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AINS 101 | 112 Question with 100 % correct answers | Verified

HEAL100 Health Care — exam and revision material · Other

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Health Care exam material, 23 pages. Originally published on StudyMerit.

Pages
23
Academic year
2025/2026
Language
English

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AIN S 101 Practice questions an d 100% Verified Correct Answers L ate st Update 2024 - 2025 Guaranteed A+ 1. As a single mother on a very tight budget, Ciara is tempted to skimp on her insurance. However, her friend Mehmet tells her not to skimp on insurance, because it will help manage her cash flows. Which one of the following examples best illustrates Mehmet's point? a. When her car's windshield breaks, Ciara has to pay only $100 of the $600 cost of replacing it 2. 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 Shelton Industries' commercial property - casualty policies would pay for the employees' injuries and illnesses? a. Workers compensation insurance 3. 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. Commercial crime insurance 4. All of the following are types of private insurers, EXCEPT: a. State workers compensation funds 5. The state of Maryland operates a residual auto plan (the Maryland Auto Insurance Fund — MAIF) that provides coverage for drivers who are unable to obtain coverage from private insurers. Which one of the following is the best rationale for the MAIF program? a. Auto insurance is compulsory, and the program makes it possible for all drivers to have reasonably priced insurance 6. ABC Company experienced a dramatic ideological shift in corporate policies after a national election. This is an example of which one of the following quadrants of risk? a. Strategic risk 7. Carlos is new to the insurance business and is learning about insurance regulation and what he, now working with Grady Insurance, will need to be aware of regarding the subject of compliance. Which one of the following will Carlos find is accurate as he be tter understands why insurance is regulated? a. Insurance regulation protects customers by guaranteeing insurance is available and accessible to everyone who needs it . 8. What term refers to the ability of an insurer to meet its obligations as they become due?

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a. Solvency 9. One of the reasons for insurance regulation is to prevent destructive competition. In which one of the following scenarios would destructive competition be exhibited? a. East Insurance comes up with a new rate structure allowing "preferred customers" discounted policies when they continually renew year after year; East eventually loses needed revenue but is rewarded by its competitors leaving the market 10. All of the following are categories of liabilities found on an insurer's balance sheet, EXCEPT: a. Policyholders' surplus 11. Which one of the following is part of written premiums? a. Unearned premiums 12. An insurer's balance sheet can best be described as a . 13. The financial report for Hometown Insurer contains the following information: a. Earned premiums $4,000,000 Written premiums $5,000,000 Net investment income $1,000,000 Incurred Losses $3,000,000 Incurred underwriting expense $2,000,000 What is Hometown Insurer's expense ratio? b. 40% 14. The financial report for LMN Insurance contains the following information: Earned premiums $8,000,000 Written premiums $10,000,000 Incurred losses $6,000,000 Incurred underwriting expenses $4,000,000 What is LMN Insurance's expense ratio? a. 40% Expense Ratio = Incurred underwriting expenses ÷ Written premiums: $4 million ÷ $10 million = .40 (40%) 15. Spencer Insurance Associates is an independent agency selling primarily homeowners policies. This agency a. Is free to work with as many different insurers as it wants. 16. As it continues to grow, Anchoy Insurance is examining other distribution channels to more effectively market its products. Through this experience, which of one the following will Anchoy most likely learn? a. Anchoy can use group marketing to target large numbers of recent local college graduates. a. Snapshot of its financial position

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17. The key to the direct writer marketing system is that a. The insurer is using its own employees as producers. 18. Insuring individuals with a high probability of loss at a cost lower than the insurer would normally charge for that risk because it wasn't aware of the actual risk involved is known as a. Adverse selection. 19. Clare is a commercial lines underwriter. She always tries to follow underwriting guidelines, effectively evaluate loss exposures, and charge adequate premiums. By doing these things, Clare's goal is to ensure a. Adequate policyholders' surplus. 20. Which one of the following statements is correct regarding the interaction between risk control and other insurer functions? a. A risk control evaluation can make the difference between the applicant's being rejected or accepted by the underwriter. 21. Which one of the following statements is correct regarding the interaction between risk control and other insurer functions? Risk control personnel can assist underwriters in modifying a new applicants loss exposures to meet eligibility requirements. 22. Tony now works at the corporate level for Newtown Insurance. He is considered a staff underwriter. Which one of the following is primarily a responsibility of staff underwriters? a. Revise underwriting guidelines 23. Aimee recently accepted a job in the Underwriting department at Noble Insurance Company. Her responsibilities will include developing coverage forms, arranging reinsurance agreements, and conducting underwriting audits. Which one of the following is the ti tle of Aimee's new job? a. Corporate underwriter sometimes referred to as staff underwriters, perform duties including: developing coverage forms, arranging reinsurance, conducting underwriting audits, researching the market, and revising underwriting guidelines . 24. Anna was reviewing an all - lines submission for SP Markets. SP Markets owns and operates 5 small grocery stores located in the suburbs of Boston. The stores all seem to be well maintained and clean. While the overall loss experience on the account is good r elative to the indicated premium, the loss runs show a frequency of small general liability claims from customer slips and falls. Rather that reject the application for SP Markets, Anna would like to make suggest a modification to the producer that could m ake the application acceptable and possibly add value for the insured. Which one of the following is a good modification for Anna to suggest? –

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