AINS 101 exam Questions and Answers
Graded A+
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
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,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
Moral hazards - Correct answer-include questionable business practices or a failing
business.
James West is a claims rep with Hatters Insurance. As he learns how to handle a
claim from start to finish, which one of the following best describes the correct
order for him to follow during this process? - Correct answer-Identifying the
policy, calculating a loss reserve, determining the cause of loss, preparing a loss
statement
Margaret was severely injured and scarred due to a recent accident. Which one of
the following is an example of general damages Margaret received? - Correct
answer-Compensation for disfigurement
Donna is an insurance producer. She makes an appointment with potential
policyholder Sandie to review her loss exposures. She asks Sandie to complete a
questionnaire to assist her in this effort. Donna is conducting a - Correct answer-
Risk management review
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, 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.
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-$2,000
Destructive competition in the insurance industry could result in - Correct answer-
Insurance shortages
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 is Hometown Insurer's loss ratio? - Correct answer-75%
Loss Ratio - Correct answer-incurred losses divided by its earned premiums
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
Graded A+
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
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,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
Moral hazards - Correct answer-include questionable business practices or a failing
business.
James West is a claims rep with Hatters Insurance. As he learns how to handle a
claim from start to finish, which one of the following best describes the correct
order for him to follow during this process? - Correct answer-Identifying the
policy, calculating a loss reserve, determining the cause of loss, preparing a loss
statement
Margaret was severely injured and scarred due to a recent accident. Which one of
the following is an example of general damages Margaret received? - Correct
answer-Compensation for disfigurement
Donna is an insurance producer. She makes an appointment with potential
policyholder Sandie to review her loss exposures. She asks Sandie to complete a
questionnaire to assist her in this effort. Donna is conducting a - Correct answer-
Risk management review
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
, 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.
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-$2,000
Destructive competition in the insurance industry could result in - Correct answer-
Insurance shortages
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 is Hometown Insurer's loss ratio? - Correct answer-75%
Loss Ratio - Correct answer-incurred losses divided by its earned premiums
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
