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AINS 101 Exam Questions and answers | Latest 2024/25 RATED A+
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AINS 101 Exam Questions and answers | Latest 2024/25 RATED A+
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AINS 101 Exam Questions and answers |Latest 2024/25 RATED A+
As a single mother on a very tight budget, Ciara is tempted to skimp on her insurance.
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However, her friend Mehmet tells her not to skimp on insurance, because it will help
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manage her cash flows. Which one of the following examples best illustrates Mehmet's
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point?
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A. Ciara needs her car to get to her job, and she needs her job to make car payments and
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pay for her car insurance.
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B. When her car's windshield breaks, Ciara has to pay only $100 of the $600 cost of
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replacing it.
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C. When her car's transmission goes out a month after the warranty expires, Ciara is
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faced with a $1,100 repair bill.
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D. Ciara finds it difficult to come up with a $787 auto insurance premium every six months.
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- When her car's windshield breaks, Ciara has to pay only $100 of the $600 cost of
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replacing it.
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Which one of the following statements is correct regarding the benefits provided by
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insurance?
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A. Insurance reduces the financial consequences of loss exposures but not the related
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uncertainty.
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B. The primary role of insurance is to meet mandatory insurance requirements.
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C. The reduction in losses paid by insurers due to risk control measures benefits individual
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insureds but not society as a whole.
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D. Insurance helps reduce the financial burden to society by compensating accident
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victims. - Insurance helps reduce the financial burden to society by compensating
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accident victims.
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Shelton Industries experienced a fire in its manufacturing plant. Several employees
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suffered burns and smoke inhalation injuries as they tried to escape the building. Which
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one of Shelton Industries' commercial property-casualty policies would pay for the
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employees' injuries and illnesses? - Workers compensation insurance
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II A homeowners policy is a type of - Personal property-casualty insurance policy.
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Which one of the following correctly describes a reason for government involvement in
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property-casualty insurance?
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A. Selling insurance provides the government with a non-tax source of revenues and
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profits.
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B. Government programs can meet legitimate public demands unmet by private insurers.
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,C. Competition from government plans keeps private insurer's premiums competitive.
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D. Preventing high-risk individuals or activities from being insured is in the public interest. -
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Government programs can meet legitimate public demands unmet by private insurers.
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Insurance Company wrote a commercial liability policy for a manufacturer of off-road
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motorcycles. The potential costs of the insured's loss exposure exceed Insurance
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Company's capacity. Insurance Company could consider which one of the following types
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of contractual transferring agreement to meet its needs? - Reinsurance
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In an effort to reduce expenses, increase profitability, and reduce human errors; ABC
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Insurance Company decided to automate most of its personal lines underwriting function.
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The company now uses standardized application forms that are submitted electronically
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to one of the company's regional offices. At each regional office, a computer with a
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scanner reads the applications. The computer has been programmed with acceptable
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answers to the questions. If the answers on the application are all acceptable, the policy is
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automatically issued. Rejected applications are automatically forwarded to a human
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underwriter who reviews them. The use of this technology has reduced the company's
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expense ratio by two and a half percent, and reduced the time it takes to issue a policy.
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ABC Insurance Company's use of computers to evaluate applications electronically is an
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application of
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A. Radiant sensors.
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B. Artificial intelligence.
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C. - Artificial intelligence.
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Jimmy decided to buy a house in his neighborhood that had been foreclosed on by the
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bank that held the mortgage. He is hoping to do some renovation and repair work on the
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house, and then sell it for a quick profit. What type of risk is this? - Speculative Risk
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II Which one of the following best describes the concept of pooling?
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A. The financial consequences of unanticipated losses are transferred to an insurer.
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B. Risk management is concerned with positive and negative risks.
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C. Insureds share the cost of each other's losses.
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D. Insurance benefits society as a whole. - Insureds share the cost of each other's
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losses.
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Which one of the following represents uncertainty about outcomes that can be negative or
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positive?
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A. Loss exposure
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B. TransferII
C. Risk II
D. Pooling - Risk
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, Coverage for money and other business property from various causes of loss such as
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burglary, robbery, theft, and employee dishonesty typically is provided by - Commercial
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crime insurance.
