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AINS 101 EXAM 2025 LATEST QUESTIONS
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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 comany 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 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.
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 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, 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
Balance Sheet - CORRECT ANSWER >>>>provides the best indication of its financial position because it shows admitted assets, liabilities, and policyholders' surplus at a particular point in time. Which one of the following is the amount of business an insurer can write based on regulatory guidelines, usually a comparsion of the insurer's written premiums to the policyholders' surplus? - CORRECT ANSWER >>>>Capacity The two main sectors of the insurance industry are - CORRECT ANSWER >>>>Property-casualty insurance and life-health insurance 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
A liability loss has the following damages: Medical expenses:$10,000Damages for disfigurement:$50,000Damages for pain and suffering:$100,000 What is the amount of special damages? - CORRECT ANSWER >>>>$ 10, Special damages - CORRECT ANSWER >>>>specific, identifiable expenses Sean was driving and caused an injury to a pedestrian named Wilbur. In the context of the resulting claim made to Sean's insurance company and assigned to Andrea in the claims department, Sean and Wilbur and Andrea are, respectively, - CORRECT ANSWER >>>>Insured and claimant and claims representative
Which one of these is most directly associated with a satisfied customer? - CORRECT ANSWER >>>>Leads and referrals that can be used to generate new business For a loss exposure to be ideally insurable it must be definite in - CORRECT ANSWER >>>>Time, cause, and location. Because insurance contracts impose an obligation for ethical practices and behaviors on the parties while dealing with one another, an insurance contract is called a - CORRECT ANSWER >>>>Contract of utmost good faith. Which two of the four quadrants of risk are classified as pure risks? - CORRECT ANSWER >>>>Hazard risks and operational risks
Pravalt Construction Company pays less than its competitors for workers compensation insurance because Pravalt has had substantially fewer employee injuries than other firms in its class. This illustrates which one of the following benefits of insurance? - CORRECT ANSWER >>>>Promote risk control activity The processing of almost every claim involves which one of the following activities? - CORRECT ANSWER
Determining the amount of damages or extent of loss Erin has recently graduated from college and relocated to Chicago. She has purchased a car and rented an apartment and now needs to purchase insurance. She is comfortable buying from social media recommendations and recently was impressed with an insurer sending her coverage details online with a minimum of forms and
auto and homeowners policies. Which one of the following is most likely true regarding Allian and the policies it sells? - CORRECT ANSWER >>>>Allian issues more preprinted policies than manuscript forms. Winston is skimming through his new personal auto policy that just arrived. Winston discovers that every insurance policy is represented through a collection of policy provisions. He discovers all of the following policy provisions, EXCEPT: - CORRECT ANSWER >>>>Exceptions policy provisions - CORRECT ANSWER >>>>conditions, definitions, and declarations.
The other two main provisions in a policy are the insuring agreement, and the exclusions. Joe is the owner of JG Auto Repair. He is always frustrated with the amount of commercial insurance premium he pays every year, even though he has not had a single claim in over 10 years. Joe is looking to partner with an insurance company that will share its profits and maybe return a portion of his premium if the results are
underwriting process? - CORRECT ANSWER >>>>Monitor the underwriting decision Earned premiums are shown on an insurer's income statement because they are - CORRECT ANSWER
Revenues Windsor Insurance has sold more personal auto policies in the recent quarter than ever before in its history, thanks to new commission incentives for ambitious staff members. Even though Windsor is collecting more money upfront, it is actually making less per policy after remitting the higher commissions. Some claim payments are also now being delayed, resulting in many complaints against the company. Which one of the following objectives of insurance regulation is not being realized through this scenario? - CORRECT ANSWER Maintaining insurer solvency
If an insured wants to receive "new for old" in the event of a property loss, he or she would purchase - CORRECT ANSWER >>>>Replacement cost 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 Oscar's custom-built vehicle looks like a sausage sandwich on wheels. He plans to drive it to special events at schools around the country where it will serve as a mobile billboard to promote his product. Oscar is
Which one of the following is the correct formula for calculating an insurer's combined ratio? - CORRECT ANSWER >>>>Loss ratio + expense ratio James works very closely with producers on a daily basis. In addition to evaluating the applicants that the producers submit, James is involved in presenting policy quotations, processing policy endorsements, helping to explain coverages, and making coverage recommendations. James works as a - CORRECT ANSWER
Field Underwriter Field Underwriter - CORRECT ANSWER >>>>sometimes referred to as line underwriters, perform duties that include: selecting insureds, presenting policy quotations, Replacement cost 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 Oscar's custom-built vehicle looks like a sausage sandwich on wheels. He plans to drive it to special events at schools around the country where it will serve as a mobile billboard to promote his product. Oscar is Which one of the following is the correct formula for calculating an insurer's combined ratio? - CORRECT ANSWER >>>>Loss ratio + expense ratio James works very closely with producers on a daily basis. In addition to evaluating the applicants that the producers submit, James is involved in presenting policy quotations, processing policy endorsements, helping to explain coverages, and making coverage recommendations. James works as a - CORRECT ANSWER >>>>Field Underwriter Field Underwriter - CORRECT ANSWER >>>>sometimes referred to as line underwriters, perform duties that include: selecting insureds, presenting policy quotations, processing policy endorsements, helping to explain coverages and making coverage recommendations.
Many auto manufacturers have automated a portion of their assembly lines by introducing a smart product. The smart product performs repetitive tasks, such as making the same weld on each vehicle frame as it passes the smart product. These smart products, which can be fixed or mobile, reduce repetitive motion injuries. They can also be used to perform dangerous tasks and for heavylifting jobs. These smart products, enabled by artificial intelligence, are called - CORRECT ANSWER
Robots Why are insurance regulators concerned about the effects of large catastrophes? - CORRECT ANSWER >>>>Insurers may become insolvent 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.
