IC01 Mock Test Sample 14
These questions cover key insurance concepts including insurable interest, liability insurance, arbitration, and reinsurance types. They test understanding of insured events, whole life policies, and risk management processes. Regulatory aspects like the Insurance Act, web aggregators, and investment guidelines are highlighted. Practical concepts such as cover notes, fire-fighting expenses, and customer mindset toward insurance are included. Financial instruments in ULIPs, life fund reserves, and actuarial roles are also emphasized. The questions also differentiate between brokers and actuaries, and explain contract principles. Overall, the set focuses on fundamentals of insurance operations, risk handling, and regulatory framework in India.
1. Why is fire fighting expenses reimbursed to the Insured?
- To encourage loss minimisation efforts
- To prevent fire losses
- To increase fire losses
- To analyse cause of fire
- To study fire losses
2. Where has ‘insurable interest’ been defined?
- The Insurance Act, 1938
- IRDAI Act
- Trust Act
- Contract Act
- None of the above
3. Which of the following events is not an Insured Event?
- Earthquake
- Cyberattack
- Change in fashion
- Dishonesty of the employee
- None of the above
4. Whole life insurance plan provides for the sum assured only in the event of _______.
- survival of life assured during the term of the policy
- death of the life assured during the term of the policy
- death or survival of life assured during the term of the policy
- death of the life assured whenever it would occur
- None of the above
5. What is Liability Insurance?
- Liability Insurance caters to the medical needs of a family
- Liability Insurance cover death or disablement arising out of accidents
- Liability insurance provides indemnity for injuries to third parties or their property
- Liability Insurance covers risks related to dishonesty, fraud and embezzlement
- Liability Insurance covers medical expenses while travelling abroad
6. Which of the following statements is INCORRECT with respect to 'Arbitration'?
- It is a judicial process
- The arbitrators need not be formal judges or lawyers
- If there is only one arbitrator appointed, both parties must agree
- Arbitrators are appointed by the parties
- Arbitration is quick and less expensive
7. Which of the following is not true?
- Quota Share is a Proportional Reinsurance arrangement
- Stop Loss is a Proportional Reinsurance arrangement
- Excess of Loss could be reinsured facultatively or by treaty
- Surplus is a Proportional Reinsurance arrangement
- All are true
8. Which line of insurance business is governed by a specific Act?
- Fire
- Marine
- Health
- Product Liability
- All of the above
9. Outline the activities in sequential order in the process of Risk Management:
- B, D, A, C
- C, A, B, D
- A, B, C, D
- C, B, D, A
- D, A, C, B
10. Which of the following statement is INCORRECT with respect to a COVER NOTE?
- Cover Notes help quick grant of insurance
- Cover Notes cover fire risks at different locations
- Cover Notes can be issued on the spot
- Premium can be changed retrospectively after underwriting
- Cover Notes issued for quick motor insurance
11. The average mindset of a person buying insurance can be explained as:
- Happy to use money well
- Reluctance to set aside money
- Happy to save
- Regret not using money elsewhere
- None of these
12. There is no current _____________ for the insurance customer.
- Comfort
- Discomfort
- Accommodation
- Queries
- Account
13. All Web Aggregators shall have the word __________ in the name.
- Surveyors
- Corporate agents
- Third party administrators
- Brokers
- Insurance web aggregators
14. Why do catastrophic events strain insurers’ funds?
- Economic downturn
- Weather unreliability
- Lack of government support
- Thousands of large claims
- Government assistance
15. Representations must be strictly complied with.
- False – representations may not be strictly complied with
- True – representations must be strictly complied with
- False – assignments must be complied
- False – claims data must comply
- False – warranties must comply
16. ULIP Fund allocation statement:
- Govt Bonds / Shares
- Govt Bonds / Hundis
- T-Bills / Shares
- T-Bills / Govt Bonds
- T-Bills / Hundis
17. Insurance Act investment guideline purpose:
- Only risk-free investments
- No overseas investment
- Avoid high-risk, invest safely
- Avoid infra/manufacturing
- No guidelines
18. __________ is called ‘Life Fund’.
- Premium Liability
- Reserve Premium
- Premium Reserve
- Liability Premium
- Insurance Premium
19. Choose correct statement about Insurance Contract:
- Insurer pays if premiums paid as per contract
- Pays part even if premiums paid
- Pays after 50% premium
- Policyholder pays insurer
- None
20. Differentiate between Broker and Actuary:
- Actuary sells, Broker underwrites
- Broker sources business, Actuary calculates premiums
- Broker markets, Actuary calculates premiums
- Broker canvasses, Actuary underwrites
- Actuary markets, Broker calculates