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The insurance agent suggested that Sally's Snack Shop buy a policy that combines
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property, crime, and liability coverages into one policy. This is referred to as a(n) -
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Commercial Package Policy (CCP)
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II Which one of the following describes the characteristics of a mutual insurance company?
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A. A corporation owned by policyholders that provides insurance to its policyholders.
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B. An unincorporated association that provides reciprocal coverage to subscribers.
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C. An unincorporated association that earns profits for its individual investors.
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D. A corporation owned by stockholders that earns profits for the stockholders. - A
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corporation owned by policyholders that provides insurance to its policyholders.
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II A reinsurance company
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A. Assumes loss exposures from a primary insurer.
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B. Provides primary insurance for loss exposures that private insurers are unwilling to
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provide.
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C. Is formed to write all or part of the insurance for a parent company.
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D. Transfers losses to a primary insurer. - Assumes loss exposures from a primary
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insurer.
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Autonomous Vehicle Applications (AVA) is a start-up company that develops safety
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technologies that can be sold to companies that are producing autonomous vehicles. One
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technology AVA is developing allows an autonomous vehicle to detect, extract, and
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analyze images; and then to respond to the images. For example, the technology would
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detect a presence in a crosswalk, extract the image, and a computer would analyze the
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image. When the image was determined to be a human being, the vehicle would slow
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down or stop until the crosswalk was clear. This technology, which is designed to capture
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and analyze images, and to act on the recognition of the image; is called - Computer
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Vision
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Mutual Fund Company (MFC) offers a wide array of mutual fund options to investors.
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Each mutual fund has a different fund objective and set of investment guidelines that
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apply to the fund. While MFC gives considerable freedom to its fund portfolio managers,
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they are required to abide by the fund's investment guidelines. To monitor compliance,
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MFC developed a computer algorithm. The computer algorithm continuously monitors
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each fund's compliance with investment guidelines. If a fund manager violates the
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investment guidelines, the computer immediately notifies MFC's internal control director,
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and corrective action is taken. MFC's use of the computer algorithm to monitor investment
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compliance and to provide notification when corrective action is necessary illustrates use
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of - Artificial Intelligence
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, The primary role of insurance is to - Indemnify individuals and organizations for covered
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losses
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II Which one of the following best describes the concept of pooling?
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A. Insureds share the cost of each other's losses.
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B. Risk management is concerned with positive and negative risks.
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C. The financial consequences of unanticipated losses are transferred to an insurer.
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D. Insurance benefits society as a whole. - Insureds share the cost of each other's
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losses.
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A type of insurer that is owned by policyholders and may pay dividends to policyholders
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as a return of a portion of premiums paid is a - Mutual insurer.
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The state of Maryland operates a residual auto plan (the Maryland Auto Insurance
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Fund—MAIF) that provides coverage for drivers who are unable to obtain coverage from
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private insurers. Which one of the following is the best rationale for the MAIF program?
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A. Private insurers face limited competition, and the state increases competitive
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pressures by operating this type of plan.
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B. Auto insurance is compulsory, and the program makes it possible for all drivers to have
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reasonably priced insurance.
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C. Private insurers overcharge for auto insurance, and the state provides a low-cost
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alternative.
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D. Auto insurance for high-risk drivers is profitable, and the program enables the state to
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share in the profits. - Auto insurance is compulsory, and the program makes it possible
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for all drivers to have reasonably priced insurance.
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ABC Company experienced a dramatic ideological shift in corporate policies after a
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national election. This is an example of which one of the following quadrants of risk?
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A. Operational risk
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B. Financial risk
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C. Strategic risk
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D. Hazard risk - Strategic Risk
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Renegade Insurance prides itself on its upstanding reputation through its commitment to
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small communities' homeowners coverage needs over the past twenty years. Which one
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of Renegade's actions over this time would best illustrate its continued commitment to
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maintaining its solvency?
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A. Renegade emphasizes that its insurance is readily available and accessible to
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customers in its service area that need it.
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B. Renegade's producers know policy language well so that they can easily and
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understandably answer policyholders' questions.
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