AINS 101 | ASSOCIATE IN INSURANCE (AINS)
EXAM | QUESTIONS AND VERIFIED ANSWERS
GRADED A+ | UPDATED 2024/2025
A homeowners policy is a type of
Select one:
A. Personal umbrella policy.
B. Personal property-casualty insurance policy.
C. Commercial insurance policy.
D. Life insurance policy. - Correct Answer - B. Personal property-
casualty insurance policy.
All of the following are types of private insurers, EXCEPT:
Select one:
A. Stock insurers
B. State workers compensation funds
C. Mutual insurers
D. Reciprocal insurance exchanges - Correct Answer - B. State workers
compensation funds
Which one of the following correctly describes a reason for government
involvement in property-casualty insurance?
Select one:
A. Selling insurance provides the government with a non-tax source of
revenues and profits.
B. Government programs can meet legitimate public demands unmet by
private insurers.
,C. Competition from government plans keeps private insurer's premiums
competitive.
D. Preventing high-risk individuals or activities from being insured is in
the public interest. - Correct Answer - B. Government programs can
meet legitimate public demands unmet by private insurers.
ABC Company experienced a dramatic ideological shift in corporate
policies after a national election. This is an example of which one of the
following quadrants of risk?
Select one:
A. Hazard risk
B. Strategic risk
C. Operational risk
D. Financial risk - Correct Answer - B. Strategic risk
In an effort to reduce expenses, increase profitability, and reduce human
errors; ABC Insurance Company decided to automate most of its
personal lines underwriting function. The company now uses
standardized application forms that are submitted electronically to one of
the company's regional offices. At each regional office, a computer with a
scanner reads the applications. The computer has been programmed
with acceptable answers to the questions. If the answers on the
application are all acceptable, the policy is automatically issued.
Rejected applications are automatically forwarded to a human
underwriter who reviews them. The use of this technology has reduced
the company's expense ratio by two and a half percent, and reduced the
time it takes to issue a policy. ABC Insurance Company's use of
computers to evaluate applications electronically is an application of
Select one:
,A. Radiant sensors.
B. Artificial intell - Correct Answer - B. Artificial intelligence.
Carlos is new to the insurance business and is learning about insurance
regulation and what he, now working with Grady Insurance, will need to
be aware of regarding the subject of compliance. Which one of the
following will Carlos find is accurate as he better understands why
insurance is regulated?
Select one:
A. Insurance regulation prevents insurers from covering catastrophic
occurrences so insurers can remain solvent.
B. The U.S. insurance industry is governed by federal laws that protect
citizens by leveling the playing field for insurers and policyholders.
C. Insurance regulation protects customers by guaranteeing insurance is
available and accessible to everyone who needs it.
D. Insurance regulation speaks to the types of risks insurers may cover,
but does not play a part in how they invest their profits. - Correct Answer
- C. Insurance regulation protects customers by guaranteeing insurance
is available and accessible to everyone who needs it.
What term refers to the ability of an insurer to meet its obligations as
they become due?
Select one:
A. Capacity
B. Capital
C. Reserves
D. Solvency - Correct Answer - D. Solvency
, Renegade Insurance prides itself on its upstanding reputation through its
commitment to small communities' homeowners coverage needs over
the past twenty years. Which one of Renegade's actions over this time
would best illustrate its continued commitment to maintaining its
solvency?
Select one:
A. Renegade keeps enough cash assets on hand to cover claims on
policies long after it collected the premiums from customers.
B. Renegade emphasizes that its insurance is readily available and
accessible to customers in its service area that need it.
C. Renegade is committed to branching out in the near future to include
more coverages for specialized small businesses.
D. Renegade's producers know policy language well so that they can
easily and understandably answer policyholders' questions. - Correct
Answer - A. Renegade keeps enough cash assets on hand to cover
claims on policies long after it collected the premiums from customers.
