diff --git a/coder_sniffer/Drupal/Sniffs/NamingConventions/ValidFunctionNameSniff.php b/coder_sniffer/Drupal/Sniffs/NamingConventions/ValidFunctionNameSniff.php
index 8392215..2f3aa75 100644
--- a/coder_sniffer/Drupal/Sniffs/NamingConventions/ValidFunctionNameSniff.php
+++ b/coder_sniffer/Drupal/Sniffs/NamingConventions/ValidFunctionNameSniff.php
@@ -98,6 +98,13 @@ class Drupal_Sniffs_NamingConventions_ValidFunctionNameSniff extends Generic_Sni
             return;
         }
 
+        $isApiFile = substr($phpcsFile->getFilename(), -8) === '.api.php';
+        $isHookExample = substr($functionName, 0, 5) === 'hook_';
+        if ($isApiFile && $isHookExample) {
+            // Ignore hook_ENTITY_TYPE_insert() functions in .api.php files.
+            return;
+        }
+
         if ($functionName !== strtolower($functionName)) {
             $expected = strtolower(preg_replace('/([^_])([A-Z])/', '$1_$2', $functionName));
             $error    = 'Invalid function name, expected %s but found %s';
diff --git a/coder_sniffer/Drupal/Test/good/good.api.php b/coder_sniffer/Drupal/Test/good/good.api.php
index 5a616e8..765434b 100644
--- a/coder_sniffer/Drupal/Test/good/good.api.php
+++ b/coder_sniffer/Drupal/Test/good/good.api.php
@@ -124,5 +124,20 @@ function hook_locale_translation_projects_alter(array &$projects) {
 }
 
 /**
+ * Act on entities of a specific type when loaded.
+ *
+ * @param array $entities
+ *   The entities keyed by entity ID.
+ *
+ * @ingroup entity_crud
+ * @see hook_entity_load()
+ */
+function hook_ENTITY_TYPE_load($entities) {
+  foreach ($entities as $entity) {
+    $entity->foo = mymodule_add_something($entity);
+  }
+}
+
+/**
  * @} End of "addtogroup hooks".
  */