AINS 101 LATEST 2024 COMPLETE EXAM/
170 ACTUAL EXAM QUESTIONS AND 100%
CORRECT VERIFIED ANSWERS/ GRADED A+
Which one of the following is the correct formula for calculating an insurer's
combined ratio? - Correct Answer - Loss ratio + expense ratio
Alicia works for the Drewman Agency, Sandi at insurer Greenway
Insurance, and Rosa at Grossman Brokers, all as customer service
representatives. Which one of the following is true regarding their work? -
Correct Answer - Alicia can process policy endorsements and explain
coverage to her customers
Rachel is a new employee of Westley Insurance, and has been asked to
review some existing policies to become familiar with the types of policies
she will be working with. Which one of the following will Rachel find is true
as she conducts her review? - Correct Answer - Rachel finds the policy
begins with a coverage overview and then goes into more coverage details.
Which two of the four quadrants of risk are classified as pure risks? -
Correct Answer - Hazard risks and operational risks
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
pg. 1
,An insurer's income statement shows amounts for all of the following -
Correct Answer - A. Incurred losses
B. Underwriting expenses
C. Earned premiums
The primary role of insurance is to - Correct Answer - Indemnify individuals
and organizations for covered losses.
Which one of the following best describes the concept of pooling? - Correct
Answer - Insureds share the cost of each other's losses.
Which one of the following best explains why regulators do not permit
insurers to include nonadmitted assets on their balance sheets? - Correct
Answer - They cannot be readily converted to cash.
A homeowners policy is a type of - Correct Answer - Personal property-
casualty insurance policy.
Coverage for money and other business property from various causes of
loss such as burglary, robbery, theft, and employee dishonesty typically is
provided by - Correct Answer - Commercial crime insurance
Which one of the following describes the characteristics of a mutual
insurance company? - Correct Answer - A corporation owned by
policyholders that provides insurance to its policyholders.
Which one of the following statements is correct regarding government
involvement in insurance? - Correct Answer - Federal and state
government are involved in insurance to help facilitate compulsory
insurance purchases.
pg. 2
,Admitted assets are types of property that regulators allow insurers to show
as assets on their financial statements because they are - Correct Answer -
Easily converted to cash.
A stock insurer differs from a reciprocal insurance exchange in which one
of the following ways? - Correct Answer - Stockholders own a stock insurer.
Members own a reciprocal insurance exchange.
Why are insurance regulators concerned about the effects of large
catastrophes? - Correct Answer - Insurers may become insolvent.
Earned premiums are shown on an insurer's income statement because
they are - Correct Answer - Revenues
Earned premiums are revenues shown on an insurer's income statement.
The two main sectors of the insurance industry are - Correct Answer -
Property-casualty insurance and life-health insurance.
Joe and Helene are married with two teenage children and two dogs. They
own three cars and a large house with a swimming pool in the back yard.
Their insurance agent advised them that the pool, teenage drivers, and
dogs put them at risk for large liability losses. Which one of the following
personal property-casualty insurance policies would provide them with
protection for their high potential for large liability losses? - Correct Answer
- Personal umbrella
A personal umbrella policy provides additional protection for people with a
high potential for large liability losses. Limits are usually in the millions,
above the limits offered in a homeowners or an auto policy.
pg. 3
, The difference between an independent agency and an exclusive agency is
that an - Correct Answer - Exclusive agency is contracted to sell insurance
for one insurer or group of insurers.
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.
Sports, Inc. is looking to obtain a commercial property policy on its building
for $400,000. If their insurer decides to charge them a rate of $0.50 per
$100 of building insurance, what premium must Sports, Inc. pay? - Correct
Answer - $4,000,000 (insured value) / 100 (exposure unit size) x .50 rate
per unit = $2,000
John's two-year-old bicycle was stolen. The bicycle's purchase price was
$700, its current replacement cost is $800, and depreciation was estimated
at $450. What was the bicycle's actual cash value? - Correct Answer - ACV
= replacement cost - depreciation
800-450 = $350
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.
