AINS 21 Exam Questions with All Correct Answers
Which one of the following is generally exempt from state insurance regulations pertaining to policy forms and rates?
A. Surplus line insurers
B. Health insurers
C. Commercial property insurers
D. Workers compensation insurers - Answer Surp...
AINS 21 Exam Questions with All
Correct Answers
Which one of the following is generally exempt from state insurance regulations
pertaining to policy forms and rates?
A. Surplus line insurers
B. Health insurers
C. Commercial property insurers
D. Workers compensation insurers - Answer ✅ Surplus line insurers
A flex rating law is - Answer ✅ An insurance rating law under which prior approval is
required only if the new rates exceed a certain percentage above (and sometimes
below) the rates previously file.
The two objectives of insurance policy form regulation are to ensure that policies are
clear and readable and to - Answer ✅ Detect and address any policy provisions that are
unfair.
Some insurance rating laws allow rates to be put into use immediately but require
insurers to files the rates with the state within a specific period of time. These types of
laws are known as - Answer ✅ Use-and-file laws.
When deciding to approve or disapprove an insurer's request for a rate, a state
insurance commissioner must determine if the rates are adequate. Adequate means
that the rates should be - Answer ✅ Sufficient to pay all claims and the expenses
related to those claims.
For an insurer to be considered solvent, states require it to have financial reserves -
Answer ✅ Well in excess of its ordinary expenses.
Market conduct regulation focuses on insurers' treatment of applicants for insurance,
insureds, and others who present claims for coverage. Market conduct regulation
affects all of the following areas of operations of an insurer, EXCEPT:
Select one:
A. Risk control
B. Sales
C. Claims handling
, D. Underwriting - Answer ✅ Risk control
Insurers are required to submit annual financial statements to - Answer ✅ State
insurance departments.
Which one of the following is true regarding the administration of the Insurance
Regulatory Information System (IRIS)?
A. If an insurer cannot be rehabilitated, the state's guaranty fund may be available to
increase the effects of the insurer insolvency.
B. Under a special provision in state licensing laws, state regulators are empowered to
completely take over an insurer at any time.
C. If regulators determine that an insurer is insolvent, the state insurance department
places it in receivership.
D. If the insurer has financial ratios that are inside predetermined norms, IRIS identifies
the company for regulatory attention. - Answer ✅ If regulators determine that an insurer
is insolvent, the state insurance department places it in receivership.
Unfair trade practices acts involve which one of the following insurance company
operations? - Answer ✅ Underwriting
Which one of the following statements is true? - Answer ✅ D. Insurance regulators
review policies to determine if they benefit consumers.
The capital of a stock insurance company comes primarily from - Answer ✅ Sale of
company stock
Don is an agent trying to find appropriate coverage for his customer, Wayne Industrial
Supplies, which has large, unique, and hard-to-place commercial loss exposures.
Fortunately, Wayne is in a state that has deregulated some insurance coverages, which
will make Don's job a little easier. Based on this information, which one of the following
statements is true? - Answer ✅ If Wayne's loss exposures can be covered by inland or
ocean marine coverages, these may be exempt from regulation.
A northeastern state in the US has a mandatory rate law in effect. A southeastern state
has established a file-and-use law. A Pacific coast state requires insurers to follow a
prior-approval law, and a midwest state has enacted a flex rating law. Which one of the
states and its regulators asserts the greatest extent of control over insurer rates? -
Answer ✅ Midwest, pacific coast, southeastern
answer - Northeastern
Which one of the following is generally exempt from state insurance regulations
pertaining to policy forms and rates? - Answer ✅ Surplus line insurers
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