PCE Part B- Set E 2000

PCE PART B - SET E

Sample Questions with Answers

1 Most insurance policies incorporate contribution clause. The reason for this is
____________.

A to prevent insured from indemnifying losses by claiming from insurance

company
B to prevent insured from receiving more than the actual loss by purchasing
several insurance policies covering the same risks
C to prevent insured from exercising the right to
subrogate
D to ensure the insured contribute to the loss C9

2 Mr Tan has 2 Personal Accident policies with a sum insured of RM100,000 each. He
passed away due to accident. What would be the amount payable to his family under
those policies?

A RM100,000
B RM200,000
C Nil
D RM50,000
C9

3 For certain types of insurance, premium adjustment is made at the end of policy
duration. If the actual premium is different from temporary premium, ___________.

A insurer shall collect cash immediately

B the additional premium will be collected or refund of premium will be made
depending on the situation
C insurer shall provide additional discount to insured
D insurer shall insist payment be made in bank draft C9

4 General Insurance contract is a _______________.

A long term contract

B middle term contract
C short term contract
D None of the above
C9

5 The objective for General Insurance is to place ________________.

A the insured in the same financial status as he had enjoyed before the loss
B the insured in the same financial status as he had enjoyed after the loss
C the insured in a different financial status as he had enjoyed before the loss
D the insured in a different financial status as he had enjoyed after the loss
C9

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 PCE Part B- Set E 2000

6 With regards to Money-In-Transit Insurance, premium adjustment refers to

_______________.

A premium amount which has been doubled

B premium which can be adjusted at any point of time
C premium which can be adjusted by insurer at the end of policy duration in
relation to the actual annual amount of money-in-transit
D premium which is subject to different rates C10

7 Which type of insurance policy has the subject matter of insurance such as the hull and
machinery, legal liability arising out of collision, the cargo and freight?

A Fire Insurance
B Marine Insurance
C Motor Insurance
D Liability Insurance C10

8 Types of Fire Insurance includes _______________.

I. Fire Policy
II. Houseowner’s Insurance
III. Householder’s Insurance
IV. Consequential loss Insurance

A I, II and III only

B I, III and IV only
C I, II, III and IV only
D I and II only
C10

9 A houseowner’s insurance policy is specially designed for those who wish to insure
their __________.

A houses, flats or land

B factory, houses or shopping mall
C office, apartments or shoplots
D houses, flats or apartments C10

10 Subject matter of insurance for Consequential loss insurance is ____________.

A buildings and contents

B private dwellings
C contents
D profit C10

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 PCE Part B- Set E 2000

11 The main types of cover available for motor vehicles are ____________.

I. Act only
II. Third party
III. Comprehensive
IV. Third party, Fire and Theft cover

A I, III and IV only

B III and IV only
C I, II, III and IV only
D III only C10

12 Which types of policy is not under Theft Insurance?

A Burglary Insurance
B All Risks Insurance
C Money Insurance
D Liability Insurance C10

13 The main forms of liability insurance are ____________.

I. Workmen’s Compensation Insurance

II. Employers’ Liability Insurance
III. Fire Insurance
IV. Motor Insurance

A I, II and III only

B II, III and IV only
C I and II only
D III and IV only C10

14 Which of the following policy is not Engineering Insurance?

A Boiler Explosion Policy

B Erection All Risks Policy
C Fire Policy
D Machinery Breakdown Policy C10

15 As soon as the proposal form is received, the underwriter can choose to

_______________.

A accept the risk as a standard case and charge the standard premium rate
B accept the risk with an additional premium if it is a substandard case
C accept the risk with additional condition because it is a substandard case
D All of the above C11

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 PCE Part B- Set E 2000

16 Which of the following statement is correct?

A Accident insurance is renewed automatically

B The underwriter’s consent is necessary to renew
accident policies
C The underwriter is required by law to renew accident insurance
D A and B C11

17 On what condition will the underwriter charge an additional premium?

A On All Risks
B Whenever they feel like it
C On substandard risks
D If the proposer is rude C11

18 Why does an underwriter need to refer to the company’s underwriting guidelines /

manual?

