AINS 101 Exam Prep Study Guide
Solutions
Loss exposure - ANSWER-any condition or situation that presents a possibility of loss, whether or
not an actual loss occurs
Premium - ANSWER-the price of the insurance coverage provided for a specified period
Indemnify - ANSWER-to restore a party who ha...
Underwriting income - ANSWER✔✔-income an insurer earns from premiums paid by policyholders
minus incurred losses and underwriting expenses
Balance sheet - ANSWER✔✔-the financial statement that reports the assets, liabilities, and owner's
equity of an organization as of a specific date
Policyholder's surplus - ANSWER✔✔-an insurer's assets minus its liabilities, which represents its net
worth
Loss adjustment expenses - ANSWER✔✔-the expense that an insurer incurs to investigate, defend, and
settle claims according to the terms specified in the insurance policy
Assets - ANSWER✔✔-types of property, both tangible and intangible, owned by an entity
Liabilities - ANSWER✔✔-financial obligations, or debts, owned by a company to another entity usually
the policyholder in the case of an insurer
Investment income - ANSWER✔✔-interest, dividends, and net capital gains received by an insurer from
the insurer's financial assets, minus its investment expenses
Loss reserve - ANSWER✔✔-an estimate of the amount of money the insurer expects to pay in the future
for losses that have occurred
Unearned premium reserve - ANSWER✔✔-an insurer liability representing the amount of premiums
received from policyholders that are not yet earned
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