AINS 101 EXAM ACTAUL EXAM WITH
COMPLETE QUESTIONS AND 100%
VERIFIED SOLUTIONS 2024/2025, EXAMS
OF BUSINESS ADMINISTRATION
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 $
10,000
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
,Earned premiums are the portion of written premiums that Correct
Answer Apply to the part of the policy period that has already
occurred.
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 salesperson interactions. Which one of the
,following is likely the best distribution channel to meet Erin's
needs? Correct Answer Direct response
direct response distribution channel Correct Answer using social
media, email blasts, website ads, and direct mail would be the
best
Risk control can assist the claims department by Correct Answer
Providing laboratory analyses.
All of the following are sources of underwriting information to
evaluate an insurance submission, EXCEPT: Correct Answer
Underwriting authority reports
Allian Insurance Company is a growing regional insurer selling
policies in three states, specializing in personal 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 good. Which one of the following types of insurer is the
right fit for Joe? Correct Answer Mutual insurer
Mutual insurer Correct Answer owned by its policyholders and
formed as a corporation for the purpose of providing insurance to
them. To share profits, mutual insurers may pay dividends to
policyholders as a return of a portion of premiums paid.
Michael is a commercial lines underwriter. He received a risk
control report on a new business that he had recently written with
Laura, one of his producers. After reviewing the report, Michael
contacted Laura to let her know that they needed to process a
policy change request adding a new classification and some
exposures to the general liability policy. These activities are
occurring during which one of the following steps of the
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
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