AINS 101 Exam | Most Recent Questions and
Answers | 2026 Update | Exam Review Pack
• Adverse selection -✓✓ Insuring individuals with a high probability of loss at a cost
lower than the insurer would normally charge for that risk because it wasn't aware of the
actual risk involved.
• Binder -✓✓ A temporary written or oral agreement to provide insurance coverage until
a formal written policy is issued.
• Book of business -✓✓ A group of policies with a common characteristic, such as
territory or type of coverage, or all policies written by a particular insurer or agency.
• Broker -✓✓ An independent producer who represents insurance customers.
• Brokerage -✓✓ Compensation in the form of a flat fee or a commission that is paid by
the reinsurer to the reinsurance intermediary for services provided.
• Capacity -✓✓ The amount of business an insurer is able to write, usually based on a
comparison of the insurer's written premiums to its policyholders' surplus
• Catastrophe model -✓✓ A type of computer program that estimates losses from future
potential catastrophic events.
• Certificate of insurance -✓✓ A brief description of insurance coverage prepared by an
insurer or its agent and commonly used by policyholders to provide evidence of
insurance.
• Claim -✓✓ A demand by a person or business seeking to recover from an insurer for a
loss that may be covered by an insurance policy.
• Claimant -✓✓ A party that makes a claim and that can be either a first-party claimant
or a third-party claimant.
• Claims representative -✓✓ A person responsible for investigating, evaluating, and
settling claims.
• Compensatory damages -✓✓ A payment awarded by a court to reimburse a victim for
actual harm.
• Condition -✓✓ Any provision in an insurance policy that qualifies an otherwise
enforceable promise of the insurer.
Answers | 2026 Update | Exam Review Pack
• Adverse selection -✓✓ Insuring individuals with a high probability of loss at a cost
lower than the insurer would normally charge for that risk because it wasn't aware of the
actual risk involved.
• Binder -✓✓ A temporary written or oral agreement to provide insurance coverage until
a formal written policy is issued.
• Book of business -✓✓ A group of policies with a common characteristic, such as
territory or type of coverage, or all policies written by a particular insurer or agency.
• Broker -✓✓ An independent producer who represents insurance customers.
• Brokerage -✓✓ Compensation in the form of a flat fee or a commission that is paid by
the reinsurer to the reinsurance intermediary for services provided.
• Capacity -✓✓ The amount of business an insurer is able to write, usually based on a
comparison of the insurer's written premiums to its policyholders' surplus
• Catastrophe model -✓✓ A type of computer program that estimates losses from future
potential catastrophic events.
• Certificate of insurance -✓✓ A brief description of insurance coverage prepared by an
insurer or its agent and commonly used by policyholders to provide evidence of
insurance.
• Claim -✓✓ A demand by a person or business seeking to recover from an insurer for a
loss that may be covered by an insurance policy.
• Claimant -✓✓ A party that makes a claim and that can be either a first-party claimant
or a third-party claimant.
• Claims representative -✓✓ A person responsible for investigating, evaluating, and
settling claims.
• Compensatory damages -✓✓ A payment awarded by a court to reimburse a victim for
actual harm.
• Condition -✓✓ Any provision in an insurance policy that qualifies an otherwise
enforceable promise of the insurer.
