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AINS 101 EXAM 2024/2025
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AINS 101 EXAM 2024/2025
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AINS 101 EXAM 2024/2025Uncertainty about outcomes that can be negative or positive?
A. Pooling
B. Risk
C. Loss Exposure
D. Transfer
B. Risk
As a single mother on a very tight budget, Ciara is tempted to skip on her
insurance. However, her friend Mehmet tells her not to skimp on insurance,
because it will help manager her cash flows. Which one of the following examples
best illustrates Mehmet's point?
A. Ciara finds it difficult to come up with a $787 auto insurance premium every six
months.
B. Ciara needs her car to get to her job to make car payments and pay for her car
insurance.
C. When her car's windshield breaks, Ciara only has to pay $100 of the $600 cost
of replacing it.
D. When her car's transmission goes out a month after the warranty expires, Ciara
is faced with a $1,100 repair bill.
C. When her car's windshield breaks, Ciara only has to pay $100 of the $600 cost
of replacing it.
Coverage for money and other business property from various causes of loss such
as burglary, robbery, theft, and employee dishonesty typically is provided by:
A. Ocean marine insurance
B. Professional liability insurance
,C. Inland marine insurance
D. Commercial crime insurance
D. Commercial crime insurance
Shelton industries experienced a fire in its manufacturing plant. Several employees
suffered burns and smoke inhalation injuries as they tried to escape the building.
Which one of their commercial property-casualty policies would pay for the
employees' injuries and illnesses?
A. Workers Compensation Insurance
B. Commercial general liability insurance
C. Commercial property insurance
D. Commercial umbrella insurance
A. Workers Compensation Insurance
A reinsurance company:
A. Assumes loss exposures from a primary insurer
B. Is formed to write all or part of the insurance for a parent company
C. Transfers losses to a primary insurer
D. Provides primary insurance for loss exposures that private insurers are
unwilling to provide
A. Assumes loss exposures from a primary insurer
The state of Maryland operates a residual auto plan (t he Maryland Auto Insurance
Fund - MAIF) that provides coverage for drivers who are unable to obtain
coverage from private insurers. Which of the following is the best rationale for the
MAIF program?
A. Private insurers face limited competition, and the state increases competitive
pressures by operating this type of plan.
B. Auto insurance is compulsory, and the program makes it possible for all drivers
to have reasonably priced insurance.
C. Auto insurance for high-risk drivers is profitable, and the program enables the
state to share in the profits.
,D. Private insurers overcharge for auto insurance, and the state provides a low-cost
alternative.
B. Auto insurance is compulsory, and the program makes it possible for all drivers
to have reasonably priced insurance.
In an effort to reduce expenses, increase profitability, and reduce human errors;
ABC Insurance Company decided to automate most of its personal lines
underwriting function. The company now uses standardized application forms that
are submitted electronically to one of the company's regional offices. At each
office, a computer with a scanner reads the apps. The computer has been
programmed with acceptable answers to the questions. If answers are all
acceptable, the policy is auto issued. Rejected apps are auto forwarded to an UW
who reviews them. The use of this tech has reduced company's expense ratio by
2.5%, and reduced the time it takes to issue a policy. ABC's use of computers to
eval apps electronically is:
A. Radiant sensors
B. Risk management info systems
C. Artificial Intelligence
D. Actuator Technology
C. Artificial Intelligence
Mutual Fund Company (MFC) offers a wide array of mutual fund options to
investors. Each mutual fund has a different fund objective and set of investment
guidelines that apply to the fund. While MFC gives considerable freedom to its
fund portfolio managers, they are are required to abide by the fund's investment
guidelines. To monitor compliance, MFC developed a computer algorithm. The
algorithm monitors each fund's compliance with investment guidelines. If a fund
manager violates the investment guidelines, the computer immediately notifies
MFC's internal control director, and corrective action is taken. MFC's use of the
computer algorithm to monitor investment compliance and to provide notification
when corrective action is necessary illustrates use of:
A. Mechanical sensors
B. Computer vision
C. Artificial Intelligence
, D. Transducer Technology
C. Artificial Intelligence
Which of the following best describes the concept of pooling?
A. Risk management is concerned with positive and negative risks
B. Insureds share the cost of each other's losses
C. Insurance benefits society as a whole
D. The financial consequences of unanticipated losses are transferred to an insurer
B. Insureds share the cost of each other's losses
Which of the following statements is correct regarding the benefits provided by
insurance?
A. Insurance helps reduce the financial burden to society by compensating accident
victims
B. The primary role of insurance is to meet mandatory insurance requirements
C. The reduction in losses paid by insurers due to risk control measures benefits
individuals insureds but not society as a whole
D. Insurance reduces the financial consequences of loss exposures but not the
related uncertainty.
A. Insurance helps reduce the financial burden to society by compensating accident
victims
A homeowners policy is a type of:
A. Life insurance policy
B. Personal umbrella policy
C. Personal property-casualty insurance policy
D. Commercial insurance policy
C. Personal property-casualty insurance policy
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):
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