All of the following appear on an insurer's balance sheet, EXCEPT:
Select one:
A. Assets
B. Policyholders' surplus
C. Net income
D. Liabilities - Correct Answer - C. Net income
All of the following are categories of liabilities found on an insurer's
balance sheet, EXCEPT:
Select one:
A. Other liabilities
B. Policyholders' surplus
EXAM | QUESTIONS AND VERIFIED ANSWERS
GRADED A+ | UPDATED 2024/2025
A homeowners policy is a type of
Select one:
A. Personal umbrella policy.
B. Personal property-casualty insurance policy.
C. Commercial insurance policy.
D. Life insurance policy. - Correct Answer - B. Personal property-
casualty insurance policy.
All of the following are types of private insurers, EXCEPT:
Select one:
A. Stock insurers
B. State workers compensation funds
C. Mutual insurers
D. Reciprocal insurance exchanges - Correct Answer - B. State workers
compensation funds
Which one of the following correctly describes a reason for government
involvement in property-casualty insurance?
Select one:
A. Selling insurance provides the government with a non-tax source of
revenues and profits.
B. Government programs can meet legitimate public demands unmet by
private insurers.
,C. Competition from government plans keeps private insurer's premiums
competitive.
D. Preventing high-risk individuals or activities from being insured is in
the public interest. - Correct Answer - B. Government programs can
meet legitimate public demands unmet by private insurers.
ABC Company experienced a dramatic ideological shift in corporate
policies after a national election. This is an example of which one of the
following quadrants of risk?
Select one:
A. Hazard risk
B. Strategic risk
C. Operational risk
D. Financial risk - Correct Answer - B. Strategic risk
In an effort to reduce expenses, increase profitability, and reduce human
errors; ABC Insurance Company decided to automate most of its
personal lines underwriting function. The company now uses
standardized application forms that are submitted electronically to one of
the company's regional offices. At each regional office, a computer with a
scanner reads the applications. The computer has been programmed
with acceptable answers to the questions. If the answers on the
application are all acceptable, the policy is automatically issued.
Rejected applications are automatically forwarded to a human
underwriter who reviews them. The use of this technology has reduced
the company's expense ratio by two and a half percent, and reduced the
time it takes to issue a policy. ABC Insurance Company's use of
computers to evaluate applications electronically is an application of
Select one:
,A. Radiant sensors.
B. Artificial intell - Correct Answer - B. Artificial intelligence.
Carlos is new to the insurance business and is learning about insurance
regulation and what he, now working with Grady Insurance, will need to
be aware of regarding the subject of compliance. Which one of the
following will Carlos find is accurate as he better understands why
insurance is regulated?
Select one:
A. Insurance regulation prevents insurers from covering catastrophic
occurrences so insurers can remain solvent.
B. The U.S. insurance industry is governed by federal laws that protect
citizens by leveling the playing field for insurers and policyholders.
C. Insurance regulation protects customers by guaranteeing insurance is
available and accessible to everyone who needs it.
D. Insurance regulation speaks to the types of risks insurers may cover,
but does not play a part in how they invest their profits. - Correct Answer
- C. Insurance regulation protects customers by guaranteeing insurance
is available and accessible to everyone who needs it.
What term refers to the ability of an insurer to meet its obligations as
they become due?
Select one:
A. Capacity
B. Capital
C. Reserves
D. Solvency - Correct Answer - D. Solvency
, Renegade Insurance prides itself on its upstanding reputation through its
commitment to small communities' homeowners coverage needs over
the past twenty years. Which one of Renegade's actions over this time
would best illustrate its continued commitment to maintaining its
solvency?
Select one:
A. Renegade keeps enough cash assets on hand to cover claims on
policies long after it collected the premiums from customers.
B. Renegade emphasizes that its insurance is readily available and
accessible to customers in its service area that need it.
C. Renegade is committed to branching out in the near future to include
more coverages for specialized small businesses.
D. Renegade's producers know policy language well so that they can
easily and understandably answer policyholders' questions. - Correct
Answer - A. Renegade keeps enough cash assets on hand to cover
claims on policies long after it collected the premiums from customers.
All of the following appear on an insurer's balance sheet, EXCEPT:
Select one:
A. Assets
B. Policyholders' surplus
C. Net income
D. Liabilities - Correct Answer - C. Net income
All of the following are categories of liabilities found on an insurer's
balance sheet, EXCEPT:
Select one:
A. Other liabilities
B. Policyholders' surplus
