AINS 101 | 112 Question with correct answers |
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/. Risk - Answer-✅Which one of the following represents uncertainty about outcomes
that can be negative or positive?
/.Insureds share the cost of each other's losses. - Answer-✅Which one of the following
best describes the concept of pooling?
/.Personal property-casualty insurance policy. - Answer-✅A homeowners policy is a
type of
Select one:
/.Commercial crime insurance. - Answer-✅Coverage for money and other business
property from various causes of loss such as burglary, robbery, theft, and employee
dishonesty typically is provided by
/.Mutual Insurer - Answer-✅A type of insurer that is owned by policyholders and may
pay dividends to policyholders as a return of a portion of premiums paid is a
/.Government programs can meet legitimate public demands unmet by private insurers.
- Answer-✅Which one of the following correctly describes a reason for government
involvement in property-casualty insurance?
/.Artificial Intel - Answer-✅If a fund manager violates the investment guidelines, the
computer immediately notifies MFC's internal control director, and corrective action is
taken. MFC's use of the computer algorithm to monitor investment compliance and to
provide notification when corrective action is necessary illustrates use of
/.Speculative risk - Answer-✅Jimmy decided to buy a house in his neighborhood that
had been foreclosed on by the bank that held the mortgage. He is hoping to do some
renovation and repair work on the house, and then sell it for a quick profit. Which one of
the following types of risk is this for Jimmy?
/.East Insurance comes up with a new rate structure allowing "preferred customers"
discounted policies when they continually renew year after year; East eventually loses
needed revenue but is rewarded by its competitors leaving the market. - Answer-✅One
of the reasons for insurance regulation is to prevent destructive competition. In which
one of the following scenarios would destructive competition be exhibited?
,/.Insurance regulation protects customers by guaranteeing insurance is available and
accessible to everyone who needs it. - Answer-✅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?
/.Solvency - Answer-✅What term refers to the ability of an insurer to meet its
obligations as they become due?
/.Total Liabilities - Answer-✅An insurer's financial statement shows a loss reserve and
an unearned premium reserve. These reserves are part of the insurer's
/.Unearned Premiums - Answer-✅Which one of the following is part of written
premiums?
/.Balance Sheet - Answer-✅Which one of the following types of financial statements
shows the financial position of an insurance company at any particular point in time?
/.ometown Insurer's expense ratio is its incurred underwriting expenses ($2,000,000)
divided by its written premiums ($5,000,000), or 40 percent. - Answer-✅The financial
report for Hometown Insurer contains the following information:
Earned premiums $4,000,000
Written premiums $5,000,000
Net investment income $1,000,000
Incurred Losses $3,000,000
Incurred underwriting expense $2,000,000
/.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 was the Hometown Insurer's combined ratio? - Answer-✅Hometown's combined
ratio equals its loss ratio ($3,000,000/$4,000,000) or 75 percent, plus its expense ratio
($2,000,000/$5,000,000) or 40 percent, for a total of 115 percent.
/.The insurer is using its own employees as producers. - Answer-✅The key to the direct
writer marketing system is that
/.Is free to work with as many different insurers as it wants. - Answer-✅Spencer
Insurance Associates is an independent agency selling primarily homeowners policies.
This agency
/.Anchoy can use group marketing to target large numbers of recent local college
graduates. - Answer-✅As it continues to grow, Anchoy Insurance is examining other
, distribution channels to more effectively market its products. Through this experience,
which of one the following will Anchoy most likely learn?
/.A risk control evaluation can make the difference between the applicant's being
rejected or accepted by the underwriter. - Answer-✅Which one of the following
statements is correct regarding the interaction between risk control and other insurer
functions?
/.Risk control personnel can assist underwriters in modifying a new applicant's loss
exposures to meet eligibility requirements. - Answer-✅Which one of the following
statements is correct regarding the interaction between risk control and other insurer
functions?
/.Adequate policyholders' surplus. - Answer-✅Clare is a commercial lines underwriter.
She always tries to follow underwriting guidelines, effectively evaluate loss exposures,
and charge adequate premiums. By doing these things, Clare's goal is to ensure
/.Corporate Underwriter - Answer-✅Aimee recently accepted a job in the Underwriting
department at Noble Insurance Company. Her responsibilities will include developing
coverage forms, arranging reinsurance agreements, and conducting underwriting
audits. Which one of the following is the title of Aimee's new job?
/.Revise underwriting guidelines - Answer-✅Tony now works at the corporate level for
Newtown Insurance. He is considered a staff underwriter. Which one of the following is
primarily a responsibility of staff underwriters?
/.Evaluate the submission - Answer-✅Which one of the following is the first step in the
underwriting process?
/.Binder - Answer-✅Which one of the following is a temporary agreement providing
insurance coverage until the formal policy is issued?
/.Exposure units. - Answer-✅Produce, such as apples or grapes, may be priced by the
unit or by the pound. In insurance, these measures are similar to
/.$3,200 - Answer-✅Bob is shopping for auto insurance. Insurance Company A's rating
system determines that Bob should be charged $800 per auto. If Bob is looking to
insure four autos, what premium will he be charged by Insurance Company A?
/.Provide laboratory analysis when Willis is investigating a claim. - Answer-✅Willis, a
claims representative, is collaborating with his colleague Suzanna from his insurance
company's risk control department. How will Suzanna help Willis?
