AINS 101 EXAM WITH CORRECT
ANSWERS 2025
Bill is an insurance producer for and employed by ABC Insurance Company
(ABC). He represents only ABC when marketing insurance products, and
uses an administrative staff also employed by ABC. Bill is a producer in the
( correct answers ) Direct
writer marketing system
Because the insurance company usually determines policy wording and the
insured has little choice but to "take it or leave it," an insurance contract is a
( correct answers )
Contract of adhesion
Which one of the following best explains why producers should be alert to
changes in clients' loss exposures? ( correct answers ) Implemented risk
management techniques may prove to be ineffective or become obsolete
At Greenfield Insurance Company, Bernadette and Rachel are corporate
underwriters, and Tomas and Jose are field underwriters. All of the following
are underwriting activities typically performed by corporate (or staff)
underwriters like Bernadette and Rachel, EXCEPT: ( correct answers )
Support producers and insureds
Joel is the underwriter for Stanton Industries. He received a notice from the
premium auditor on the account. After a recent visit to the insured's
location, the auditor wanted to make Joel aware of a decline in the business
and some questionable business practices. Which one of the following
types of hazards is the auditor identifying?
( correct answers )
Moral hazards
Moral hazards ( correct answers ) include questionable business
practices or a failing business.
James West is a claims rep with Hatters Insurance. As he learns how to
handle a claim from start to finish, which one of the following best describes
the correct order for him to follow during this process? ( correct answers
) Identifying the policy, calculating a loss reserve,
determining the cause of loss, preparing a loss statement
Margaret was severely injured and scarred due to a recent accident. Which
one of the following is an example of general damages Margaret received?
( correct answers ) Compensation for disfigurement
Donna is an insurance producer. She makes an appointment with potential
policyholder Sandie to review her loss exposures. She asks Sandie to
complete a questionnaire to
, assist her in this effort. Donna is ( correct answers ) Risk
conducting a review management
Rachel is a new employee of Westley Insurance, and has been asked to
review some existing policies to become familiar with the types of policies
she will be working with. Which one of the following will Rachel find is true
as she conducts her review?
( correct answers )
Rachel finds the policy begins with a coverage overview and then goes into
more coverage details.
Sports, Inc. is looking to obtain a commercial property policy on its building
for
$400,000. If their insurer decides to charge them a rate of $0.50 per $100
of building insurance, what premium must Sports, Inc. pay? ( correct
answers ) $2,000
Destructive competition in the insurance industry could result in ( correct
answers ) Insurance shortages
The financial report for Hometown Insurer contains the following
information:
Earned premiums$4,000,000Written premiums$5,000,000Net investment
income$1,000,000Incurred losses$3,000,000Incurred underwriting
expenses$2,000,000 What is Hometown Insurer's loss ratio? ( correct
answers ) 75%
Loss Ratio ( correct answers ) incurred losses divided by its earned
premiums
Jessie is a new customer service representative (CSR) at the Winfield
Agency. Jessie usually engages in all the following activities, EXCEPT:
( correct answers ) Determining coverage quotes
Riley Turner is performing a comprehensive evaluation of Hardwick
Enterprises to make sure its insurance and risk management efforts are
serving the organization appropriately. Which one of the following will be true
in regard to this effort? ( correct
answers ) Besides risk management goals being attainable, they should
also pose a challenge.
Rachel is considering investing in the stock of an insurance company. Which
one of the following is likely to provide the best indication of the insurer's
financial position at this point in time? ( correct answers ) Balance sheet
Balance Sheet ( correct answers ) provides the best indication of its
financial position because it shows admitted assets, liabilities, and
policyholders' surplus at a particular point in time.
Which one of the following is the amount of business an insurer can
write based on regulatory guidelines, usually a comparsion of the
insurer's written premiums to the policyholders' surplus? ( correct
answers ) Capacity
ANSWERS 2025
Bill is an insurance producer for and employed by ABC Insurance Company
(ABC). He represents only ABC when marketing insurance products, and
uses an administrative staff also employed by ABC. Bill is a producer in the
( correct answers ) Direct
writer marketing system
Because the insurance company usually determines policy wording and the
insured has little choice but to "take it or leave it," an insurance contract is a
( correct answers )
Contract of adhesion
Which one of the following best explains why producers should be alert to
changes in clients' loss exposures? ( correct answers ) Implemented risk
management techniques may prove to be ineffective or become obsolete
At Greenfield Insurance Company, Bernadette and Rachel are corporate
underwriters, and Tomas and Jose are field underwriters. All of the following
are underwriting activities typically performed by corporate (or staff)
underwriters like Bernadette and Rachel, EXCEPT: ( correct answers )
Support producers and insureds
Joel is the underwriter for Stanton Industries. He received a notice from the
premium auditor on the account. After a recent visit to the insured's
location, the auditor wanted to make Joel aware of a decline in the business
and some questionable business practices. Which one of the following
types of hazards is the auditor identifying?
( correct answers )
Moral hazards
Moral hazards ( correct answers ) include questionable business
practices or a failing business.
James West is a claims rep with Hatters Insurance. As he learns how to
handle a claim from start to finish, which one of the following best describes
the correct order for him to follow during this process? ( correct answers
) Identifying the policy, calculating a loss reserve,
determining the cause of loss, preparing a loss statement
Margaret was severely injured and scarred due to a recent accident. Which
one of the following is an example of general damages Margaret received?
( correct answers ) Compensation for disfigurement
Donna is an insurance producer. She makes an appointment with potential
policyholder Sandie to review her loss exposures. She asks Sandie to
complete a questionnaire to
, assist her in this effort. Donna is ( correct answers ) Risk
conducting a review management
Rachel is a new employee of Westley Insurance, and has been asked to
review some existing policies to become familiar with the types of policies
she will be working with. Which one of the following will Rachel find is true
as she conducts her review?
( correct answers )
Rachel finds the policy begins with a coverage overview and then goes into
more coverage details.
Sports, Inc. is looking to obtain a commercial property policy on its building
for
$400,000. If their insurer decides to charge them a rate of $0.50 per $100
of building insurance, what premium must Sports, Inc. pay? ( correct
answers ) $2,000
Destructive competition in the insurance industry could result in ( correct
answers ) Insurance shortages
The financial report for Hometown Insurer contains the following
information:
Earned premiums$4,000,000Written premiums$5,000,000Net investment
income$1,000,000Incurred losses$3,000,000Incurred underwriting
expenses$2,000,000 What is Hometown Insurer's loss ratio? ( correct
answers ) 75%
Loss Ratio ( correct answers ) incurred losses divided by its earned
premiums
Jessie is a new customer service representative (CSR) at the Winfield
Agency. Jessie usually engages in all the following activities, EXCEPT:
( correct answers ) Determining coverage quotes
Riley Turner is performing a comprehensive evaluation of Hardwick
Enterprises to make sure its insurance and risk management efforts are
serving the organization appropriately. Which one of the following will be true
in regard to this effort? ( correct
answers ) Besides risk management goals being attainable, they should
also pose a challenge.
Rachel is considering investing in the stock of an insurance company. Which
one of the following is likely to provide the best indication of the insurer's
financial position at this point in time? ( correct answers ) Balance sheet
Balance Sheet ( correct answers ) provides the best indication of its
financial position because it shows admitted assets, liabilities, and
policyholders' surplus at a particular point in time.
Which one of the following is the amount of business an insurer can
write based on regulatory guidelines, usually a comparsion of the
insurer's written premiums to the policyholders' surplus? ( correct
answers ) Capacity
