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AINS 101 exam with questions and correct answers
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AINS 101 exam with questions and correct answers
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AINS 101 exam with questions and correct answersWhich one of the following statements is correct regarding the benefits provided
by insurance?
A. Insurance reduces the financial consequences of loss exposures but not the
related uncertainty.
B. The reduction in losses paid by insurers due to risk control measures benefits
individual insureds but not society as a whole.
C. Insurance helps reduce the financial burden to society by compensating accident
victims.
D. The primary role of insurance is to meet mandatory insurance requirements. -
CORRECT ANSWER : C. Insurance helps reduce the financial burden to society
by compensating accident victims.
Which one of the following represents uncertainty about outcomes that can be
negative or positive?
A. Risk
B. Transfer
C. Loss exposure
D. Pooling - CORRECT ANSWER : A. Risk
The insurance agent suggested that Sally's Snack Shop buy a policy that combines
property, crime, and liability coverages into one policy. This is referred to as a(n)
A. Commercial package policy (CPP).
B. Commercial umbrella policy.
C. Employee dishonesty policy.
,D. Workers compensation policy. - CORRECT ANSWER : A. Commercial
package policy (CPP).
Commercial Umbrella Policy - CORRECT ANSWER : Type of policy that
provides broad coverage for an insured's liability over and above liability covered
by an underlying contract.
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
An insurer that was formed for the purpose of earning a profit for its stockholders
is a
A. Mutual insurer.
B. Reciprocal insurance exchange.
C. Stock insurer.
D. Captive insurer. - CORRECT ANSWER : C. Stock insurer.
Mutual Insurer - CORRECT ANSWER : An insurer that is owned by its
policyholders and formed as a corporation for the purpose of providing insurance
to them.
Artificial intelligence - CORRECT ANSWER : a subdiscipline of computer
science that attempts to simulate human thinking
Mechanical sensors - CORRECT ANSWER : monitoring devices that can be
used to determine position of components, force applied, or movement of parts.
Which one of the following best describes the concept of pooling?
, A. The financial consequences of unanticipated losses are transferred to an insurer.
B. Insureds share the cost of each other's losses.
C. Risk management is concerned with positive and negative risks.
D. Insurance benefits society as a whole. - CORRECT ANSWER : B. Insureds
share the cost of each other's losses.
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
A. Captive insurer.
B. Mutual insurer.
C. Reciprocal insurance exchange.
D. Stock insurer. - CORRECT ANSWER : B. Mutual insurer.
Speculative risk - CORRECT ANSWER : A chance of loss, no loss, or gain.
Pure risk - CORRECT ANSWER : a risk that presents the chance of loss but no
opportunity for gain
Strategic risk - CORRECT ANSWER : A dramatic ideological shift in corporate
policies after a national election is an example of strategic risk
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?
A. Insurance regulation prevents insurers from covering catastrophic occurrences
so insurers can remain solvent.
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