma-
to file for bankruptcy. ble liquids.
B. Albert does not tell the insurance agent his building
has a defective heating system that could explode at
Albert tells the insurance
any time.
agent the building is used
C. Albert tells the insurance agent he has owned
to store steel, but it is ac-
the building for seventeen years, but he has actually
owned it for eighteen years. tually used to store steel
D. Albert tells the insurance agent the building is used drums containing flamma-
ble liquids.
to store steel, but it is actually used to store steel
drums containing flammable liquids.
10. A policy provides coverage starting on April 1 with B. $200
an annual premium of $800. How much premium is
, AINS Exam Questions And Answers Verified 100% Correct 2026 | Updated
earned as of June 30? The earned premium is
$200 because three months
A. $100 of coverage have been pro-
B. $200 vided. 3/12 X $800 = $200
C. $600
D. $800
11. All commercial package policies begin with two com- D. Declarations.
ponents, namely, common policy conditions and com-
All commercial package
mon
policies begin with two
A. Coverages. components, namely, com-
B. Manuscripts. mon policy conditions
C. Modules. and common declarations.
D. Declarations. Adding the necessary forms
to make up an individual
coverage part that meets
the insured's specific needs
completes the policy.
12. An agency bill process in which the producer is usually C. The item basis.
not required to pay the insurer until the premium is
An agency bill process in
collected from the policyholder is known as
which the producer is usu-
A. The statement basis. ally not required to pay the
B. The account current basis. insurer until the premium
C. The item basis. is collected from the policy-
D. The direct bill basis. holder is known as the item
basis.
13. Which one of the following statements is correct? C. Some states require in-
surance consultants, who
A. Insurance agents are not subject to licensing re- give advice or opinions
