AINS 101 EXAM STUDY GUIDE AND PRACTICE EXAM 2024 2025 ACCURATE REAL EXAM QUESTIONS WITH VERIFIED ANSWERS EXPERT VERIFIED FOR A GUARANTEED PASS LATEST UPDATE The two main sectors of the insurance industry are Property casualty insurance and life health insurance 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 Contract of utmost good faith Earned premiums are shown on an insurer s income statement because they are Revenues Destructive competition in the insurance industry could result in Insurance Shortages 3 multiple choice options 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 Insured and claimant and claims representative Which one of these is most directly associated with a satisfied customer Leads and referrals that can be used to generate new business 3 multiple choice options When conducting an advance audit which of these tasks are performed to assist underwriting Classify the various exposures 3 multiple choice options Because the insurance company usually determines policy wording and the insured has little choice but to take it or leave it an insurance contract is a Contract of adhesion Smart products used to perform repetitive tasks Robots 3 multiple choice options What is the correct order for these steps in the claims process Calculating a loss reserve preparing a loss statement identifying the policy determining the cause of loss Identifying the policy calculating a loss reserve determining the cause of loss preparing a loss statement What is another name for a field underwriter Line Underwriter Someone has the following duties evaluate applicants that producers submit present policy quotations process policy endorsements help explain coverages make coverage recommendations What is their role Field Line Underwriter In personal property casualty insurance which is more common manuscript forms or pre printed policies Pre printed policies Which statement is true A policy begins with a coverage overview then goes into more coverage details 3 multiple choice options Which of these is an example of general damages Compensation for disfigurement 3 multiple choice options What are the four quadrants of risk Hazard Operational Financial Strategic What is a Hazard Risk A risk that arises from property liability or personnel loss exposures What is an operational risk A risk that arises from people or a failure in processes systems or controls including those involving information technology What is a financial risk A risk that arises from the effect of market forces on financial assets or liabilities including market risk credit risk liquidity risk and price risk What is strategic risk A risk that arises from trends in the economy and society including changes in the economic political and competitive environments What is Pure Risk A category of risk that cannot be controlled and only has 2 outcomes complete loss or no loss What type of risk has no change for gain or profit Pure Risk 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 Monitor the underwriting decision 3 multiple choice options What is the difference between an independent agency and an exclusive agency An exclusive agency is contracted to sell insurance for one insurer or group of insurers The processing of almost every claim involves which one of the following activities Determining the amount of damages or extent of loss 3 multiple choice options 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 Maintaining insurer solvency 3 multiple choice options What type of personal property casualty insurance policy protects someone with high potential for large liability losses Personal umbrella Why are insurance regulators concerned about the effects of large catastrophes Insurers may become insolvent What is insurer solvency The ability to meet the obligations when it comes to making payments on claims for insurance policies What is a stock insurer a corporation owned by stockholders with the objective of making a profit for them What is a mutual insurance company A corporation owned exclusively by the policyholders with the objective of providing insurance for its members In which type of insurer is each member both an insured and insurer Reciprocal Insurance Exchange What insurer provides coverages unavailable in the standard market Surplus lines 3 multiple choice options What are the five main provisions in an insurance policy Declarations Definitions Insuring Agreement Policy Conditions Policy Exclusions Which of these activities is not performed by a customer service representative Determining coverage quotes 3 multiple choice options What are the six characteristics of an ideally insurable loss exposure Fortuitous Definite and Measurable Pure Risk Independent and not Catastrophic One of a large number of similar exposure units Affordable What does fortuitous mean The insured has no control over whether or when the loss will occur What is the cost of risk The total cost of all aspects of the organization that relate to managing risk Riley Turner is performing a comprehensive evaluation of Hardwick Enterprises to make sure its insurance and risk management efforts are serving the organization appropriately Which one of the following will be true in regard to this effort Besides risk management goals being attainable they should also pose a challenge 3 multiple choice options