AINS 101 EXAM LATEST ACTUAL EXAM
QUESTIONS AND DETAILED CORRECT
ANSWERS (VERIFIED ANSWERS) | A+
GRADE 2024
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 Correct Answer
Adequate policyholders' surplus
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? Correct Answer
Anchoy can use group marketing to target large numbers
of recent local college graduates.
The key to the direct writer marketing system is that
Correct Answer The insurer is using its own employees as
producers.
What term refers to the ability of an insurer to meet its
obligations as they become due? Correct Answer
Solvency
Renegade Insurance prides itself on its upstanding
reputation through its commitment to small communities'
homeowners coverage needs over the past twenty years.
,Which one of Renegade's actions over this time would
best illustrate its continued commitment to maintaining its
solvency? Correct Answer Renegade keeps enough cash
assets on hand to cover claims on policies long after it
collected the premiums from customers.
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? Correct Answer Insurance
regulation protects customers by guaranteeing insurance
is available and accessible to everyone who needs it
Which one of the following is the best measure of the
amount of insurance provided for a given period? Correct
Answer Earned premium
Which one of the following types of financial statements
shows the financial position of an insurance company at
any particular point in time? Correct Answer Balance
sheet
Ideally insurable loss exposures are subject to losses that
Correct Answer Are definite in time, cause, and location.
An insurance policy is considered a contract of adhesion
when it is drafted by the Correct Answer Insurer.
,An insurer has decided to take an extremely narrow
interpretation of a property insurance policy provision to
limit the number of loss payments it will need to make. It
realizes that its interpretation is probably wrong, but it
knows that individual insured's loss amounts will be small,
such that most insureds will not take the trouble to file
lawsuits against it. The insurer may be violating the
principle that an insurance policy is Correct Answer A
contract of utmost good faith.
The Insurance Services Office, Inc. (ISO) commercial
package policy is an example of a Correct Answer
Modular policy.
New homeowner and small business owner Sallie learns
that an insurance policy may contain other documents
than its insurance forms. Accordingly, which one of the
following will Sallie find is true regarding her new
insurance purchases? Correct Answer Sallie's application
may contain endorsements which modify the basic policy
form.
Which one of the following most accurately describes one
of the policy provisions in an insurance policy? Correct
Answer The exclusions are in place to reduce duplicate
coverage.
The big differences between property and liability policies
are found in their Correct Answer Insuring Agreements
, Bill is an insurance producer for and employed by ABC
Insurance Company (ABC). He represents only ABC when
marketing insurance products, and uses an administrative
staff also employed by ABC. Bill is a producer in the
Correct Answer Direct writer marketing system
Because the insurance company usually determines policy
wording and the insured has little choice but to "take it or
leave it," an insurance contract is a Correct Answer
Contract of adhesion
Which one of the following best explains why producers
should be alert to changes in clients' loss exposures?
Correct Answer Implemented risk management
techniques may prove to be ineffective or become
obsolete
At Greenfield Insurance Company, Bernadette and Rachel
are corporate underwriters, and Tomas and Jose are field
underwriters. All of the following are underwriting activities
typically performed by corporate (or staff) underwriters like
Bernadette and Rachel, EXCEPT: Correct Answer
Support producers and insureds
Joel is the underwriter for Stanton Industries. He received
a notice from the premium auditor on the account. After a
recent visit to the insured's location, the auditor wanted to
make Joel aware of a decline in the business and some
questionable business practices. Which one of the
following types of hazards is the auditor identifying?
Correct Answer Moral hazards
QUESTIONS AND DETAILED CORRECT
ANSWERS (VERIFIED ANSWERS) | A+
GRADE 2024
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 Correct Answer
Adequate policyholders' surplus
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? Correct Answer
Anchoy can use group marketing to target large numbers
of recent local college graduates.
The key to the direct writer marketing system is that
Correct Answer The insurer is using its own employees as
producers.
What term refers to the ability of an insurer to meet its
obligations as they become due? Correct Answer
Solvency
Renegade Insurance prides itself on its upstanding
reputation through its commitment to small communities'
homeowners coverage needs over the past twenty years.
,Which one of Renegade's actions over this time would
best illustrate its continued commitment to maintaining its
solvency? Correct Answer Renegade keeps enough cash
assets on hand to cover claims on policies long after it
collected the premiums from customers.
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? Correct Answer Insurance
regulation protects customers by guaranteeing insurance
is available and accessible to everyone who needs it
Which one of the following is the best measure of the
amount of insurance provided for a given period? Correct
Answer Earned premium
Which one of the following types of financial statements
shows the financial position of an insurance company at
any particular point in time? Correct Answer Balance
sheet
Ideally insurable loss exposures are subject to losses that
Correct Answer Are definite in time, cause, and location.
An insurance policy is considered a contract of adhesion
when it is drafted by the Correct Answer Insurer.
,An insurer has decided to take an extremely narrow
interpretation of a property insurance policy provision to
limit the number of loss payments it will need to make. It
realizes that its interpretation is probably wrong, but it
knows that individual insured's loss amounts will be small,
such that most insureds will not take the trouble to file
lawsuits against it. The insurer may be violating the
principle that an insurance policy is Correct Answer A
contract of utmost good faith.
The Insurance Services Office, Inc. (ISO) commercial
package policy is an example of a Correct Answer
Modular policy.
New homeowner and small business owner Sallie learns
that an insurance policy may contain other documents
than its insurance forms. Accordingly, which one of the
following will Sallie find is true regarding her new
insurance purchases? Correct Answer Sallie's application
may contain endorsements which modify the basic policy
form.
Which one of the following most accurately describes one
of the policy provisions in an insurance policy? Correct
Answer The exclusions are in place to reduce duplicate
coverage.
The big differences between property and liability policies
are found in their Correct Answer Insuring Agreements
, Bill is an insurance producer for and employed by ABC
Insurance Company (ABC). He represents only ABC when
marketing insurance products, and uses an administrative
staff also employed by ABC. Bill is a producer in the
Correct Answer Direct writer marketing system
Because the insurance company usually determines policy
wording and the insured has little choice but to "take it or
leave it," an insurance contract is a Correct Answer
Contract of adhesion
Which one of the following best explains why producers
should be alert to changes in clients' loss exposures?
Correct Answer Implemented risk management
techniques may prove to be ineffective or become
obsolete
At Greenfield Insurance Company, Bernadette and Rachel
are corporate underwriters, and Tomas and Jose are field
underwriters. All of the following are underwriting activities
typically performed by corporate (or staff) underwriters like
Bernadette and Rachel, EXCEPT: Correct Answer
Support producers and insureds
Joel is the underwriter for Stanton Industries. He received
a notice from the premium auditor on the account. After a
recent visit to the insured's location, the auditor wanted to
make Joel aware of a decline in the business and some
questionable business practices. Which one of the
following types of hazards is the auditor identifying?
Correct Answer Moral hazards
