AINS 101 simulated exam questions and revised correct answers
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Course
Ains
Institution
Ains
Exclusive agency is contracted to sell insurance for one insurer or group of insurers - correct answer The difference between an independent agency and an exclusive agency is that an
Insurance shortages - correct answer Destructive competition in the insurance industry could result in
Veronic...
Exclusive agency is contracted to sell insurance for one insurer or group of insurers - correct answer The
difference between an independent agency and an exclusive agency is that an
Insurance shortages - correct answer Destructive competition in the insurance industry could result in
Veronica directly contacts Maria for guidance on how to report a stolen car, Maria provides that, and
claims rep Sean takes over after an introduction from Maria - correct answer Maria is a new producer
who wears many hats when forming relationships and then serving her established customers. In this
capacity, which one of the following scenarios most accurately describes her ongoing work wearing the
hat of "claims handler"?
$350 Replacement cost - Depreciation - correct answer John's two-year-old bicycle was stolen. The
bicycle's purchase price was $700, its current replacement cost is $800, and depreciation was estimated
at $450. What was the bicycle's actual cash value?
Underwriting authority reports - correct answer All of the following are sources of underwriting
information to evaluate an insurance submission, EXCEPT:
Implemented risk management techniques may prove to be ineffective or become obsolete - correct
answer Which one of the following best explains why producers should be alert to changes in clients'
loss exposures?
Field Underwriter - correct answer James works very closely with producers on a daily basis. In addition
to evaluating the applicants that the producers submit, James is involved in presenting policy quotations,
processing policy endorsements, helping to explain coverages, and making coverage recommendations.
James works as a
Balance sheet - correct answer Rachel is considering investing in the stock of an insurance company.
Which one of the following is likely to provide the best indication of the insurer's financial position at this
point in time?
, AINS 101 simulated exam
Support producers and insureds - correct answer At Greenfield Insurance Company, Bernadette and
Rachel are corporate underwriters, and Tomas and Jose are field underwriters. All of the following are
underwriting activities typically performed by corporate (or staff) underwriters like Bernadette and
Rachel, EXCEPT:
Large number of similar exposure units - correct answer Oscar's custom-built vehicle looks like a sausage
sandwich on wheels. He plans to drive it to special events at schools around the country where it will
serve as a mobile billboard to promote his product. Oscar is surprised to learn that insurers are reluctant
to insure his vehicle because it fails to meet one of the ideal characteristics of an insurable risk. Which
characteristic is Oscar's vehicle least likely to meet?
Capacity - correct answer 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?
Mutual insurer - correct answer 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?
Transfer - correct answer When the Smiths purchased their first home, they were required to purchase a
homeowners insurance policy in order to get a mortgage. Because they did not have a lot of extra money
in their budget, they wanted to buy as little insurance coverage as possible. The Smiths' insurance agent
advised them that if they purchase an insurance policy that adequately covers damage to their home
and personal property, they only have to budget for the insurance premium, rather than the full cost of
rebuilding the house and replacing its contents. Which one of the following key components of insurance
is the insurance agent explaining to the Smiths?
Providing laboratory analyses - correct answer Risk control can assist the claims department by
Loss ratio + expense ratio - correct answer Which one of the following is the correct formula for
calculating an insurer's combined ratio?
Property-casualty insurance and life-health insurance - correct answer The two main sectors of the
insurance industry are
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