AINS 21 Chapter 5 Terms Exam Questions
with correct Answers 2025/2026 A+
Graded
Book of Business - ANS- A group of policies with a common characteristic, such as
territory or type of coverage, or all policies written by a particular insurer or agency.
Adverse Selection - ANS- In general, the tendency for people with the greatest
probability of loss to be the ones most likely to purchase insurance.
Capacity - ANS- The amount of business an insurer is able to write, usually based on a
comparison of the insurer's written premiums to its policyholders' surplus.
Underwriting Authority - ANS- The scope of decisions that an underwriter can make
without receiving approval from someone at a higher level.
Underwriting Guidelines (underwriting guide) - ANS- A written manual that
communicates an insurer's underwriting policy and that specifies the attributes of an
account that an insurer is willing to insure.
Line Underwriter - ANS- Underwriter who is primarily responsible for implementing the
steps in the underwriting process
Staff Underwriter - ANS- Underwriter who is usually located in the home office and who
assists underwriting management with making and implementing underwriting policy.
Underwriting Policy (underwriting philosophy) - ANS- A guide to individual and
aggregate policy selection that supports an insurer's mission statement.
Advisory Organization - ANS- An independent organization that works with and on
behalf of insurers that purchase or subscribe to its services.
Prospective Loss Costs - ANS- Loss data that are modified by loss development,
trending, and credibility processes, but without considerations for profit and expenses.
Trending - ANS- A statistical technique for analyzing environmental changes and
projecting such changes into the future.
with correct Answers 2025/2026 A+
Graded
Book of Business - ANS- A group of policies with a common characteristic, such as
territory or type of coverage, or all policies written by a particular insurer or agency.
Adverse Selection - ANS- In general, the tendency for people with the greatest
probability of loss to be the ones most likely to purchase insurance.
Capacity - ANS- The amount of business an insurer is able to write, usually based on a
comparison of the insurer's written premiums to its policyholders' surplus.
Underwriting Authority - ANS- The scope of decisions that an underwriter can make
without receiving approval from someone at a higher level.
Underwriting Guidelines (underwriting guide) - ANS- A written manual that
communicates an insurer's underwriting policy and that specifies the attributes of an
account that an insurer is willing to insure.
Line Underwriter - ANS- Underwriter who is primarily responsible for implementing the
steps in the underwriting process
Staff Underwriter - ANS- Underwriter who is usually located in the home office and who
assists underwriting management with making and implementing underwriting policy.
Underwriting Policy (underwriting philosophy) - ANS- A guide to individual and
aggregate policy selection that supports an insurer's mission statement.
Advisory Organization - ANS- An independent organization that works with and on
behalf of insurers that purchase or subscribe to its services.
Prospective Loss Costs - ANS- Loss data that are modified by loss development,
trending, and credibility processes, but without considerations for profit and expenses.
Trending - ANS- A statistical technique for analyzing environmental changes and
projecting such changes into the future.
