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CONFIDENTIAL

BM/OCT 2009/INS200

UNIVERSITI TEKNOLOGI MARA


FINAL EXAMINATION

COURSE

RISK AND INSURANCE

COURSE CODE

INS200

EXAMINATION

OCTOBER 2009

TIME

3 HOURS

INSTRUCTIONS TO CANDIDATES
1.

This question paper consists of two (2) parts :

2.

Answer ALL questions from PART A and answer any two (2) questions from PART B in the
Answer Booklet. Start each answer on a new page.

3.

Do not bring any material into the examination room unless permission is given by the
invigilator.

4.

Please check to make sure that this examination pack consists of:
i)
ii)

PART A (6 Questions)
PART B (4 Questions)

the Question Paper


an Answer Booklet - provided by the Faculty

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO


This examination paper consists of 4 printed pages
Hak Cipta Universiti Teknologi MARA

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BM/OCT 2009/INS200

PART A

QUESTION 1
Define risk and briefly explain three (3) major types of loss associated with the damage of
property.
(10 marks)

QUESTION 2
State five (5) reasons why Bank Negara of Malaysia (BNM) should regulate the insurance
industry.
(10 marks)

QUESTION 3
a)

Define the term "utmost good faith".


(2 marks)

b)

Briefly explain the concept of Law of Large Numbers.


(2 marks)

c)

Explain any three (3) of characteristics of insurable risks.


(6 marks)

QUESTION 4
Write notes on the following forms of reinsurance :
a)

facultative reinsurance
(5 marks)

b)

treaty reinsurance.
(5 marks)

QUESTION 5
Fifidina owns a bungalow and insure her bungalow with insurer X for RM550.000 and insurer
Y for RM400.000. Fire caused a loss of RM400,000 to the bungalow. Calculate how much
each insurer has to pay for the loss.
(10 marks)

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BM/OCT 2009/INS200

QUESTION 6
a)

Differentiate between peril and hazard. Provide an example of each.


(4 marks)

b)

Distinguish between "subject matter of insurance" and "subject matter of contract".


Provide an example of each.
(6 marks)

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BM/OCT 2009/INS200

PARTB

QUESTION 1
a)

Discuss what are the four (4) methods which insurance company can use in
providing indemnity to the insured?
(8 marks)

b)

Define contract and briefly explain essential elements of an insurance contract.


(12 marks)

QUESTION 2
a)

Define risk management.


(5 marks)

b)

Describe the risk management process.


(15 marks)

QUESTION 3
a)

What are the four (4) main factors that can influence individuals in their perceptions
between real and perceived risk?
(10 marks)

b)

Using appropriate example, clarify what are the four (4) questions with which hazard
and operability studies (HAZOPS) are concerned?
(10 marks)

QUESTION 4
a)

Describe the structure of a scheduled policy form.


(8 marks)

b)

State four (4) components of premium and explain the purpose of each component.
(12 marks)

END OF QUESTION PAPER

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