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FIRST SEMERSTER EXAMINATIONS-2017/2018

SCHOOL OF PHYSICAL AND MATHEMATICAL SCIENCES

ST ATISTICS DEPARTMENT

ACTU 403: ELEMENTS OF LIFE INSURANCE

TIME: 2 AND BALlI HOURS

INSTRUCTIONS: ANSWER THE TWO QUESTIONS IN SECTION A, AND ANY

OTHER THREE QUESTIONS IN SECTION B.

SECTION A

(NB: ANSWER BOT II QUESTIONS IN TillS SECTION)

I. (i) Explain the following characteristics as they apply to insurance:

(a) Pooling of losses

(b) Risk transfer

(c) Indemnification

(ii) What are the requirements that a risk must meet in order to be considered insurable.

(20 marks)

2. (i) What are Social Insurance Schemes? Give examples of such Schemes, and explain what
they offer.

(ii) How does Social Insurance Schemes differ from Private Insurance programmes?

(20 marks)

Mr. E. Amartey- Vondee Page 1 of 2

 SECTION B
(

(NB: ANSWER ANY THREE QUESTIONS IN THIS SECTION)

3. (i) In what respect is life insurance different from other forms of insurance?

(ii) Describe the following forms of insurance:

(a) Universal life insurance
(b) Pure Endowment
(c) Whole life insurance (20 marks)
4. (i) Define Reinsurance. and explain the difference between Facultative and Treaty
Reinsurance arrangements.

(ii) State and explain the five primary functions of reinsurance.

(20 marks)

5. (i) What are the reasons for the regulation of life insurance companies?

(ii) State and describe the principal areas of a life insurance company's operations that are
regulated.

(20 marks)

6. (i) Differentiate between Pure and Speculative Risks, and explain why these differences
are irnportant to insurers.

(ii) State and explain the steps involved in a risk management process.

(20 marks)

7. (i) What relevant issues are considered in the construction of an investment portfolio for
life insurance funds?

(iii) In a Life Insurance Fund Investment Policy, what are the typical specifications in the
Rules that are contained in the Investment Policy?

(20 marks)

Mr. E. Amartey-Vondee Page 2 of 2