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AINS Practice Exam Review 2023/2024 already graded A+
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AINS Practice Exam Review 2023/2024 already graded A+
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AINS Practice Exam ReviewOne distinguishing feature between independent agency systems and other marketing systems
is the... - ANSagency expiration list
Foreign Insurer - ANSAn insurer licensed to operate in a state but incorporated in another state
Domestic Insurer - ANSAn insurer doing business in the jurisdiction in which it was incorporated
Alien Insurer - ANSAn insurer domiciled in a country other than the US
Direct Response Marketing System - ANSGreatly reduces compensation costs but has higher
advertising costs
Agency Expiration List - ANSAn agency's most valuable asset (does not belong to insurer)
Important consideration when selecting distribution channels - ANSDoes the channel capitalize
on its core capabilities?
Knowledge acquired by the agent is presumed to be.. - ANSknowledge acquired by the insurer
Premium collection method used for personal insurance and small commercial accounts -
ANSDirect Bill
What specifies scope of authority of an agent? - ANSAgency contract
Agency Bill - ANSPayment procedure in which a producer sends premium bills to the insured,
collects the premium, and sends the premium to the insurer, less any commission
Item Basis - ANSPremium (less commission) is forwarded to the insurer when the producer
collects it or when it comes due. Least complex method
Statement Basis - ANSInsurer sends statement to the producer showing the premiums due.
Producer is obligated to pay the premiums as due.
Account Current Basis - ANSProducer periodically prepares a statement showing the premiums
due to the insurer, after deducting appropriate commissions, and transmits the amount to the
insurer. The agency contract will indicate how often the producer must submit the account
current statement (usually monthly). Producer must pay when premium is due, even if
policyholder hasn't paid.
, Purposes of underwriting - ANSDevelop and maintain a book of business, guard against
adverse selection, ensure adequate policyholder's surplus and enforce underwriting guidelines
Experience Rating - ANSA rating plan that adjusts the premium for the current policy period to
recognize the loss experience of the insured organization during past policy periods
Schedule Rating - ANSA rating plan that awards debits and credits based specific categories,
such as the care and condition of premises of the training and selection of employees, to reflect
a modified premium that the class rate does not include
Retrospective Rating - ANSA ratemaking technique that adjusts the insured's premium for the
current policy period based on the insured's loss experience during the current period; paid
losses or incurred losses may be used to determine loss experience
Class Rating - ANSA rating approach that uses rates reflecting the average probability of loss
for businesses within large groups of similar risks; the predominant method for determining rate
for commercial properties
Law of large numbers - ANSA mathematical principal that state that as the number of similar but
independent exposure units increases, the relative accuracy about the future outcomes (losses)
also increases
If an insurance company wishes to increases its written premium volume, it must... - ANShave
adequate policyholder's surplus
During a catastrophe, an insurer should... - ANSuse abbreviated claims handling procedures,
increase settlement authority of producers, and settle all questions of valuation in the
policyholder's favor
Many claims occurring from a single event is called a... - ANScatastrophe
In the claims valuation process, out-of-pocket expenses are called... - ANSspecial damages
Constructive Total Loss - ANSA loss that occurs when the cost to repair the damaged property
plus its remaining salvage value equals or exceeds the pre-loss value
General Damages - ANSA monetary award to compensate a victim for losses, such as pain and
suffering, that do not involve specific measurable expenses
Enterprise-wide risk management program (ERM) - ANSImplemented at the corporate level and
manages all of an organization's key risks and opportunities with the intent of maximizing the
organization's value.
Elements of a Contract - ANSLegal purpose, consideration and agreement
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