/.mARKETING - Answer-✅Stephanie works for Waynesgood Insurance. She
appreciates the help she receives from Clem in the company's claims department who
Verified
/. Risk - Answer-✅Which one of the following represents uncertainty about outcomes
that can be negative or positive?
/.Insureds share the cost of each other's losses. - Answer-✅Which one of the following
best describes the concept of pooling?
/.Personal property-casualty insurance policy. - Answer-✅A homeowners policy is a
type of
Select one:
/.Commercial crime insurance. - Answer-✅Coverage for money and other business
property from various causes of loss such as burglary, robbery, theft, and employee
dishonesty typically is provided by
/.Mutual Insurer - Answer-✅A type of insurer that is owned by policyholders and may
pay dividends to policyholders as a return of a portion of premiums paid is a
/.Government programs can meet legitimate public demands unmet by private insurers.
- Answer-✅Which one of the following correctly describes a reason for government
involvement in property-casualty insurance?
/.Artificial Intel - Answer-✅If a fund manager violates the investment guidelines, the
computer immediately notifies MFC's internal control director, and corrective action is
taken. MFC's use of the computer algorithm to monitor investment compliance and to
provide notification when corrective action is necessary illustrates use of
/.Speculative risk - Answer-✅Jimmy decided to buy a house in his neighborhood that
had been foreclosed on by the bank that held the mortgage. He is hoping to do some
renovation and repair work on the house, and then sell it for a quick profit. Which one of
the following types of risk is this for Jimmy?
/.East Insurance comes up with a new rate structure allowing "preferred customers"
discounted policies when they continually renew year after year; East eventually loses
needed revenue but is rewarded by its competitors leaving the market. - Answer-✅One
of the reasons for insurance regulation is to prevent destructive competition. In which
one of the following scenarios would destructive competition be exhibited?
,/.Insurance regulation protects customers by guaranteeing insurance is available and
accessible to everyone who needs it. - Answer-✅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?
/.Solvency - Answer-✅What term refers to the ability of an insurer to meet its
obligations as they become due?
/.Total Liabilities - Answer-✅An insurer's financial statement shows a loss reserve and
an unearned premium reserve. These reserves are part of the insurer's
/.Unearned Premiums - Answer-✅Which one of the following is part of written
premiums?
/.Balance Sheet - Answer-✅Which one of the following types of financial statements
shows the financial position of an insurance company at any particular point in time?
/.ometown Insurer's expense ratio is its incurred underwriting expenses ($2,000,000)
divided by its written premiums ($5,000,000), or 40 percent. - Answer-✅The financial
report for Hometown Insurer contains the following information:
Earned premiums $4,000,000
Written premiums $5,000,000
Net investment income $1,000,000
Incurred Losses $3,000,000
Incurred underwriting expense $2,000,000
/.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 was the Hometown Insurer's combined ratio? - Answer-✅Hometown's combined
ratio equals its loss ratio ($3,000,000/$4,000,000) or 75 percent, plus its expense ratio
($2,000,000/$5,000,000) or 40 percent, for a total of 115 percent.
/.The insurer is using its own employees as producers. - Answer-✅The key to the direct
writer marketing system is that
/.Is free to work with as many different insurers as it wants. - Answer-✅Spencer
Insurance Associates is an independent agency selling primarily homeowners policies.
This agency
/.Anchoy can use group marketing to target large numbers of recent local college
graduates. - Answer-✅As it continues to grow, Anchoy Insurance is examining other
, distribution channels to more effectively market its products. Through this experience,
which of one the following will Anchoy most likely learn?
/.A risk control evaluation can make the difference between the applicant's being
rejected or accepted by the underwriter. - Answer-✅Which one of the following
statements is correct regarding the interaction between risk control and other insurer
functions?
/.Risk control personnel can assist underwriters in modifying a new applicant's loss
exposures to meet eligibility requirements. - Answer-✅Which one of the following
statements is correct regarding the interaction between risk control and other insurer
functions?
/.Adequate policyholders' surplus. - Answer-✅Clare is a commercial lines underwriter.
She always tries to follow underwriting guidelines, effectively evaluate loss exposures,
and charge adequate premiums. By doing these things, Clare's goal is to ensure
/.Corporate Underwriter - Answer-✅Aimee recently accepted a job in the Underwriting
department at Noble Insurance Company. Her responsibilities will include developing
coverage forms, arranging reinsurance agreements, and conducting underwriting
audits. Which one of the following is the title of Aimee's new job?
/.Revise underwriting guidelines - Answer-✅Tony now works at the corporate level for
Newtown Insurance. He is considered a staff underwriter. Which one of the following is
primarily a responsibility of staff underwriters?
/.Evaluate the submission - Answer-✅Which one of the following is the first step in the
underwriting process?
/.Binder - Answer-✅Which one of the following is a temporary agreement providing
insurance coverage until the formal policy is issued?
/.Exposure units. - Answer-✅Produce, such as apples or grapes, may be priced by the
unit or by the pound. In insurance, these measures are similar to
/.$3,200 - Answer-✅Bob is shopping for auto insurance. Insurance Company A's rating
system determines that Bob should be charged $800 per auto. If Bob is looking to
insure four autos, what premium will he be charged by Insurance Company A?
/.Provide laboratory analysis when Willis is investigating a claim. - Answer-✅Willis, a
claims representative, is collaborating with his colleague Suzanna from his insurance
company's risk control department. How will Suzanna help Willis?
/.mARKETING - Answer-✅Stephanie works for Waynesgood Insurance. She
appreciates the help she receives from Clem in the company's claims department who
