KABARAK UNIVERSITY

BACHELOR OF SCIENCE IN ACTUARIAL SCIENCE

ACTS 210 GENERAL INSURANCE THEORY
EXAM, APRIL, 2019

QUESTION ONE ( 30 MARKS)

(a)Outline five essential characteristics of good quality data ( 10 marks)
(a)Explain five circumstances under which a risk be declined by insurers ( 10 marks)
(b) Explain three types of insurance policies that can be issued to motor vehicle owners ( 6 marks)
(c)Distinguish between premium risk and claim risk ( 4 marks)

QUESTION TWO ( 20 MARKS)

(a) Differentiate these underwriters
(i) Property and casualty underwriters ( 2 marks)
(ii) Personal line and commercial lines underwriters ( 2 marks)
(b) Explain five forms of the individual insured person's obligations in health insurances ( 10 marks)
(c) Describe the limitations and exclusions in personal accidents ( 6 marks)

QUESTION THREE ( 20 MARKS)

(a) Describe five features of Marine Insurance in Kenya ( 10 marks)
(b) Explain three basic problems in premium calculation ( 5 marks)
(c) Outline five factors considered in property insurance underwriting ( 5 marks)

QUESTION FOUR (20 MARKS)

(a) Explain the following insurance ratios and show how each is calculated
(i) Frequency ( 2 marks)
(ii)Severity ( 2 marks)
(iii) Pure premium ( 2 marks)
(iv) Average premium ( 2 marks)
(v) Loss ratio ( 2 marks)
(b) Rates for most insurance are determined by a class rating or individual rating. Explain the
two components of individual rating ( 10 marks)
QUESTION FIVE ( 20 MARKS)
(a) Explain five circumstances that necessitates calculating reserves ( 10 marks)
(b) Describe five steps in reserving ( 10 marks)

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