AINS 101 COMPREHENSIVE UPDATED EXAM QUESTIONS
AND ANSWERS SURE A+
✔✔Commercial Umbrella Insurance - ✔✔Provides additional liability limits beyond those
provided by other commercial policies, protecting a business in the event of a large
liability loss
✔✔Private insurers classified by two basic forms of ownership - ✔✔1. Proprietary =
Earn a profit from their owners
2. Cooperative = Provide insurance at minimum cost to owners, who are policy holders
✔✔Common Private Insurers - ✔✔1. Stock
2. Mutual
3. Surplus Lines
4. Reinsurance
5. Reciprocal Insurance Exchanges
6. Lloyd's
7. Captive
✔✔Stock Private Insurer - ✔✔Earn a profit and attract stockholders by expectations of
investment returns
✔✔Mutual Private Insurer - ✔✔Pay dividends to policyholders as a return of a portion of
premiums paid
✔✔Surplus Lines Insurer - ✔✔Provide coverages unavailable in the standard market
(ex: business may need new type of coverage for new product or service)
✔✔Reinsurance - ✔✔Allows a primary insurer to transfer some loss exposures to
another insurer, the reinsurer
-Can help small insurer provide insurance for large accounts-
✔✔Lloyd's - ✔✔The insurance and reinsurance marketplace
-"stock exchange"
✔✔Captive Private Insurer - ✔✔Formed to cover loss exposures of specific
organizations
✔✔Government Programs - ✔✔When private insurers are unable/unwilling to satisfied
legitimate needs:
1. Fill unmet insurance needs
2. Facilitate required insurance purchases
3. Promote efficiency and convivence
4. Achieve social goals
-can act as an insurer or partner with private insurers-
, ✔✔Pure Risk - ✔✔Beyond human control and can ONLY result in a loss
✔✔Speculative Risk - ✔✔Taken on voluntarily and can result EITHER profit or loss
✔✔Hazard Risk (Pure) - ✔✔Arises from property, liability, or personnel
✔✔Operational Risk (Pure) - ✔✔Arises from people, processes, systems, or control
✔✔Financial Risk (Speculative) - ✔✔Arises from effect of market forces on financial
assets or liabilities
✔✔Strategic Risk (Speculative) - ✔✔Arises from trends in economy and society
✔✔Risk Management Technology - ✔✔1. Artificial Intelligence (AI)
2. Sensors
3. Computer Vision
✔✔Artificial Intelligence - ✔✔Enables computers to perform tasks that require critical
thinking
✔✔Sensors - ✔✔Detect and measure objects, or conditions on a continuous basis to
warn of problems or malfunctions
✔✔Computer Vision - ✔✔Helps machine recognize an object and respond to it as a
human would
✔✔Insurance Operations Regulation Principles - ✔✔1. Protect Consumers
2. Maintain Insurer Solvency
3. Prevent Destructive Competition
✔✔Protect Customers - ✔✔-Verify policies truly benefit customers
-Requiring insurers to pay legitimate claims and honest represent benefits of a policy
-Guaranteeing insurance is a valuable and accessible to everyone who needs it
✔✔Maintain Insurer Solvency - ✔✔-To prevent an insurer from recklessly investing its
profits or engaging in fraudulent activities that could jeopardize its reserves
-Guarantee insurers have enough cash on hand to pay for future claims made on all the
policies it issues
✔✔Prevent Destructive Competition - ✔✔Maintain financial health and protect
customers
AND ANSWERS SURE A+
✔✔Commercial Umbrella Insurance - ✔✔Provides additional liability limits beyond those
provided by other commercial policies, protecting a business in the event of a large
liability loss
✔✔Private insurers classified by two basic forms of ownership - ✔✔1. Proprietary =
Earn a profit from their owners
2. Cooperative = Provide insurance at minimum cost to owners, who are policy holders
✔✔Common Private Insurers - ✔✔1. Stock
2. Mutual
3. Surplus Lines
4. Reinsurance
5. Reciprocal Insurance Exchanges
6. Lloyd's
7. Captive
✔✔Stock Private Insurer - ✔✔Earn a profit and attract stockholders by expectations of
investment returns
✔✔Mutual Private Insurer - ✔✔Pay dividends to policyholders as a return of a portion of
premiums paid
✔✔Surplus Lines Insurer - ✔✔Provide coverages unavailable in the standard market
(ex: business may need new type of coverage for new product or service)
✔✔Reinsurance - ✔✔Allows a primary insurer to transfer some loss exposures to
another insurer, the reinsurer
-Can help small insurer provide insurance for large accounts-
✔✔Lloyd's - ✔✔The insurance and reinsurance marketplace
-"stock exchange"
✔✔Captive Private Insurer - ✔✔Formed to cover loss exposures of specific
organizations
✔✔Government Programs - ✔✔When private insurers are unable/unwilling to satisfied
legitimate needs:
1. Fill unmet insurance needs
2. Facilitate required insurance purchases
3. Promote efficiency and convivence
4. Achieve social goals
-can act as an insurer or partner with private insurers-
, ✔✔Pure Risk - ✔✔Beyond human control and can ONLY result in a loss
✔✔Speculative Risk - ✔✔Taken on voluntarily and can result EITHER profit or loss
✔✔Hazard Risk (Pure) - ✔✔Arises from property, liability, or personnel
✔✔Operational Risk (Pure) - ✔✔Arises from people, processes, systems, or control
✔✔Financial Risk (Speculative) - ✔✔Arises from effect of market forces on financial
assets or liabilities
✔✔Strategic Risk (Speculative) - ✔✔Arises from trends in economy and society
✔✔Risk Management Technology - ✔✔1. Artificial Intelligence (AI)
2. Sensors
3. Computer Vision
✔✔Artificial Intelligence - ✔✔Enables computers to perform tasks that require critical
thinking
✔✔Sensors - ✔✔Detect and measure objects, or conditions on a continuous basis to
warn of problems or malfunctions
✔✔Computer Vision - ✔✔Helps machine recognize an object and respond to it as a
human would
✔✔Insurance Operations Regulation Principles - ✔✔1. Protect Consumers
2. Maintain Insurer Solvency
3. Prevent Destructive Competition
✔✔Protect Customers - ✔✔-Verify policies truly benefit customers
-Requiring insurers to pay legitimate claims and honest represent benefits of a policy
-Guaranteeing insurance is a valuable and accessible to everyone who needs it
✔✔Maintain Insurer Solvency - ✔✔-To prevent an insurer from recklessly investing its
profits or engaging in fraudulent activities that could jeopardize its reserves
-Guarantee insurers have enough cash on hand to pay for future claims made on all the
policies it issues
✔✔Prevent Destructive Competition - ✔✔Maintain financial health and protect
customers
