IC01 Mock Test Sample 03
This IC01 Licentiate question set covers essential concepts of insurance, including compulsory motor insurance such as third-party liability and the purpose of exclusions in contracts. It highlights the role of risk managers in identifying and reducing risks, and explains key functions of TPAs in handling health claims. The questions test understanding of insurance principles like assignment, insurable interest, and underwriting profitability using ratios like combined ratio. It also includes topics on surveyors assessing losses, IRDA’s regulatory role, and types of insurance policies such as pension and health plans. Additionally, it touches on the history of insurance in India and actuarial responsibilities.
1. Ms. Reeta would like to buy a car. Which insurance is compulsory before bringing the car to the road?
A. Motor Own Damage cover
B. Personal Accident cover
C. Burglary Insurance
D. Third Party Motor Liability Insurance
E. None of the above
2. Exclusions are used in Insurance Contracts for all of the following reasons except _______.
A. To prevent moral hazard from occurring
B. To eliminate duplication of coverage
C. To avoid coverage of un-insurable perils
D. To provide a physical description of the property
E. None of the above
3. In the insurance sector, who attempts to identify and eliminate or reduce risks?
A. Peril Manager
B. Professional Manager
C. Event Manager
D. Insurance Manager
E. Risk Manager
4. Which word is dissimilar to the other four options?
A. Loss Ratio
B. Expense Ratio
C. Solatium Fund
D. Exclusions
E. Gross Direct
5. Which of these Government bodies does not contribute to the Solatium Fund?
A. Central Government
B. State Government
C. General insurers
D. Municipal Corporations
E. None of the above
6. Who assesses the losses in Non-Life Insurance?
A. Underwriters
B. Agents
C. Surveyors
D. Actuaries
E. Engineers
7. ______ policy offers a tax deferred saving account.
A. Pension plans
B. Child education protection plan
C. Endowment plans
D. Term plans
E. Universal life insurance
8. The full form of TPA is _______.
A. Third Party Accounts
B. Third Party Analyst
C. Third Party Agreement
D. Third Party Administrators
E. Third Party Association
9. What is the role of a TPA?
A. To get new business for the insurer
B. To scrutinize the proposal forms
C. To settle medical and hospital expenses on behalf of the insurer
D. To calculate the premium
E. To issue the policy documents
10. Who issues licenses to the insurance third party administrators (TPAs)?
A. Respective Insurance companies
B. IRDA
C. Insurance council
D. Insurance association
E. Insurance advisory
11. A broker who places his insurance with a primary insurer is known as a ________.
A. Reinsurance broker
B. Composite broker
C. Direct broker
D. Primary broker
E. None of the above
12. Cover Notes are ____________.
A. Temporary documents issued for property insurance as proof of insurance cover
B. Meant for giving reinsurance cover
C. Given when the policy has been finalized
D. Issued for motor policies as proof under Motor Vehicle Act
13. Which of these statements is/are INCORRECT?
A. On assignment, the assignor loses rights over the policy
B. Assignment means transfer of rights and liabilities
C. The person who makes the assignment is called the assignor
D. In life insurance, insurer consent is not necessary but must be informed
E. A marine hull policy can be assigned without insurer consent
14. When a person takes a Household Insurance Policy, the insurable interest exists at the outset and _________.
A. On the date the policy is terminated
B. On the date a claim arises
C. On the date the policy document is received
D. On the date the cancellation period expires
E. On the proposal stage
15. Who makes periodic valuations of funds and reserves of life insurers and certifies solvency margins?
A. PFRDA
B. RBI
C. Underwriter
D. Chief Financial Officer
E. Actuary
16. Which was the first company to conduct Life Insurance Business in India?
A. Madras Equitable
B. Bombay Mutual Life Assurance Society
C. Oriental Life Insurance Company
D. Bharat Insurance Company
17. Which was the first company to conduct life insurance business in India?
A. LIC of India
B. Oriental Life Insurance Company
C. GIC of India
D. Madras Equitable
E. Bharat Insurance Company
18. When converting a whole life policy to an Endowment policy the premium will ______.
A. Remain same
B. Change
C. Increase
D. Decrease
E. None of the above
19. ______ is an indication of the company's overall underwriting profitability.
A. Loss ratio
B. Combined ratio
C. Expense ratio
D. Surrender ratio
E. Loss ratio
20. A co-payment or co-pay is a term used in ________.
A. Wealth insurance
B. Health insurance
C. Marine insurance
D. Fire insurance
E. Term insurance
