AINS 103 EXAMPREP MATERIAL SOLVED
QUESTIONS AND VERIFIED SOLUTIONS
PREMIUM COLLECTION
◉ Loss exposure. Answer: any condition or situation that presents a
possibility of loss, whether or not an actual loss occurs
◉ Premium. Answer: the price of the insurance coverage provided for
a specified period
◉ Indemnify. Answer: to restore a party who has sustained a loss to
the same financial position that party held before the loss occurred
◉ Insured. Answer: any person or organization who is insured under
an insurance policy
◉ Property-casualty insurance. Answer: one of the two main sectors
of the insurance industry encompassing numerous types of insurance,
most of which cover the financial consequences of damage to one's
own property or legal liability to others
◉ Life-health insurance. Answer: one of the two main sectors of the
insurance industry encompassing numerous types of insurance that
cover the financial
,◉ Stock insurer. Answer: an insurer that is owned by its stockholders
and formed as a corporation for the purpose of earning a profit for the
stockholders
◉ Mutual insurer. Answer: an insurer that is owned by its
policyholders and formed as a corporation for the purpose of
providing insurance to them
◉ Surplus-lines insurer. Answer: a non-admitted insurer that is
eligible to insure risks that have been exported by a surplus lines
licensee in accordance with a surplus lines law
◉ Reinsurance. Answer: the transfer of insurance risk from one
insurer to another through a contractual agreement under which one
insurer (the reinsurer) agrees, in return for a reinsurance premium, to
indemnify another insurer (the primary insurer) for some or all of the
financial consequences of certain loss exposures covered by the
primary's insurance policies
◉ Pure risk. Answer: a chance of loss or no loss, but no chance of
gain
◉ Speculative risk. Answer: a chance of loss, no loss, or gain
, ◉ Solvency. Answer: the ability of an insurer to meet its financial
obligations as they become due, even those resulting from insured
losses that may be claimed several years in the future
◉ Income statement. Answer: the financial statement that reports an
organization's profit or loss for a specific period by comparing the
revenues generated with the expenses incurred to produce those
revenues
◉ Earned premiums. Answer: the portion of the written premiums
that apply to the part of the policy period that has already occurred
◉ Underwriting income. Answer: income an insurer earns from
premiums paid by policyholders minus incurred losses and
underwriting expenses
◉ Balance sheet. Answer: the financial statement that reports the
assets, liabilities, and owner's equity of an organization as of a
specific date
◉ Policyholder's surplus. Answer: an insurer's assets minus its
liabilities, which represents its net worth
◉ Loss adjustment expenses. Answer: the expense that an insurer
incurs to investigate, defend, and settle claims according to the terms
specified in the insurance policy
QUESTIONS AND VERIFIED SOLUTIONS
PREMIUM COLLECTION
◉ Loss exposure. Answer: any condition or situation that presents a
possibility of loss, whether or not an actual loss occurs
◉ Premium. Answer: the price of the insurance coverage provided for
a specified period
◉ Indemnify. Answer: to restore a party who has sustained a loss to
the same financial position that party held before the loss occurred
◉ Insured. Answer: any person or organization who is insured under
an insurance policy
◉ Property-casualty insurance. Answer: one of the two main sectors
of the insurance industry encompassing numerous types of insurance,
most of which cover the financial consequences of damage to one's
own property or legal liability to others
◉ Life-health insurance. Answer: one of the two main sectors of the
insurance industry encompassing numerous types of insurance that
cover the financial
,◉ Stock insurer. Answer: an insurer that is owned by its stockholders
and formed as a corporation for the purpose of earning a profit for the
stockholders
◉ Mutual insurer. Answer: an insurer that is owned by its
policyholders and formed as a corporation for the purpose of
providing insurance to them
◉ Surplus-lines insurer. Answer: a non-admitted insurer that is
eligible to insure risks that have been exported by a surplus lines
licensee in accordance with a surplus lines law
◉ Reinsurance. Answer: the transfer of insurance risk from one
insurer to another through a contractual agreement under which one
insurer (the reinsurer) agrees, in return for a reinsurance premium, to
indemnify another insurer (the primary insurer) for some or all of the
financial consequences of certain loss exposures covered by the
primary's insurance policies
◉ Pure risk. Answer: a chance of loss or no loss, but no chance of
gain
◉ Speculative risk. Answer: a chance of loss, no loss, or gain
, ◉ Solvency. Answer: the ability of an insurer to meet its financial
obligations as they become due, even those resulting from insured
losses that may be claimed several years in the future
◉ Income statement. Answer: the financial statement that reports an
organization's profit or loss for a specific period by comparing the
revenues generated with the expenses incurred to produce those
revenues
◉ Earned premiums. Answer: the portion of the written premiums
that apply to the part of the policy period that has already occurred
◉ Underwriting income. Answer: income an insurer earns from
premiums paid by policyholders minus incurred losses and
underwriting expenses
◉ Balance sheet. Answer: the financial statement that reports the
assets, liabilities, and owner's equity of an organization as of a
specific date
◉ Policyholder's surplus. Answer: an insurer's assets minus its
liabilities, which represents its net worth
◉ Loss adjustment expenses. Answer: the expense that an insurer
incurs to investigate, defend, and settle claims according to the terms
specified in the insurance policy