A Because he lacks of knowledge

B Because the manual provides premium rates and limit of acceptance
C Because he cannot rely on his own ability
D Because it is a requirement by law
C11

19 The process of accepting or rejecting a risk is usually termed as ____________.

A insurance practices
B underwriting
C settlement of claim
D survey report C11

20 There are 2 jobs which are done at the same time in a same building, how much is the
premium rate?

A Rate will depend on the structure of the building

B Rate will depend on the nature of the job with a higher
rate
C Pro rata rate for all types of jobs
D Special rate C11

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 PCE Part B- Set E 2000

21 Underwriting can be defined as a process of _______________.

I. assessment
II. selection of risks
III. avoiding cancellation and disputes
IV. determination of premium, terms and conditions

A I, II and III only

B I, II and IV only
C II, III and IV only
D III and IV only C11

22 If any extra information is needed, the underwriter will not _______________.

A investigate the risk

B ask for survey report
C request for loss adjustment report
D make direct inquiries
C11

23 Carelessness is a form of _______________.

A moral hazard
B physical hazard
C occupational hazard
D situational hazard C11

24 When excess is imposed, the insured has to bear ____________ the loss.

A an uncertain amount for

B a fixed amount for
C a fixed percentage of
D an uncertain percentage of
C11

25 Which of the following amount of premium is incorrect?

A Fire Insurance, RM50.00

B Motor Insurance, RM100.00
C Houseowner’s Insurance, RM50.00
D Workmen’s Compensation Insurance, RM35.00
C11

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 PCE Part B- Set E 2000

26 If a motor insurance policy is issued for a period of 8 months or more, the premium
will be ____________.

A based on short term premium rate

B based on pro rata premium rate
C full annual premium
D a proportion of annual premium C11

27 At which point of time is an endorsement issued?

A Before issuance of a policy

B Each time after settlement of claim
C At the time when the policy is inforce
D All of the above C12

28 Proposal form is not used for _______________.

A Motor Insurance
B Fire Insurance
C Marine Cargo Insurance
D Workmen’s Compensation Insurance
C12

29 This document is issued in advance of a policy.

A Warranty
B Endorsement
C Credit note
D Cover note C12

30 A cover note is _______________.

I. temporary policy
II. evidence of contract
III. long term policy
IV. evidence of contract has been endorsed

A I and II only
B II and III only
C III and IV only
D I and IV only C12

31 A certificate of insurance is normally issued when _______________.

A insurance is not made compulsory by law

B subject matter is made compulsory by law
C insurance is made compulsory by law
D subject matter is not made compulsory by law C12

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 PCE Part B- Set E 2000

32 The Policy Form consists of the following:

I. Heading
II. Declaration Clause
III. The Operative Clause
IV. Renewal Clause

A I, II and IV only
B I, II and III only
C II, III and IV only
D III and IV only C12

33 Expressed condition is a condition that _______________.

A relates to implied condition

B appears on the policy document
C is not printed on the document
D does not exist in a policy C12

34 Generally all claim forms require the following information EXCEPT ____________.

A identity of the insurer

B the insured’s interest in the loss
C insured’s particulars
D situation and extent of loss C12

35 In General Insurance, settlement of claims will ____________.

A terminate the contract

B not terminate the contract
C extend the contract
D terminate part of the contract C13

36 In settlement of claims, the insurer would require the claimant to complete

____________.

A discharge form
B declaration form
C settlement form
D claim form C13

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 PCE Part B- Set E 2000

37 When a loss has incurred, all policies state that it is advisable for _______________.

I. insured to inform the loss at a later stage

II. insured to minimize the loss
III. insured to inform the loss immediately
IV. insurer to pay the claims immediately

A I and II only
B I and III only
C II and IV only
D II and III only C13

38 All are method for settlement of claims EXCEPT _______________.

A cash payment of claim by cheque

B repair
C replacement
D installment
C13

39 Under the ‘knock-for-knock’ agreement, the participating insurers agree to pay

____________.

A cost of repairing third party’s car regardless of whom is to blame

B cost of repairing their own comprehensively insured cars regardless of whom is
to blame
C cost of repairing their own comprehensively insured cars of the party in wrong
D cost of repairing the third party’s car who is in wrong C13

40 Insurer will not reject the claims if _______________.

A there was no loss or damage as reported

B the loss or damage for which a claim has been made
was not caused by a peril or was excluded by the policy
C the loss or damage for which a claim has been made
was caused by insured peril
D the policy has been rendered void C13

41 NCD is a _______________.

A no blame discount
B no claim discount
C no mistake discount
D no dispute discount C13

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 PCE Part B- Set E 2000

42 If average clause is applied, the amount payable is:

A Sum insured x Amount of loss

Value of property
B Value of property x Amount of loss
Sum insured
C Sum insured x Value of property
Amount of loss
D Amount of loss x Value of property
Sum insured
C13

