AINS 101 EXAM NEWEST 2024 ACTUAL
EXAM TEST BANK COMPLETE
QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) ALREADY
GRADED A+
Which one of the following statements is correct regarding the interaction between risk
control and other insurer functions?
Select one:
A. Risk control personnel can assist underwriters in modifying a new applicant's loss
exposures to meet eligibility requirements.
B. Risk control personnel are responsible for answering any complex questions that
insureds have about premium audits.
C. By making marginal accounts acceptable, risk control helps the Claims Department
settle losses.
D. Risk control representatives are responsible for compiling all the information required
for a premium audit. - Answer ✅ A. Risk control personnel can assist underwriters in
modifying a new applicant's loss exposures to meet eligibility requirements.
Which one of the following statements is correct regarding the interaction between risk
control and other insurer functions?
Select one:
A. Risk control representatives are responsible for compiling all the information required
for a premium audit.
B. A risk control evaluation can make the difference between the applicant's being
rejected or accepted by the underwriter.
C. Risk control representatives compile detailed data for the actuarial department to use
in establishing rates.
D. Risk control personnel are responsible for answering any complex questions that
insureds have about premium audits. - Answer ✅ B. A risk control evaluation can make
the difference between the applicant's being rejected or accepted by the underwriter.
Brian works in the Underwriting department for DGH Insurance. In addition to carefully
selecting insureds, he works with producers and premium auditors to ensure accurate
classification and pricing. Brian is a
Select one:
A. Account manager
B. Staff underwriter
C. Field underwriter
,D. Corporate underwriter - Answer ✅ C. Field underwriter
Tony now works at the corporate level for Newtown Insurance. He is considered a staff
underwriter. Which one of the following is primarily a responsibility of staff underwriters?
Select one:
A. Manage a book of business
B. Support producers
C. Revise underwriting guidelines
D. Recommend coverage - Answer ✅ C. Revise underwriting guidelines
Anna was reviewing an all-lines submission for SP Markets. SP Markets owns and
operates 5 small grocery stores located in the suburbs of Boston. The stores all seem to
be well maintained and clean. While the overall loss experience on the account is good
relative to the indicated premium, the loss runs show a frequency of small general
liability claims from customer slips and falls. Rather than reject the application for SP
Markets, Anna would like to suggest a coverage modification to the producer that could
make the application acceptable and possibly add value for the insured. Which one of
the following is a good coverage modification for Anna to suggest?
Select one:
A. Propose the general liability coverage, excluding the 2 locations that have most of
the small claims.
B. Offer a proposal with all lines of coverage except the general liability coverage.
C. Propose the general liability coverage at a lower premium - Answer ✅ C. Propose
the general liability coverage at a lower premium level, but apply a small deductible. (By
proposing a small deductible for the general liability exposure, the application become
acceptable to Anna. The lower premium level may be attractive to the insured, and the
deductible may offer a motivation for the risk to put in controls to reduce the frequency
of slips and falls. The options of excluding locations or coverage, or quoting an
unjustified premium do not add value for the insured.
Which one of the following is a temporary agreement providing insurance coverage until
the formal policy is issued?
Select one:
A. Book of business
B. Rating classification
C. Binder
D. Submission - Answer ✅ C. Binder (A binder is a temporary agreement providing
insurance coverage until the formal policy is issued.)
Bob is shopping for auto insurance. Insurance Company A's rating system determines
that Bob should be charged $800 per auto. If Bob is looking to insure four autos, what
premium will he be charged by Insurance Company A?
Select one:
A. $3,200
B. $2,400
C. $800
,D. $200 - Answer ✅ A. $3,200 ($800 per auto x 4 autos = $3,200.)
Produce, such as apples or grapes, may be priced by the unit or by the pound. In
insurance, these measures are similar to
Select one:
A. Exposure units.
B. Premiums.
C. Construction cost index.
D. Rates. - Answer ✅ A. Exposure units.
Reggie, Harper, Kimmie, and Stefan work in the claims department of North Insurance
Company (NIC). Which one of the following is true regarding the various types of claims
personnel employed at NIC?
Select one:
A. Kimmie enjoys her role as a telephone claims representative whose specialty is in-
person meetings.
B. Stefan, a claims supervisor, reviews files and helps determine staff development
strategies.
C. Harper is a specialized claims representative who works for a small local insurance
organization.
D. Reggie, a field claims representative, works in NIC's main office and likes having an
indoor desk job. - Answer ✅ B. Stefan, a claims supervisor, reviews files and helps
determine staff development strategies.
Stephanie works for Waynesgood Insurance. She appreciates the help she receives
from Clem in the company's claims department who provides her with recent statistics
and comments on Waynesgood's customer satisfaction levels. Stephanie works in
which one of the following departments?
Select one:
A. Premium auditing
B. Marketing
C. Risk control
D. Underwriting - Answer ✅ B. Marketing
Henry is a new claims representative with Able Insurers. Which one of the following will
Henry find is true as he gains more experience with his company's claims handling
process?
Select one:
A. Henry will determine the type of loss - such as property damage or liability - for each
claim he handles.
B. Henry sits in the cubicle next to another claims representative, Marty, who assigns
claims to Henry.
C. Henry learns that policy denials do not need to be routinely reflected or included in
the claims file.
, D. Henry learns that all claims, no matter the circumstances or parties involved, could
involve subrogation. - Answer ✅ A. Henry will determine the type of loss - such as
property damage or liability - for each claim he handles.
Work on a new claim begins for claim representative Anita upon receipt of a claim
notice. Anita gathers initial information and verifies coverage. From the list of activities
below, the next step Anita would take in the process is
Select one:
A. Set a loss reserve.
B. Make an offer to settle the claim.
C. Retain causation experts.
D. Assign the claim to defense counsel. - Answer ✅ A. Set a loss reserve.
Wayne, an insured, submits a claim for a seven-year-old refrigerator that was damaged
due to lightning. Claims representative Guillaume will probably factor in an allowance for
wear and tear. This is called
Select one:
A. Replacement cost.
B. Depreciation.
C. Stated amount.
D. Agreed amount. - Answer ✅ B. Depreciation
Actual cash value (ACV) is
Select one:
A. Replacement cost plus depreciation.
B. Replacement cost minus agreed value.
C. Agreed value minus depreciation.
D. Replacement cost minus depreciation. - Answer ✅ D. Replacement cost minus
depreciation.
Adjuster Toni is evaluating damages in a bodily injury liability claim where she has
determined that the insured is completely at fault for the accident. The claimant suffered
a sprain and strain injury to his neck. His special damages total $1,500. He was out of
work for a week, was disabled and prevented from performing some regular activities
for a month, and attended physical therapy for six weeks. In assessing general
damages, Toni should
Select one:
A. Multiply the amount of special damages of $1,500 by three as a rule of thumb, and
pay $4,500.
B. Multiply $1,500, the amount of special damages, by six, the number of weeks of
physical therapy, and pay $9,000.
C. Use past cases which are similar as a guide.
D. Consider what she would want to be paid if she were in claimant's shoes. - Answer
✅ C. Use past cases which are similar as a guide.
