AINS 21 - Segment B Exam 2026
Questions and Answers
When an insurance company appoints an insurance agent to serve as its
representative, what specifies the scope of authority given to the agent in this
relationship?
A. A unilateral contract
B. Binding authority
C. An agency contract
D. Implied authority - Correct answer-C. An agency contract
Which one of the following best describes the elements of authority and control in
an agency relationship?
A. Neither the agent nor the principal have authority or control over each other's
actions.
B. The agent and principal both have authority and control over each other's
actions.
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,C. The principal has authority to act for the agent; the agent has control over the
principal's actions on the agent's behalf.
D. The agent has authority to act for the principal; the principal has control over
the agent's actions on the principal's behalf. - Correct answer-D. The agent has
authority to act for the principal; the principal has control over the agent's actions
on the principal's behalf.
In an insurance agency relationship, the agent's fundamental responsibility is to act
for the benefit of the
A. Insured.
B. Insurer.
C. Policyholder.
D. Broker. - Correct answer-B. Insurer.
An agent may at times act on behalf of the principal in ways that the principal did
not intend, and a third party reasonably believes that the agent has sufficient
authority. This authority is known as
A. Apparent authority.
B. Contractual authority.
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,C. Implied authority.
D. Express authority - Correct answer-A. Apparent authority.
From an insured's point of view, relative to the concept of agency, little distinction
exists between the
A. Broker and the claimant.
B. Insurance agent and the insurance department.
C. Insurer and the insurance department.
D. Insurance agent and the insurer. - Correct answer-D. Insurance agent and the
insurer.
Insurance Company is updating its marketing plan for the coming year. The
management team is proposing a combination of the distribution systems and
channels. A consideration unique to combining distribution systems and channels is
A. Which system will be the most cost effective to implement that the insurer has
used successfully in the past.
B. If customers will receive a consistent message about products and services no
matter which system they choose.
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, C. How the insurer will market to all channels so that potential customers will
know what is available to them.
D. If the insurer will offer a discount in premium to customers who purchase
insurance over the Internet. - Correct answer-B. If customers will receive a
consistent message about products and services no matter which system they
choose.
Independent agent networks are known as
A. Direct writers.
B. Agent clusters.
C. Exclusive agents.
D. Agent forces. - Correct answer-B. Agent clusters.
An independent business owner or firm that sells insurance by representing
customers rather than insurers is which one of the following?
A. An independent adjuster
B. An underwriter
C. An independent agent
D. An insurance broker - Correct answer-D. An insurance broker
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Questions and Answers
When an insurance company appoints an insurance agent to serve as its
representative, what specifies the scope of authority given to the agent in this
relationship?
A. A unilateral contract
B. Binding authority
C. An agency contract
D. Implied authority - Correct answer-C. An agency contract
Which one of the following best describes the elements of authority and control in
an agency relationship?
A. Neither the agent nor the principal have authority or control over each other's
actions.
B. The agent and principal both have authority and control over each other's
actions.
©COPYRIGHT 2025, ALL RIGHTS RESERVE 1
,C. The principal has authority to act for the agent; the agent has control over the
principal's actions on the agent's behalf.
D. The agent has authority to act for the principal; the principal has control over
the agent's actions on the principal's behalf. - Correct answer-D. The agent has
authority to act for the principal; the principal has control over the agent's actions
on the principal's behalf.
In an insurance agency relationship, the agent's fundamental responsibility is to act
for the benefit of the
A. Insured.
B. Insurer.
C. Policyholder.
D. Broker. - Correct answer-B. Insurer.
An agent may at times act on behalf of the principal in ways that the principal did
not intend, and a third party reasonably believes that the agent has sufficient
authority. This authority is known as
A. Apparent authority.
B. Contractual authority.
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,C. Implied authority.
D. Express authority - Correct answer-A. Apparent authority.
From an insured's point of view, relative to the concept of agency, little distinction
exists between the
A. Broker and the claimant.
B. Insurance agent and the insurance department.
C. Insurer and the insurance department.
D. Insurance agent and the insurer. - Correct answer-D. Insurance agent and the
insurer.
Insurance Company is updating its marketing plan for the coming year. The
management team is proposing a combination of the distribution systems and
channels. A consideration unique to combining distribution systems and channels is
A. Which system will be the most cost effective to implement that the insurer has
used successfully in the past.
B. If customers will receive a consistent message about products and services no
matter which system they choose.
©COPYRIGHT 2025, ALL RIGHTS RESERVE 3
, C. How the insurer will market to all channels so that potential customers will
know what is available to them.
D. If the insurer will offer a discount in premium to customers who purchase
insurance over the Internet. - Correct answer-B. If customers will receive a
consistent message about products and services no matter which system they
choose.
Independent agent networks are known as
A. Direct writers.
B. Agent clusters.
C. Exclusive agents.
D. Agent forces. - Correct answer-B. Agent clusters.
An independent business owner or firm that sells insurance by representing
customers rather than insurers is which one of the following?
A. An independent adjuster
B. An underwriter
C. An independent agent
D. An insurance broker - Correct answer-D. An insurance broker
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