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PE1-003 - Insurance - Pensions MGT
PE1-003 - Insurance - Pensions MGT
CHARTERED INSTITUTE OF
PERSONNEL MANAGEMENT OF NIGERIA
PROFESSIONAL EXAMINATIONS
FEBRUARY 2019
SECTION A
(A) Risk
(B) Uncertainty
(C) Loss
(D) Peril
4. An Insurance company will only provide cover for one of the following risks:
5. An Insurance company set up primarily to underwrite the risks of its parent company is
called:
6. The principle that enables the insurer to stand in the place of the insured and avail
himself of all the rights and remedies of the insured is called:
(A) Contribution
(B) Indemnity
(C) Subrogation
(D) Proximate Cause
10. An Employers Liability Insurance Policy provides cover for the following except:
11. The act of an insurer transferring risk to another insurance company is referred to as:
12. A regular payment given to someone who is no longer working, having put in the
maximum number of years of service is known as:
(A) Annuity
(B) Pension
(C) Contribution
(D) Benefit
13. The type of hazard involving leaving the car key in an unlocked car is an example of:
(A) Physical
(B) Moral
(C) Morale
(D) Legal
(A) Avoidance
(B) Reduction
(C) Control
(D) Financing
16. The duty of disclosure as required under the principle of utmost good faith is expected
from one of the following:
19. According to the Pension Reform Act 2014, the monthly contribution to an employee’s
retirement savings account by both employer and employee will
be…and…respectively:
20. An employer remits the total contributions in respect of an employee’s pension directly
to:
SECTION B
Attempt any four complete questions of your choice from this section.
QUESTION 2
(a) Outline four reasons for setting up a captive insurance company. [6 marks]
(b) As a way of reducing the total cost of managing risk in your organization, the
management is planning to establish a captive insurance company. During the
meeting to take decision on the most suitable type of captive insurance company for
your firm, you are required as an insurance expert to mention and describe any six
forms of captive insurance company suitable for your organization to adopt.
[9 marks]
[Total = 15 marks]
QUESTION 3
You are the Human Resource Manager of ABC Nigeria Limited. There was an accident on
the factory floor leading to serious injuries to one of the employees. He was rushed to the
hospital and after staying for up to 13 months he was confirmed physically and permanently
disabled. He would need to use a wheel chair for the rest of his life. As at the time of this
unfortunate incident his remuneration details were as below:
[Total = 15 marks]
QUESTION 4
The Insurance fundamental principle of Utmost Good Faith is based on disclosure of material
facts and representations by both the proposer and the Insurer during the formation of the
contract.
(a) What are Utmost Good Faith, material facts and representations? [6 marks]
(b) How has the principle been modified by Nigeria Law [4 marks]
(c) What are the facts that need not be disclosed by the proposer? [5 marks]
[Total = 15 marks]
QUESTION 5
The major reason for putting an insurance policy or cover in place is for the policyholder or
the insured to get paid by the insurer when a loss, damage, destruction or liability crystalizes.
As a Human Resources Management Practitioner, provide six circumstance under which the
payment from the insurer for a lost would be lower than the sum insured or limit of liability.
[15 marks]
QUESTION 6
An Insurance policy is the evidence of the contract between an insured or policyholder and
the insurer.
(a) List out any five of the sections of this document. [7½ marks]
(b) Briefly explain the five sections mentioned above. [7½ marks]
[Total = 15 marks]
QUESTION 7
Ten of the employees of your company were sent to a 14 day intensive training in the
Republic of South Africa. Unfortunately one of them had her baggage containing personal
effects and money stolen on arrival; two of them fell ill on the second day of arrival while
another one got her arm fractured due to a fall on the staircase on the third day. Both the sick
and injured employees were hospialized and could not come back to the country on the 14th
day when their Visas expired. The company expended the sum of N20m (Twenty Million
Naira) to sort out these issues which your mangement felt could have been recovered under
an insurance policy.
As the Human Resource Manager, you are to advice on:
(a) The type of insurance policy suitable for these circumstances. [3 marks]
(b) Any six benefits covered by the policy. [12 marks]
[Total = 15 marks]