AFSB 151 ALL 2026 CORE EXAM QUESTIONS
AND ANSWERS SURE A+
✔✔reinsurance - ✔✔the transfer of insurance risk from one insurer to another through a
contractual agreement under which one insurer agrees, in return for a reinsurance
premium to indemnify another insurer for some or all of the financial consequences of
certain loss exposures covered by the primary insurance policies
✔✔primary insurer - ✔✔in reinsurance, the insurer that transfers or cedes all or part of
the insurance risk it has assumed to another insurer in a contractual agreement
✔✔reinsurer - ✔✔the insurer that assumes some or all of the potential costs of insured
loss exposures of the primary insurer in a reinsurance contractual agreement
✔✔facultative reinsurance - ✔✔reinsurance of individual loss exposures in which the
primary insurer chooses which loss exposures to submit to the reinsurer, and the
reinsurer can accept or reject any loss exposures submitted
✔✔treaty reinsurance - ✔✔a reinsurance agreement that covers an entire class or
portfolio of loss exposures and proves that the primary insurer's individual loss
exposures that fall within the treaty are automatically reinsured
, ✔✔cosureties - ✔✔two or more sureties that execute the same bond obligations with
principal
✔✔bid bond - ✔✔contract bond guaranteeing that a contractor bidding on a
construction or supply contract will enter into the contract and will provide a
performance bond
✔✔miller act - ✔✔federal law that requires a contractors to post separate performance
and payment bonds guaranteeing payment for material and labor provided on federal
construction projects valued over a statutory amount
✔✔mechanic's lien - ✔✔a lien, granted by law to anyone who repairs a specific piece of
property, that secures payment for the repairs
✔✔maintenance bond - ✔✔a contract bond guaranteeing that the work will be from
defects in materials and workmanship for a specified period after the project is
completed
✔✔subdivision bond - ✔✔a contract bond guaranteeing a local governmental authority
that a subdivision developer will complete the subdivision in accordance with approved
proposals and at the developer's expense
✔✔supply contract bond - ✔✔a contract bond guaranteeing that a supplier will perform
the designated supply contract according to specifications
✔✔compliance only bonds - ✔✔a classifications of bonds that guarantee that the
principal will comply with the applicable laws for the business or activity
✔✔compliance with third party - ✔✔principal will obey laws according to the activity for
which the principal is licensed and pay damages to any third party suffering a loss
because of the principals failure to comply
✔✔tax or fee bonds - ✔✔a classifications of bonds that guarantee that merchandising
activities will be conducted according to law
✔✔merchandising and dealer bonds - ✔✔a classification of bonds that guarantee that
merchandising activities will be conducted according to law
✔✔reclamation and environmental bonds - ✔✔restoration of land to its original state
after completion of the principal's operation
✔✔act of god - ✔✔a natural and unavoidable catastrophe that interrupts the expected
course of events
AND ANSWERS SURE A+
✔✔reinsurance - ✔✔the transfer of insurance risk from one insurer to another through a
contractual agreement under which one insurer agrees, in return for a reinsurance
premium to indemnify another insurer for some or all of the financial consequences of
certain loss exposures covered by the primary insurance policies
✔✔primary insurer - ✔✔in reinsurance, the insurer that transfers or cedes all or part of
the insurance risk it has assumed to another insurer in a contractual agreement
✔✔reinsurer - ✔✔the insurer that assumes some or all of the potential costs of insured
loss exposures of the primary insurer in a reinsurance contractual agreement
✔✔facultative reinsurance - ✔✔reinsurance of individual loss exposures in which the
primary insurer chooses which loss exposures to submit to the reinsurer, and the
reinsurer can accept or reject any loss exposures submitted
✔✔treaty reinsurance - ✔✔a reinsurance agreement that covers an entire class or
portfolio of loss exposures and proves that the primary insurer's individual loss
exposures that fall within the treaty are automatically reinsured
, ✔✔cosureties - ✔✔two or more sureties that execute the same bond obligations with
principal
✔✔bid bond - ✔✔contract bond guaranteeing that a contractor bidding on a
construction or supply contract will enter into the contract and will provide a
performance bond
✔✔miller act - ✔✔federal law that requires a contractors to post separate performance
and payment bonds guaranteeing payment for material and labor provided on federal
construction projects valued over a statutory amount
✔✔mechanic's lien - ✔✔a lien, granted by law to anyone who repairs a specific piece of
property, that secures payment for the repairs
✔✔maintenance bond - ✔✔a contract bond guaranteeing that the work will be from
defects in materials and workmanship for a specified period after the project is
completed
✔✔subdivision bond - ✔✔a contract bond guaranteeing a local governmental authority
that a subdivision developer will complete the subdivision in accordance with approved
proposals and at the developer's expense
✔✔supply contract bond - ✔✔a contract bond guaranteeing that a supplier will perform
the designated supply contract according to specifications
✔✔compliance only bonds - ✔✔a classifications of bonds that guarantee that the
principal will comply with the applicable laws for the business or activity
✔✔compliance with third party - ✔✔principal will obey laws according to the activity for
which the principal is licensed and pay damages to any third party suffering a loss
because of the principals failure to comply
✔✔tax or fee bonds - ✔✔a classifications of bonds that guarantee that merchandising
activities will be conducted according to law
✔✔merchandising and dealer bonds - ✔✔a classification of bonds that guarantee that
merchandising activities will be conducted according to law
✔✔reclamation and environmental bonds - ✔✔restoration of land to its original state
after completion of the principal's operation
✔✔act of god - ✔✔a natural and unavoidable catastrophe that interrupts the expected
course of events