43 When a dispute arise, it may be resolved through the following channels:

I. Negotiation
II. Litigation
III. Arbitration
IV. Mediation

A I, II and III only

B I, II and IV only
C II, III and IV only
D All of the above C13

44 A policy is automatically terminated when the insurer has paid _______________.

I. the total loss arising under the policy

II. the full sum insured under the policy
III. any claim under a fidelity guarantee policy
IV. any claim under a motor insurance

A I, II and III only

B I, II and IV only
C II, III and IV only
D All of the above
C13

45 Under a standard fire policy, claims notification must be received by the insurer in
writing within ____________.

A 30 days after the loss

B 25 days after the loss
C 15 days after the loss
D without notification
C14

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 PCE Part B- Set E 2000

46 The heading of Fire and Motor Policy consists of _______________.

A Name and mailing address of the company

B Name and address of registered office
C Insured’s name and the address of his registered office
D Insured’s name and mailing address C14

47 Reasons for exclusion under Fire Policy are _______________.

I. cover can be provided under other more appropriate policies

II. the insurer is not prepared to grant cover without making further inquiry on the
risk
III. the insurer is not prepared to grant cover unless additional premium is paid
IV. the risks are uninsurable

A I, II and III only

B I, II and IV only
C II, III and IV only
D I, II, III and IV only C14

48 The operative clause under private car policy is divided into several sections, they are
known as:

A Section I and II only

B Section I, II and III only
C Section I, II, III and IV only
D A. Section I, II, III, IV and V only

C14

49 No Claim Discount granted under the private motor car policy ranges from
_______________.

A 0% - 25%
B 25% - 55%
C 15% - 25%
D 25% - 38.33% C14

50 Which information is not shown on motor insurance schedule?

A Registration mark
B Road Tax
C Cubic Capacity
D Year of manufacture C14

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 PCE Part B- Set E 2000

51 Which of the following is NOT the objective of PIAM?

A Promoting and protecting

B Monitoring the tariffs and commissions
C Becoming a mediator in motor insurance claim disputes
D Regulating the conduct of every person transacting general insurance business
C15

52 Under Inter-Company Agreement on General Insurance, members of PIAM shall not

permit or authorize agents to _______________.

I. issue or complete insurance policies

II. conduct a loss survey or make loss adjustments
III. settle or approve insurance claims
IV. accept commission from insurance company

A I, II and IV only
B II, III and IV only
C I, II and III only
D I, II, III and IV only C15

53 No commission of whatsoever nature shall be paid to the following EXCEPT

_______________.

A staff of insurance company

B registered or authorized agent or broker
C agent from an authorized bank
D corporate of insurance company C15

54 Insurance agent must at all time carry out their duty _______________.

A by minimising product selling

B with utmost good faith and integrity
C by prioritizing customer service, even if it involves a dispute
D by informing the customer on the insurance matters that he is not aware of
C15

55 According to Inter-Company Agreement on General Insurance Appendix III, an agent

must comply with:

A Code of life insurance promotion

B Sales principles formulated by PIAM
C General sales principles
D Commercial transaction guidelines C15

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 PCE Part B- Set E 2000

56 When an intermediary explains the contract to the clients, the intermediary has to
_______________.

I. understand the uninsured subject matter

II. identify the insurance company
III. explain the coverage provided
IV. emphasize on the restrictions and exclusions

A I, II and III only

B I, II and IV only
C I, II, III and IV only
D II, III and IV only C15

57 As soon as the policyholder notifies an accident which involves a claim, the

intermediary must:

A notify the insurer within 3 weeks

B notify the insurer within 2 weeks
C notify the insurer within 1 week
D notify the insurer immediately, without any delay C15

58 An Intermediary must _______________.

I. keep proper accounts of all financial transactions with his prospective

transactions
II. acknowledge receipt of all money received
III. remit any such moneys collected in strict conformity with his agency
appointment
IV. not distinguish between the money paid for premium and other charges

A I, II and III only

B I, III and IV only
C II, III and IV only
D I, II, III and IV only
C15

59 Which of the following statement is not correct about the job of an Intermediary?

A take all reasonable steps to ensure that the necessary proposal forms are fully
and accurately completed by each proposer of insurance
B induce the prospective policyholder to make a misrepresentation to the
insurance company with regard to material facts
C make it clear that all the answers or statements are the prospective
policyholder’s own responsibility
D avoid influening the prospective policyholder C15

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 PCE Part B- Set E 2000

60 If an Intermediary does not follow the PIAM regulations, the respective insurer will
____________.

A support the agent unless further notification is received from the board of
agency
B terminate the agent’s contract
C suspend the agent’s contract until the board provides
further notice
D terminate the agent’s contract by giving 2 weeks’ notice C15

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