AINS 21 EXAM 2026 Questions and
Answers
Rating agencies such as Dun & Bradstreet (D&B) provide
Select one:
A. Data on credit ratings of businesses.Correct. Rating agencies provide data on
credit ratings of businesses.
B. Data on motor vehicle reports.
C. Information about business operations' safety records.
D. Aggregate loss experience data. - Correct answer-A. Data on credit ratings of
businesses.
Which one of the following statements is correct regarding the benefits of
insurance?
Select one:
A. One disadvantage of insurance is that it promotes inefficient use of
policyholders' funds.
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,B. Insurers generally do not provide incentives to organizations to implement risk
control measures.
C. Insurance policies typically cannot be used to provide evidence of financial
resources.
D. Contractors must usually provide evidence of liability insurance before a
construction contract is granted - Correct answer-D. Contractors must usually
provide evidence of liability insurance before a construction contract is granted
Which one of the following statements is correct regarding the benefits that
insurance provides?
Select one:
A. Insurance provides a source of investment funds for insurers but not for
insureds.
B. Investment income helps keep insurance premiums at a reasonable level.
Correct. Investment income helps keep insurance premiums at a reasonable level.
C. Insurers are prohibited from investing in such things as research or
technological advancements.
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,D. The premiums collected by insurers must be held in cash to be available to pay
claims. - Correct answer-B. Investment income helps keep insurance premiums at a
reasonable level.
Which one of the following is an opportunity cost of insurance?
Select one:
A. An insurer's loss on invested premiums
B. The cost of claims payments that would not have been necessary if insureds'
carelessness had not caused losses
C. The payment of commissions to agents
D. An insured's funds that could be invested elsewhere if purchasing insurance
were not necessary - Correct answer-D. An insured's funds that could be invested
elsewhere if purchasing insurance were not necessary
Which one of the following describes the characteristics of a mutual insurance
company?
Select one:
A. A corporation owned by policyholders that provides insurance to its
policyholders.
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, Correct. A mutual insurer is owned by its policyholders and formed as a
corporation for the purpose of providing insurance to them.
B. A corporation owned by stockholders that earns profits for the stockholders.
C. An unincorporated association that earns profits for its individual investors.
D. An unincorporated association that provides reciprocal coverage to subscribers.
- Correct answer-A. A corporation owned by policyholders that provides insurance
to its policyholders.
As a single mother on a very tight budget, Ciara is tempted to skimp on her
insurance. However, her friend Mehmet tells her not to skimp on insurance,
because it will help manage her cash flows. Which one of the following examples
best illustrates Mehmet's point?
Select one:
A. When her car's transmission goes out a month after the warranty expires, Ciara
is faced with a $1,100 repair bill.
B. Ciara needs her car to get to her job, and she needs her job to make car
payments and pay for her car insurance.
C. Ciara finds it difficult to come up with a $787 auto insurance premium every six
months.
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Answers
Rating agencies such as Dun & Bradstreet (D&B) provide
Select one:
A. Data on credit ratings of businesses.Correct. Rating agencies provide data on
credit ratings of businesses.
B. Data on motor vehicle reports.
C. Information about business operations' safety records.
D. Aggregate loss experience data. - Correct answer-A. Data on credit ratings of
businesses.
Which one of the following statements is correct regarding the benefits of
insurance?
Select one:
A. One disadvantage of insurance is that it promotes inefficient use of
policyholders' funds.
©COPYRIGHT 2025, ALL RIGHTS RESERVE 1
,B. Insurers generally do not provide incentives to organizations to implement risk
control measures.
C. Insurance policies typically cannot be used to provide evidence of financial
resources.
D. Contractors must usually provide evidence of liability insurance before a
construction contract is granted - Correct answer-D. Contractors must usually
provide evidence of liability insurance before a construction contract is granted
Which one of the following statements is correct regarding the benefits that
insurance provides?
Select one:
A. Insurance provides a source of investment funds for insurers but not for
insureds.
B. Investment income helps keep insurance premiums at a reasonable level.
Correct. Investment income helps keep insurance premiums at a reasonable level.
C. Insurers are prohibited from investing in such things as research or
technological advancements.
©COPYRIGHT 2025, ALL RIGHTS RESERVE 2
,D. The premiums collected by insurers must be held in cash to be available to pay
claims. - Correct answer-B. Investment income helps keep insurance premiums at a
reasonable level.
Which one of the following is an opportunity cost of insurance?
Select one:
A. An insurer's loss on invested premiums
B. The cost of claims payments that would not have been necessary if insureds'
carelessness had not caused losses
C. The payment of commissions to agents
D. An insured's funds that could be invested elsewhere if purchasing insurance
were not necessary - Correct answer-D. An insured's funds that could be invested
elsewhere if purchasing insurance were not necessary
Which one of the following describes the characteristics of a mutual insurance
company?
Select one:
A. A corporation owned by policyholders that provides insurance to its
policyholders.
©COPYRIGHT 2025, ALL RIGHTS RESERVE 3
, Correct. A mutual insurer is owned by its policyholders and formed as a
corporation for the purpose of providing insurance to them.
B. A corporation owned by stockholders that earns profits for the stockholders.
C. An unincorporated association that earns profits for its individual investors.
D. An unincorporated association that provides reciprocal coverage to subscribers.
- Correct answer-A. A corporation owned by policyholders that provides insurance
to its policyholders.
As a single mother on a very tight budget, Ciara is tempted to skimp on her
insurance. However, her friend Mehmet tells her not to skimp on insurance,
because it will help manage her cash flows. Which one of the following examples
best illustrates Mehmet's point?
Select one:
A. When her car's transmission goes out a month after the warranty expires, Ciara
is faced with a $1,100 repair bill.
B. Ciara needs her car to get to her job, and she needs her job to make car
payments and pay for her car insurance.
C. Ciara finds it difficult to come up with a $787 auto insurance premium every six
months.
©COPYRIGHT 2025, ALL RIGHTS RESERVE 4