Maria is a new producer who wears many hats when forming relationships
and then serving her established customers. In this capacity, which one of
the following scenarios most accurately describes her ongoing work
wearing the hat of "claims handler"? - Correct Answer - Veronica directly
pg. 4
170 ACTUAL EXAM QUESTIONS AND 100%
CORRECT VERIFIED ANSWERS/ GRADED A+
Which one of the following is the correct formula for calculating an insurer's
combined ratio? - Correct Answer - Loss ratio + expense ratio
Alicia works for the Drewman Agency, Sandi at insurer Greenway
Insurance, and Rosa at Grossman Brokers, all as customer service
representatives. Which one of the following is true regarding their work? -
Correct Answer - Alicia can process policy endorsements and explain
coverage to her customers
Rachel is a new employee of Westley Insurance, and has been asked to
review some existing policies to become familiar with the types of policies
she will be working with. Which one of the following will Rachel find is true
as she conducts her review? - Correct Answer - Rachel finds the policy
begins with a coverage overview and then goes into more coverage details.
Which two of the four quadrants of risk are classified as pure risks? -
Correct Answer - Hazard risks and operational risks
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
pg. 1
,An insurer's income statement shows amounts for all of the following -
Correct Answer - A. Incurred losses
B. Underwriting expenses
C. Earned premiums
The primary role of insurance is to - Correct Answer - Indemnify individuals
and organizations for covered losses.
Which one of the following best describes the concept of pooling? - Correct
Answer - Insureds share the cost of each other's losses.
Which one of the following best explains why regulators do not permit
insurers to include nonadmitted assets on their balance sheets? - Correct
Answer - They cannot be readily converted to cash.
A homeowners policy is a type of - Correct Answer - Personal property-
casualty insurance policy.
Coverage for money and other business property from various causes of
loss such as burglary, robbery, theft, and employee dishonesty typically is
provided by - Correct Answer - Commercial crime insurance
Which one of the following describes the characteristics of a mutual
insurance company? - Correct Answer - A corporation owned by
policyholders that provides insurance to its policyholders.
Which one of the following statements is correct regarding government
involvement in insurance? - Correct Answer - Federal and state
government are involved in insurance to help facilitate compulsory
insurance purchases.
pg. 2
,Admitted assets are types of property that regulators allow insurers to show
as assets on their financial statements because they are - Correct Answer -
Easily converted to cash.
A stock insurer differs from a reciprocal insurance exchange in which one
of the following ways? - Correct Answer - Stockholders own a stock insurer.
Members own a reciprocal insurance exchange.
Why are insurance regulators concerned about the effects of large
catastrophes? - Correct Answer - Insurers may become insolvent.
Earned premiums are shown on an insurer's income statement because
they are - Correct Answer - Revenues
Earned premiums are revenues shown on an insurer's income statement.
The two main sectors of the insurance industry are - Correct Answer -
Property-casualty insurance and life-health insurance.
Joe and Helene are married with two teenage children and two dogs. They
own three cars and a large house with a swimming pool in the back yard.
Their insurance agent advised them that the pool, teenage drivers, and
dogs put them at risk for large liability losses. Which one of the following
personal property-casualty insurance policies would provide them with
protection for their high potential for large liability losses? - Correct Answer
- Personal umbrella
A personal umbrella policy provides additional protection for people with a
high potential for large liability losses. Limits are usually in the millions,
above the limits offered in a homeowners or an auto policy.
pg. 3
, The difference between an independent agency and an exclusive agency is
that an - Correct Answer - Exclusive agency is contracted to sell insurance
for one insurer or group of insurers.
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.
Sports, Inc. is looking to obtain a commercial property policy on its building
for $400,000. If their insurer decides to charge them a rate of $0.50 per
$100 of building insurance, what premium must Sports, Inc. pay? - Correct
Answer - $4,000,000 (insured value) / 100 (exposure unit size) x .50 rate
per unit = $2,000
John's two-year-old bicycle was stolen. The bicycle's purchase price was
$700, its current replacement cost is $800, and depreciation was estimated
at $450. What was the bicycle's actual cash value? - Correct Answer - ACV
= replacement cost - depreciation
800-450 = $350
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.
Maria is a new producer who wears many hats when forming relationships
and then serving her established customers. In this capacity, which one of
the following scenarios most accurately describes her ongoing work
wearing the hat of "claims handler"? - Correct Answer - Veronica directly
pg. 4
