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.
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
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.
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