EMILLECT 2024/2025 ACADEMIC YEAR ©2024 EMILLECT. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER, 2024
AINS 101 Exam Study Guide with
Complete Solutions
Bill is an insurance producer for and employed by ABC Insurance Company (ABC). He represents
only ABC when marketing insurance products, and uses an administrative staff also employed by
ABC. Bill is a producer in the - Answer✔✔-Direct writer marketing system
Because the insurance company usually determines policy wording and the insured has little
choice but to "take it or leave it," an insurance contract is a - Answer✔✔-Contract of adhesion
Which one of the following best explains why producers should be alert to changes in clients'
loss exposures? - Answer✔✔-Implemented risk management techniques may prove to be
ineffective or become obsolete
At Greenfield Insurance Company, Bernadette and Rachel are corporate underwriters, and
Tomas and Jose are field underwriters. All of the following are underwriting activities typically
performed by corporate (or staff) underwriters like Bernadette and Rachel, EXCEPT: -
Answer✔✔-Support producers and insureds
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? - Answer✔✔-Moral hazards
Page 1/18
,EMILLECT 2024/2025 ACADEMIC YEAR ©2024 EMILLECT. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER, 2024
Moral hazards - Answer✔✔-include questionable business practices or a failing business.
James West is a claims rep with Hatters Insurance. As he learns how to handle a claim from start
to finish, which one of the following best describes the correct order for him to follow during
this process? - Answer✔✔-Identifying the policy, calculating a loss reserve, determining the
cause of loss, preparing a loss statement
Margaret was severely injured and scarred due to a recent accident. Which one of the following
is an example of general damages Margaret received? - Answer✔✔-Compensation for
disfigurement
Donna is an insurance producer. She makes an appointment with potential policyholder Sandie
to review her loss exposures. She asks Sandie to complete a questionnaire to assist her in this
effort. Donna is conducting a - Answer✔✔-Risk management review
Rachel is a new employee of Westley Insurance, and has been asked to review some existing
policies to become familiar with the types of policies she will be working with. Which one of the
following will Rachel find is true as she conducts her review? - Answer✔✔-Rachel finds the
policy begins with a coverage overview and then goes into more coverage details.
Sports, Inc. is looking to obtain a commercial property policy on its building for $400,000. If
their insurer decides to charge them a rate of $0.50 per $100 of building insurance, what
premium must Sports, Inc. pay? - Answer✔✔-$2,000
Destructive competition in the insurance industry could result in - Answer✔✔-Insurance
shortages
Page 2/18
, EMILLECT 2024/2025 ACADEMIC YEAR ©2024 EMILLECT. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER, 2024
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 is Hometown Insurer's loss ratio? - Answer✔✔-75%
Loss Ratio - Answer✔✔-incurred losses divided by its earned premiums
Jessie is a new customer service representative (CSR) at the Winfield Agency. Jessie usually
engages in all the following activities, EXCEPT: - Answer✔✔-Determining coverage quotes
Riley Turner is performing a comprehensive evaluation of Hardwick Enterprises to make sure its
insurance and risk management efforts are serving the organization appropriately. Which one of
the following will be true in regard to this effort? - Answer✔✔-Besides risk management goals
being attainable, they should also pose a challenge.
Rachel is considering investing in the stock of an insurance company. Which one of the following
is likely to provide the best indication of the insurer's financial position at this point in time? -
Answer✔✔-Balance sheet
Balance Sheet - Answer✔✔-provides the best indication of its financial position because it
shows admitted assets, liabilities, and policyholders' surplus at a particular point in time.
Which one of the following is the amount of business an insurer can write based on regulatory
guidelines, usually a comparsion of the insurer's written premiums to the policyholders'
surplus? - Answer✔✔-Capacity
Page 3/18
AINS 101 Exam Study Guide with
Complete Solutions
Bill is an insurance producer for and employed by ABC Insurance Company (ABC). He represents
only ABC when marketing insurance products, and uses an administrative staff also employed by
ABC. Bill is a producer in the - Answer✔✔-Direct writer marketing system
Because the insurance company usually determines policy wording and the insured has little
choice but to "take it or leave it," an insurance contract is a - Answer✔✔-Contract of adhesion
Which one of the following best explains why producers should be alert to changes in clients'
loss exposures? - Answer✔✔-Implemented risk management techniques may prove to be
ineffective or become obsolete
At Greenfield Insurance Company, Bernadette and Rachel are corporate underwriters, and
Tomas and Jose are field underwriters. All of the following are underwriting activities typically
performed by corporate (or staff) underwriters like Bernadette and Rachel, EXCEPT: -
Answer✔✔-Support producers and insureds
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? - Answer✔✔-Moral hazards
Page 1/18
,EMILLECT 2024/2025 ACADEMIC YEAR ©2024 EMILLECT. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER, 2024
Moral hazards - Answer✔✔-include questionable business practices or a failing business.
James West is a claims rep with Hatters Insurance. As he learns how to handle a claim from start
to finish, which one of the following best describes the correct order for him to follow during
this process? - Answer✔✔-Identifying the policy, calculating a loss reserve, determining the
cause of loss, preparing a loss statement
Margaret was severely injured and scarred due to a recent accident. Which one of the following
is an example of general damages Margaret received? - Answer✔✔-Compensation for
disfigurement
Donna is an insurance producer. She makes an appointment with potential policyholder Sandie
to review her loss exposures. She asks Sandie to complete a questionnaire to assist her in this
effort. Donna is conducting a - Answer✔✔-Risk management review
Rachel is a new employee of Westley Insurance, and has been asked to review some existing
policies to become familiar with the types of policies she will be working with. Which one of the
following will Rachel find is true as she conducts her review? - Answer✔✔-Rachel finds the
policy begins with a coverage overview and then goes into more coverage details.
Sports, Inc. is looking to obtain a commercial property policy on its building for $400,000. If
their insurer decides to charge them a rate of $0.50 per $100 of building insurance, what
premium must Sports, Inc. pay? - Answer✔✔-$2,000
Destructive competition in the insurance industry could result in - Answer✔✔-Insurance
shortages
Page 2/18
, EMILLECT 2024/2025 ACADEMIC YEAR ©2024 EMILLECT. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER, 2024
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 is Hometown Insurer's loss ratio? - Answer✔✔-75%
Loss Ratio - Answer✔✔-incurred losses divided by its earned premiums
Jessie is a new customer service representative (CSR) at the Winfield Agency. Jessie usually
engages in all the following activities, EXCEPT: - Answer✔✔-Determining coverage quotes
Riley Turner is performing a comprehensive evaluation of Hardwick Enterprises to make sure its
insurance and risk management efforts are serving the organization appropriately. Which one of
the following will be true in regard to this effort? - Answer✔✔-Besides risk management goals
being attainable, they should also pose a challenge.
Rachel is considering investing in the stock of an insurance company. Which one of the following
is likely to provide the best indication of the insurer's financial position at this point in time? -
Answer✔✔-Balance sheet
Balance Sheet - Answer✔✔-provides the best indication of its financial position because it
shows admitted assets, liabilities, and policyholders' surplus at a particular point in time.
Which one of the following is the amount of business an insurer can write based on regulatory
guidelines, usually a comparsion of the insurer's written premiums to the policyholders'
surplus? - Answer✔✔-Capacity
Page 3/18
