GFML3043_ CONFIDENTIAL UUM Universiti Utara Malaysia FINAL EXAMINATION | SECOND SEMESTER SESSION 2015/2016 COURSE CODE/NAME : GFML3043 / CARGO INSURANCE | DATE 1 30 JUNE 2016 (THURSDAY) TIME + 9,00 AM — 11.30 AM (2 HOURS 30 MINUTES) VENUE : DSB K.TIWD INSTRUCTIONS: the cover page 2. You are required to answer ALL questions using the answer sheet provided. MATRIC NO. =. (in words ) IDENTIFICATION CARD NO. LECTURER NAME = TABLE NO.: DO NOT OPEN THIS EXAMINATION PAPER UNTIL INSTRUCTEDGFML 3043 Cargo Insurance QUESTION 4 Explain the importance of risk management and cargo insurance in international business. (10 marks) QUESTION 2 Describe TWO (2) differences between Exclusion Clause and Limitation Clause in the Institute of Cargo Clauses (A) together with ONE (1) example. (40 marks) QUESTION 3 Based on Institute of Cargo Clause (A) or All Risk Policy 2009, please answer the following questions: (a) Describe the concept of collision and select ONE (1) case study to explain the rules of thumb and the result of the selected case. (8 marks) (b) Based on your understanding on the cargo insurance market and practice in in Malaysia, explain why most of the shippers prefer to choose All Risks Policy as compared to other policies? (8 marks) QUESTION 4 Referring to Transit Clause in ICC 2009, analyze THREE (3) conditions that could lead to the termination of insurance contract. (9 marks) QUESTION 5 Explain TWO (2) reasons why most of the assured prefer to use open cover policy instead of single shipment. (10 marks)QUESTION 6 Al Fateh Distributor is a supplier of frozen meat products, which is based in Wellington, New Zealand. Their market covers most of the South Sea Asia countries, including Malaysia. One of its biggest clients is TESCO Penang Sdn. Bhd. located in Bayan Lepas Industrial Zone. Based on this scenario, discuss THREE (3) underwriting factors that influence the underwriter’s judgement of the premium rate. (15 marks) QUESTION 7 A shipment of brown rice from Mumbai to Qatar has an invoice value of USD250,000, including cost of freight USD3,000. ICC (A) rate is 0.3%, IWC and ISC rate is 0.033% while overage loading is 0.15%. Calculate the amount of total premium based on given conditions. (5 marks) QUESTION 8 Explain the concept of piracy based on the United Nation Law of the Sea (UNCLOS) and describe FIVE (5) counter measures taken by the littoral states to combat the piracy at Straits of Malacca (20 marks)QUESTION 9 Please answer the question based on the following conditions: Total value of shipment over the period of 12 month: RM6,000,000. Total value of loss over that period: RM30,000. Additional loading expenses for this shipment include: Commission agents 210% Management expenses: 25% Contingency losses 24% Profit margin 16% (a) Pure premium rate (2 marks) (a) Actual premium rate (3 marks) END OF QUESTION