AINS 101 - Course Practice Quiz Questions
Insurance Company wrote a commercial liability policy for a manufacturer of off-road
motorcycles. The potential costs of the insured's loss exposure exceed Insurance Company's
capacity. Insurance Company could consider which one of the following types of contractual
transferring agreement to meet its needs? - correct answer Reinsurance
Mutual Fund Company (MFC) offers a wide array of mutual fund options to investors. Each
mutual fund has a different fund objective and set of investment guidelines that apply to the
fund. While MFC gives considerable freedom to its fund portfolio managers, they are required
to abide by the fund's investment guidelines. To monitor compliance, MFC developed a
computer algorithm. The computer algorithm continuously monitors each fund's compliance
with investment guidelines. 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 - correct answer Artificial intelligence.
An insurer's financial statement shows a loss reserve and an unearned premium reserve. These
reserves are part of the insurer's - correct answer Total liabilities.
Which one of the following is the fundamental measure of loss exposure used in insurance
rating? - correct answer Exposure unit
The size of an employer's loss exposure for workers compensation insurance is based on -
correct answer The amount of its payroll.
Henry is a new claims representative with Able Insurers. Which one of the following will Henry
find is true as he gains more experience with his company's claims handling process? - correct
answer Henry will determine the type of loss - such as property damage or liability - for each
claim he handles.
Leadon Transportation is using the expertise of its producer Carmen to help the organization
understand how to correct substandard performance as well as evaluate exceeded standards.
Insurance Company wrote a commercial liability policy for a manufacturer of off-road
motorcycles. The potential costs of the insured's loss exposure exceed Insurance Company's
capacity. Insurance Company could consider which one of the following types of contractual
transferring agreement to meet its needs? - correct answer Reinsurance
Mutual Fund Company (MFC) offers a wide array of mutual fund options to investors. Each
mutual fund has a different fund objective and set of investment guidelines that apply to the
fund. While MFC gives considerable freedom to its fund portfolio managers, they are required
to abide by the fund's investment guidelines. To monitor compliance, MFC developed a
computer algorithm. The computer algorithm continuously monitors each fund's compliance
with investment guidelines. 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 - correct answer Artificial intelligence.
An insurer's financial statement shows a loss reserve and an unearned premium reserve. These
reserves are part of the insurer's - correct answer Total liabilities.
Which one of the following is the fundamental measure of loss exposure used in insurance
rating? - correct answer Exposure unit
The size of an employer's loss exposure for workers compensation insurance is based on -
correct answer The amount of its payroll.
Henry is a new claims representative with Able Insurers. Which one of the following will Henry
find is true as he gains more experience with his company's claims handling process? - correct
answer Henry will determine the type of loss - such as property damage or liability - for each
claim he handles.
Leadon Transportation is using the expertise of its producer Carmen to help the organization
understand how to correct substandard performance as well as evaluate exceeded standards.
