AINS 101 NEWEST COMPLETE 2024 QUESTION WITH 100 %
CORRECT ANSWERS | VERIFIED
Risk - ANSWER-Uncertainty about an outcome, positive or negative
Pooling - ANSWER-All insureds share costs of each others losses. All put money into a
fund that is used to pay losses as they occur.
Helps keep the premium affordable
Helps cover large losses
Benefits of Insurance - ANSWER-- Pay for losses
- Manage cash flow uncertainty
- Comply with legal requirements
- Promote risk control activity
- Efficient use of insured's resources
- Support for insured's credit
- Source of investment funds
- Reduce social burden
Transfer - ANSWER-Transfer financial consequences of unanticipated events to an
insurer
Types of personal insurance - ANSWER-Personal Auto
Personal Umbrella
Homeowners
P&C-Property and Casualty aka Property and Liability
Commercial insurance - ANSWER-Businesses get packages, packages have crime,
property, umbrella, auto etc...
Used to have to buy them all separately
Proprietary Insurers - ANSWER-Earn a profit for owners, insurers
Cooperative Insurers - ANSWER-Provide insurance at a minimum cost to their owners
who are the policy holders
Stock Insurers - ANSWER-Objective is to earn profit
attract stockholders with expectation of returns
, Mutual Insurers - ANSWER-Large national/regional insurers
mutual insurers pay dividends to policy holders as a return of portion of premiums paid
Surplus Lines - ANSWER-Provides coverages unavailable in standard insurers market.
Can go beyond state set values
Reciprocal Insurance Exchanges - ANSWER-Each member is both an insured and an
insuree
Lloyds - ANSWER-Insurance-Reinsurance Exchange
Captive Insurer/Reinsurer - ANSWER-Covers losses of specific organizations
Government Insurance - ANSWER-Fill unmet insurance
Facilitate required insurance purchases
Provide efficiency and convenience
Achieve social goals
Pure Risk - ANSWER-No chance of gain
Speculative Risk - ANSWER-Can be positive or negative
3 reasons for regulation - ANSWER-Protect consumers-verify policy benefits, make
sure insurers are honest and accessible
Maintain insurer solvency- have to have enough cash on hand to fulfil obligations.
insurers who cant pay for the losses they've insured are insolvent
Prevent destructive competition- maintain financial health and prevent policies from
being set too low.
Not charging enough premium could leave insurer without enough cash to pay covered
claims
Charging low rates can be an attempt to put competitors out of business
Income statements - ANSWER-Revenues/expenses/NET Gain
Earned premiums - ANSWER-portion of premium applied to time of policy that has
already occured.
CORRECT ANSWERS | VERIFIED
Risk - ANSWER-Uncertainty about an outcome, positive or negative
Pooling - ANSWER-All insureds share costs of each others losses. All put money into a
fund that is used to pay losses as they occur.
Helps keep the premium affordable
Helps cover large losses
Benefits of Insurance - ANSWER-- Pay for losses
- Manage cash flow uncertainty
- Comply with legal requirements
- Promote risk control activity
- Efficient use of insured's resources
- Support for insured's credit
- Source of investment funds
- Reduce social burden
Transfer - ANSWER-Transfer financial consequences of unanticipated events to an
insurer
Types of personal insurance - ANSWER-Personal Auto
Personal Umbrella
Homeowners
P&C-Property and Casualty aka Property and Liability
Commercial insurance - ANSWER-Businesses get packages, packages have crime,
property, umbrella, auto etc...
Used to have to buy them all separately
Proprietary Insurers - ANSWER-Earn a profit for owners, insurers
Cooperative Insurers - ANSWER-Provide insurance at a minimum cost to their owners
who are the policy holders
Stock Insurers - ANSWER-Objective is to earn profit
attract stockholders with expectation of returns
, Mutual Insurers - ANSWER-Large national/regional insurers
mutual insurers pay dividends to policy holders as a return of portion of premiums paid
Surplus Lines - ANSWER-Provides coverages unavailable in standard insurers market.
Can go beyond state set values
Reciprocal Insurance Exchanges - ANSWER-Each member is both an insured and an
insuree
Lloyds - ANSWER-Insurance-Reinsurance Exchange
Captive Insurer/Reinsurer - ANSWER-Covers losses of specific organizations
Government Insurance - ANSWER-Fill unmet insurance
Facilitate required insurance purchases
Provide efficiency and convenience
Achieve social goals
Pure Risk - ANSWER-No chance of gain
Speculative Risk - ANSWER-Can be positive or negative
3 reasons for regulation - ANSWER-Protect consumers-verify policy benefits, make
sure insurers are honest and accessible
Maintain insurer solvency- have to have enough cash on hand to fulfil obligations.
insurers who cant pay for the losses they've insured are insolvent
Prevent destructive competition- maintain financial health and prevent policies from
being set too low.
Not charging enough premium could leave insurer without enough cash to pay covered
claims
Charging low rates can be an attempt to put competitors out of business
Income statements - ANSWER-Revenues/expenses/NET Gain
Earned premiums - ANSWER-portion of premium applied to time of policy that has
already occured.
