AINS 101 | Newest and Updated Questions
and Answers | 2026 Review Guide
• Risk -✓✓ Which one of the following represents uncertainty about outcomes that
can be negative or positive?
• Insureds share the cost of each other's losses. -✓✓ Which one of the following
best describes the concept of pooling?
• Personal property-casualty insurance policy. -✓✓ A homeowners policy is a type
of
Select one:
• Commercial crime insurance. -✓✓ Coverage for money and other business
property from various causes of loss such as burglary, robbery, theft, and employee
dishonesty typically is provided by
• Mutual Insurer -✓✓ 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
• Government programs can meet legitimate public demands unmet by private
insurers. -✓✓ Which one of the following correctly describes a reason for
government involvement in property-casualty insurance?
• Artificial Intel -✓✓ If a fund manager violates the investment guidelines, the
computer immediately notifies MFC's internal control director, and corrective
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
,• Speculative risk -✓✓ 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. Which
one of the following types of risk is this for Jimmy?
• East Insurance comes up with a new rate structure allowing "preferred
customers" discounted policies when they continually renew year after year; East
eventually loses needed revenue but is rewarded by its competitors leaving the
market. -✓✓ One of the reasons for insurance regulation is to prevent destructive
competition. In which one of the following scenarios would destructive
competition be exhibited?
• Insurance regulation protects customers by guaranteeing insurance is available
and accessible to everyone who needs it. -✓✓ Carlos is new to the insurance
business and is learning about insurance regulation and what he, now working with
Grady Insurance, will need to be aware of regarding the subject of compliance.
Which one of the following will Carlos find is accurate as he better understands
why insurance is regulated?
• Solvency -✓✓ What term refers to the ability of an insurer to meet its obligations
as they become due?
• Total Liabilities -✓✓ An insurer's financial statement shows a loss reserve and an
unearned premium reserve. These reserves are part of the insurer's
• Unearned Premiums -✓✓ Which one of the following is part of written
premiums?
, • Balance Sheet -✓✓ Which one of the following types of financial statements
shows the financial position of an insurance company at any particular point in
time?
• ometown Insurer's expense ratio is its incurred underwriting expenses
($2,000,000) divided by its written premiums ($5,000,000), or 40 percent. -✓✓
The financial report for Hometown Insurer contains the following information:
Earned premiums $4,000,000
Written premiums $5,000,000
Net investment income $1,000,000
Incurred Losses $3,000,000
Incurred underwriting expense $2,000,000
• 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 was the Hometown Insurer's combined ratio? -✓✓ Hometown's combined
ratio equals its loss ratio ($3,000,000/$4,000,000) or 75 percent, plus its expense
ratio ($2,000,000/$5,000,000) or 40 percent, for a total of 115 percent.
• The insurer is using its own employees as producers. -✓✓ The key to the direct
writer marketing system is that
• Is free to work with as many different insurers as it wants. -✓✓ Spencer
Insurance Associates is an independent agency selling primarily homeowners
policies. This agency
and Answers | 2026 Review Guide
• Risk -✓✓ Which one of the following represents uncertainty about outcomes that
can be negative or positive?
• Insureds share the cost of each other's losses. -✓✓ Which one of the following
best describes the concept of pooling?
• Personal property-casualty insurance policy. -✓✓ A homeowners policy is a type
of
Select one:
• Commercial crime insurance. -✓✓ Coverage for money and other business
property from various causes of loss such as burglary, robbery, theft, and employee
dishonesty typically is provided by
• Mutual Insurer -✓✓ 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
• Government programs can meet legitimate public demands unmet by private
insurers. -✓✓ Which one of the following correctly describes a reason for
government involvement in property-casualty insurance?
• Artificial Intel -✓✓ If a fund manager violates the investment guidelines, the
computer immediately notifies MFC's internal control director, and corrective
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
,• Speculative risk -✓✓ 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. Which
one of the following types of risk is this for Jimmy?
• East Insurance comes up with a new rate structure allowing "preferred
customers" discounted policies when they continually renew year after year; East
eventually loses needed revenue but is rewarded by its competitors leaving the
market. -✓✓ One of the reasons for insurance regulation is to prevent destructive
competition. In which one of the following scenarios would destructive
competition be exhibited?
• Insurance regulation protects customers by guaranteeing insurance is available
and accessible to everyone who needs it. -✓✓ Carlos is new to the insurance
business and is learning about insurance regulation and what he, now working with
Grady Insurance, will need to be aware of regarding the subject of compliance.
Which one of the following will Carlos find is accurate as he better understands
why insurance is regulated?
• Solvency -✓✓ What term refers to the ability of an insurer to meet its obligations
as they become due?
• Total Liabilities -✓✓ An insurer's financial statement shows a loss reserve and an
unearned premium reserve. These reserves are part of the insurer's
• Unearned Premiums -✓✓ Which one of the following is part of written
premiums?
, • Balance Sheet -✓✓ Which one of the following types of financial statements
shows the financial position of an insurance company at any particular point in
time?
• ometown Insurer's expense ratio is its incurred underwriting expenses
($2,000,000) divided by its written premiums ($5,000,000), or 40 percent. -✓✓
The financial report for Hometown Insurer contains the following information:
Earned premiums $4,000,000
Written premiums $5,000,000
Net investment income $1,000,000
Incurred Losses $3,000,000
Incurred underwriting expense $2,000,000
• 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 was the Hometown Insurer's combined ratio? -✓✓ Hometown's combined
ratio equals its loss ratio ($3,000,000/$4,000,000) or 75 percent, plus its expense
ratio ($2,000,000/$5,000,000) or 40 percent, for a total of 115 percent.
• The insurer is using its own employees as producers. -✓✓ The key to the direct
writer marketing system is that
• Is free to work with as many different insurers as it wants. -✓✓ Spencer
Insurance Associates is an independent agency selling primarily homeowners
policies. This agency
