MODEL TEST 1 (A) Loss Prevention, Loss damage

Time : 1 hour (B) Loss Control, Loss management

Marks : 1 mark each
1. The emergence of which of the following necessitates
insurance as a form of security?
(A) Joint family system
(B) Nuclear family system
(C) Both the above (D) None of the above
2. Which was the first Act to regulate life insurance
industry in India?
(A) Insurance Act, 1938
(B) Life Insurance Companies Act, 1912
(C) IRDA Act, 1999 (D) LIC Act, 1956
3. Government of India transacts life insurance
business in India through which of the following:
(A) LIC of India (B) GIC of India
(C) Postal Life Insurance (D) All the above.
4. Which of the following entity is exempt from the
purview of the IRDA?
(A) LIC of India (B) GIC of India
(C) Postal Life Insurance (D) None.
5. The losses of a few are shared amongst many through
the mechanism of –
(A) Nuclear family (B) Insurance
(C) Government (D) All the above
6. …….. consists of collecting premiums from numerous
individuals to compensate the few who may suffer
losses.
(A) Pooling (B) Contract
(C) Guarantee (D) IRDA
7. Which of the following is correct?
Statement A – Insurance reduces burdens
Statement B – Insurance is a system of mutual
support.
Statement C – Insurance the only method to
manage risks.
(A) A is correct (B) B is correct
(C) A, B & C correct (D) A & B correct.
8. Which of the following can easily be compensated
thro’ insurance?
A. Primary burden of risk
B. Secondary burden of risk
C. Both D. None
9. Secondary burden of risk consists of …….. and ……
one has to bear if exposed to loss situation.
(A) Trials, tribulations (B) Costs, Strains
(C) Situations, Safeguards
(D) Circumstances, Conflicts
10. Which are the methods to manage risks?
(A) Risk Avoidance (B) Risk Retention
(C) Risk Reduction (D) All the above
11. …… and …….. refer to measures to reduce chance of
occurrence and measures to reduce degree of losses.
(C) Loss advantage, Loss prevention
(D) Loss Prevention, Loss Reduction
12. Risk reduction and control involves steps like –
(A) Education and training
(B) Making environmental changes
(C) Spreading out items to various locations
(D) All the above
13. Risk Financing includes -
(A) Risk Retention (B) Risk Transfer
(C) A & B correct (D) Both A & B wrong
14. Risk Retention means –
(A) Insuring with an insurance company
(B) Insuring with another individual
(C) Insuring with the owner of the company
(D) Self-insurance
15. Risk Transfer means –
(A) Insuring with an insurance company
(B) Insuring with another individual
(C) Insuring with the owner of the company
(D) Risk retention
16. Insurance refers to protection against an event that
…… happen whereas Assurance refers to protection
against an event that …. happen.
(A) may, may not (B) might, will
(C) must, need not (D) will, will not
17. Cost of the risk is product of which of the following 2
factors:
(A) Insurance and Assurance
(B) Happenings and result
(C) Cause and effect
(D) Probability and impact
18. Cost of the risk would ….. with the probability and
amount of loss
(A) Increase (B) Decrease
(C) Vary (D) None of the above
19. Considering insuring an ordinary ball pen is an
example of –
(A) Don’t risk more than you can afford to lose
(B) Don’t risk a lot for a little
(C) Both are correct (D) Both are wrong
20. Considering insuring an oil refinery is example of
(A) Don’t risk more than you can afford to lose
(B) Don’t risk a lot for a little
(C) Both are correct (D) Both are wrong
21. Which of the following is correct?
Statement A. The system of insurance benefits
individual, family and the society
Statement B. Insurance companies could invest in
speculative ventures.
(A) A is correct (B) B is correct
(C) Both A and B correct (D) A & B wrong