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AINS 101 EXAM QUESTIONS AND CORRECT SOLUTIONS GRADE A||LATEST UPDATE 2024/2025
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AINS 101 EXAM QUESTIONS AND CORRECT SOLUTIONS GRADE A||LATEST UPDATE 2024/2025
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AINS 101 EXAM QUESTIONS AND CORRECT SOLUTIONSGRADE A||LATEST UPDATE 2024/2025
Risk - CORRECT ANSWER : Which one of the following represents uncertainty
about outcomes that can be negative or positive?
Insureds share the cost of each other's losses. - CORRECT ANSWER : Which
one of the following best describes the concept of pooling?
Personal property-casualty insurance policy. - CORRECT ANSWER : A
homeowners policy is a type of
Select one:
Commercial crime insurance. - CORRECT ANSWER : Coverage for money and
other business property from various causes of loss such as burglary, robbery, theft,
and employee dishonesty typically is provided by
Mutual Insurer - CORRECT ANSWER : A type of insurer that is owned by
policyholders and may pay dividends to policyholders as a return of a portion of
premiums paid is a
Government programs can meet legitimate public demands unmet by private
insurers. - CORRECT ANSWER : Which one of the following correctly
describes a reason for government involvement in property-casualty insurance?
Artificial Intel - CORRECT ANSWER : 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
Speculative risk - CORRECT ANSWER : Jimmy decided to buy a house in his
neighborhood that had been foreclosed on by the bank that held the mortgage. He
is hoping to do some renovation and repair work on the house, and then sell it for a
quick profit. Which one of the following types of risk is this for Jimmy?
East Insurance comes up with a new rate structure allowing "preferred customers"
discounted policies when they continually renew year after year; East eventually
loses needed revenue but is rewarded by its competitors leaving the market. -
CORRECT ANSWER : One of the reasons for insurance regulation is to prevent
destructive competition. In which one of the following scenarios would destructive
competition be exhibited?
Insurance regulation protects customers by guaranteeing insurance is available and
accessible to everyone who needs it. - CORRECT ANSWER : 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?
Solvency - CORRECT ANSWER : What term refers to the ability of an insurer to
meet its obligations as they become due?
Total Liabilities - CORRECT ANSWER : An insurer's financial statement shows
a loss reserve and an unearned premium reserve. These reserves are part of the
insurer's
Unearned Premiums - CORRECT ANSWER : Which one of the following is part
of written premiums?
, Balance Sheet - CORRECT ANSWER : Which one of the following types of
financial statements shows the financial position of an insurance company at any
particular point in time?
ometown Insurer's expense ratio is its incurred underwriting expenses ($2,000,000)
divided by its written premiums ($5,000,000), or 40 percent. - CORRECT
ANSWER : The financial report for Hometown Insurer contains the following
information:
Earned premiums $4,000,000
Written premiums $5,000,000
Net investment income $1,000,000
Incurred Losses $3,000,000
Incurred underwriting expense $2,000,000
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 was the Hometown Insurer's combined ratio? - CORRECT ANSWER :
Hometown's combined ratio equals its loss ratio ($3,000,000/$4,000,000) or 75
percent, plus its expense ratio ($2,000,000/$5,000,000) or 40 percent, for a total of
115 percent.
The insurer is using its own employees as producers. - CORRECT ANSWER :
The key to the direct writer marketing system is that
Is free to work with as many different insurers as it wants. - CORRECT
ANSWER : Spencer Insurance Associates is an independent agency selling
primarily homeowners policies. This agency
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