AINS 101 Exam With 100% Correct Answers

AINS 101 Exam With 100% Correct Answers Which one of the following statements is correct regarding the benefits provided by insurance? A. Insurance reduces the financial consequences of loss exposures but not the related uncertainty. B. The reduction in losses paid by insurers due to risk control measures benefits individual insureds but not society as a whole. C. Insurance helps reduce the financial burden to society by compensating accident victims. D. The primary role of insurance is to meet mandatory insurance requirements. - answerC. Insurance helps reduce the financial burden to society by compensating accident victims. Which one of the following represents uncertainty about outcomes that can be negative or positive? A. Risk B. Transfer C. Loss exposure D. Pooling - answerA. Risk 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) A. Commercial package policy (CPP). B. Commercial umbrella policy. C. Employee dishonesty policy. D. Workers compensation policy. - answerA. Commercial package policy (CPP). Commercial Umbrella Policy - answerType of policy that provides broad coverage for an insured's liability over and above liability covered by an underlying contract. Commercial Crime Insurance - answerCoverage for money and other business property from various causes of loss such as burglary, robbery, theft, and employee dishonesty An insurer that was formed for the purpose of earning a profit for its stockholders is a A. Mutual insurer. B. Reciprocal insurance exchange. C. Stock insurer. D. Captive insurer. - answerC. Stock insurer. Mutual Insurer - answerAn insurer that is owned by its policyholders and formed as a corporation for the purpose of providing insurance to them. Artificial intelligence - answera subdiscipline of computer science that attempts to simulate human thinking Mechanical sensors - answermonitoring devices that can be used to determine position of components, force applied, or movement of parts. Which one of the following best describes the concept of pooling? A. The financial consequences of unanticipated losses are transferred to an insurer. B. Insureds share the cost of each other's losses. C. Risk management is concerned with positive and negative risks. D. Insurance benefits society as a whole. - answerB. 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 A. Captive insurer. B. Mutual insurer. C. Reciprocal insurance exchange. D. Stock insurer. - answerB. Mutual insurer. Speculative risk - answerA chance of loss, no loss, or gain. Pure risk - answera risk that presents the chance of loss but no opportunity for gain Strategic risk - answerA dramatic ideological shift in corporate policies after a national election is an example of strategic risk 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? A. Insurance regulation prevents insurers from covering catastrophic occurrences so insurers can remain solvent. B. The U.S. insurance industry is governed by federal laws that protect citizens by leveling the playing field for insurers and policyholders C. Insurance regulation speaks to the types of risks insurers may cover, but does not play a part in how they invest their profits. D. Insurance regulation protects customers by guaranteeing insurance is available and accessible to everyone who needs it. - answerD. Insurance regulation protects customers by guaranteeing insurance is available a