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Risk and Insurance 2

Risk and Insurance 2

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Published by amrut85

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Published by: amrut85 on Jul 15, 2010
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02/11/2013

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Risk and Insurance 1
Risk Management & Insurance Planning
1. Composite Insurance Agent Holds a license To act as an Insurance agent for a
a. Life Insurer b. General Insurer c. Both of the above.d. None of the Above.
Solution: c
A composite agent is one who is authorized to sell both Life & General insurance products.
2. In property insurance (not in marine insurance) insurable interest must exist at the time of 
a. Lossb. Contractc. Both a & bd. None of the above
Solution: c
In property insurance one needs to have insurable interest both at the time of contract and loss.
 
Exception is Marineinsurance were in one needs to have insurable interest only at the time of Loss. Further in Life insurance one needs tohave insurable interest only at the time of contract.
3. Gambling is an example of 
a. Pure risk.b. Speculative riskc. Personal riskd. Property risk
Solution: b4. Which of the following is the third step in identifying risks
a. Identify risksb. Develop Alternative for handling risksc. Choose and implement an appropriate Strategy.d. Analyze and evaluate risks (Risk Measurements)
Solution: b5. Pure risk can be defined as a situation where
a. there is a chance of loss or no lossb. There is a chance of a loss or a profitc. There is a no chance of lossd. All of the above.
Solution: a6. An organization cannot finance its own risk cost (risk financing )
a. Payment out of current expensesb. By debt or equity financingc. By pre or post credit.d. By approaching a reinsurance company.
Solution: d7. _______________ is the right of one person, having indemnified another under a legal obligation to do so, tostand in the place of that other and avail himself of all the right and remedies of that other, whether alreadyenforced or not.
a. Substitution.b. Indemnityc. Adhesiond. Subrogation.
Solution: d8. Touching another person unlawfully is an example of 
a. Intentional Tort.b. Absolute liability.c. Negligence.d. Conclusive tort.
Solution: a
Tort is civil wrong doing, which could be divided in to 3 types (1) Intentional, (2) Absolute and Strict liability and (3)Negligence.
9. Pricing of a product in an Life insurance company is a function of 
a. Marketingb. Underwritingc. Actuariald. Finance
Solution: c10. Collection and payments of monies in an Life insurance company is a function of 
a. Marketingb. Actuarial
 
c. Financed. Legal and secretarial
Solution: c
11. Auditing in an Life insurance company is a function of a. Underwritingb. Actuarialc. Financed. Legal and secretarial
 Solution: c
12. Compliance to regulator and other public supervisory bodies in an Life insurance company is a function of a. Underwritingb. Actuarialc. Financed. Legal and secretarial
Solution: d
13. The amount of insurance accepted by the re-insurer is known asa. Premiumb. Net premiumc. Cession.d. Retention.
Solution: c
14. Which policy meets the need of “security for children’s education” the besta. Term assurance planb. Children deferred assurance planc. Deferred annuity pland. Health insurance.
Solution: b
15. Re-insurance Advisory committee consist of ____________ personsa. Fiveb. Four c. Sixd. Ten
Solution: a
16. Insurer has a period of within _________ days of all reports received to decide about the claim.a. 30 daysb. 45 daysc. 60 daysd. 90 days
Solution: a
17. For any applicant to be registered as an IRDA licensed agent, the minimum qualification required in an urban area isa. X th standardb. XII th standardc. Graduation.d. Post-Graduation.
Solution: b
8. Employees liability for his employee’s injury even when there is no negligence on the part of the employer is anexample of a. Intentional Tort.b. Absolute liability.c. Negligence.d. Conclusive tort.
Solution: b
In case of strict liability certain defenses are allowed but not so in Absolute liability.19. Investigation regarding mortality factor in an Life insurance company is a function of a. Marketingb. Underwritingc. Actuariald. Legal and secretarial
Solution: c
20. The limit of indemnity for a Direct Broker isA] Three times remuneration received at the end of every financial year subject to a minimum limit of rupees fifty lakhs.B] Three times remuneration received at the end of every financial year subject to a minimum limit of rupees Two croresand fifty lakhs.C]Three times remuneration received at the end of every financial year subject to a minimum limit of rupees Five crores.D]Three times remuneration received at the end of every financial year subject to a minimum limit of rupees Ten crores.
Solution: a
Professional Indemnity requirement as per IRDA norms :
 
Direct broker - 3 times of remuneration in PY subject to Min- 50 lakhsReinsurance - 3 times of remuneration in PY subject to Min- 2.5 cr.Composite -3 times of remuneration subject to with min 5 cr.20. An ultimate mortality table excludes data for . first 5 to 15 years. first 3 to 5 years. first 3 to 6 years. first 7 to 15 years
Solution: a
20. The cheapest policy in the market is. A term policy. A unit linked policy. An endowment policy. A Whole life policy
Solution: a
20. Participating polices are policies entitled to. risk sharing. premium. bonus. fixed payments
Solution: c
20. An increasing term insurance means. The term insurance sum assured increases with inflation. Both the premium and sum assured increases. The term insurance increases at intervals. Only the premium keeps on increasing.
Solution:c
20. Overseas mediclaim policy does not cover one of the following :. Loss of passort. Loss of baggage. Medical accidents. Personal accident.
Solution: b
It is loss of checked in baggage which is covered.20. ________________ insurance is a Tariff Product. life. motor . health. marine
Solution: b
Now only Third party is tariffed and not motor.20. The process of due diligence conducted by an insurance agent is known as. Underwriting. Investigation. Inspection. Site Check.
Solution: a
20. This type of insurance is not easily available in India. Officers liability. Disability Income Protection.. Health. Life
Solution: b
20. Insurance Advisors and Agents are governed by. IRDA. SEBI. AMFI. Both IRDA & SEBI.
Solution: a
20. Mortality rate is. Rate of death in a group.. Rate of death in the population.. Probability of death in a group. Probability that the insured will die before reaching a certain age
.Solution: d
20. HLV explains in general. Total income of an individual

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