IC01 Mock Test Sample 15
Insurance principles cover indemnity, risk assessment, and dispute resolution. Claims settlement follows subrogation, so deposits belong to the insurer. Loss probability in fire insurance depends on the nature of goods stored. Material facts exclude irrelevant details like marital status in liability insurance. Total outgo includes claims, commission, and expenses. Arbitration resolves disputes outside court. Lloyd’s is a key global insurance institution. Loss ratio indicates business viability. Risk control includes separation and duplication. Premiums are based on expected loss. Flood damage falls under fire insurance. Marine insurance is the oldest form, and some policies are freely assignable.
1. Prerna Insurance Co. settled a claim of Akash Enterprises amounting to Rs. 7 lakhs for a loss resulting from the dishonest conduct of their employee Lokesh. A security deposit of Rs. 3 lakhs was kept by Lokesh with Akash Enterprises. The deposit rightfully belongs to:
(A) Other employees of Akash Enterprises
(B) Lokesh
(C) Lokesh's parents
(D) Prerna Insurance Co.
(E) Akash Enterprises
2. Identify the features that have a relationship to loss probability in Fire Insurance:
(A) Number of vehicles that the insured owns
(B) Insured’s age
(C) Insured’s marital status
(D) Insured’s income
(E) Nature of goods in storage
3. __________ is not considered to be a material fact:
(A) The nature of goods in storage in Fire Insurance
(B) The number of guards employed for security in Burglary insurance
(C) The nature of use of the vehicle in Motor Insurance
(D) The age of the life insured in Life insurance
(E) The marital status of the insured in Liability insurance
4. Total outgo for an insurance company =
(A) Net incurred claims + Net commission + Operating expenses
(B) Investment income + Net commission + Net incurred claims
(C) Net incurred claims + Reserve for claims outstanding + Claims reserve for IBNR
(D) Gross incurred claims + Gross commission + Operating expenses
(E) Net incurred claims + Reserve for claims outstanding
5. Which is the process by which disputes under insurance policies can be resolved without going to a court of law?
(A) Counseling
(B) Mediation
(C) Adjudication
(D) Arbitration
6. Which is the process by which disputes under insurance policies can be resolved without going to a court of law?
(A) Counseling
(B) Mediation
(C) Adjudication
(D) Arbitration
7. __________ is an old and prestigious institution in London that provides useful services to the insurance world:
(A) Lloyds
(B) Wordsworth's
(C) Duckworth's
(D) Spencer's
(E) Queen's
8. With reference to Loss Ratios, which of the following statement is INCORRECT?
(A) If the loss ratio is 100% or less, there is cause for concern
(B) Loss ratios help insurers make decisions on future growth of the business
(C) Loss ratios are calculated for each class of business separately
(D) Loss ratios are calculated for each class of policyholders
(E) Loss ratio are an indication of the viability of business
9. Which of these is a LOSS REDUCTION technique?
(A) Separation
(B) Duplication
(C) Diversification
(D) Hedging
(E) Only 1, 2 and 3
10. There are 1000 cars in a town. It is expected that 2% (20 cars) may meet with an accident in a year. Loss per car = Rs. 25,000. What will be the insurance premium per car?
(A) Rs 250
(B) Rs 500
(C) Rs 780
(D) Rs 1050
(E) Rs 1300
11. In a town, there are 5000 houses, each valued at Rs. 50,000. It is expected that 30 houses may catch fire in a year. What will be the premium?
(A) Rs 300
(B) Rs 500
(C) Rs 750
(D) Rs 860
(E) Rs 950
12. Damage due to floods are associated with:
(A) Fire insurance
(B) Marine insurance
(C) Motor insurance
(D) Life insurance
(E) Term insurance
13. Loading of premium due to a claim exceeding a specified limit in a non-life insurance policy is known as:
(A) Malus
(B) Simple loading
(C) Rate Up
(D) Excess claim loading
(E) None of the above
14. __________ is NOT a personal contract:
(A) Fire policy
(B) Marine cargo policy
(C) Personal accident policy
(D) Householders policy
(E) Motor policy
15. Which of these policies is/are freely assignable?
(A) Marine Cargo policies
(B) Marine Hull policies
(C) Floater policies
(D) Valued policies
(E) All of the above
16. _______ is the oldest form of insurance:
(A) Motor
(B) Life
(C) Health
(D) Liability
(E) Marine insurance
17. The following are exception to the Principle of Indemnity except:
(A) Replacement Cost Insurance
(B) Life Insurance
(C) Valued Policies
(D) Market Value basis
(E) All of the above
18. Marketing is all about _________ between various customers:
(A) Diversification
(B) Segmentation
(C) Orientation
(D) All of the above
(E) None of the above
19. The Insurance Advisory Committee consists of members from:
(A) The central and state government
(B) Field of commerce, transport, consumer forums, agents and other intermediaries
(C) The general public
(D) The life / general insurance companies
(E) None of the above
20. Which of the following statement is INCORRECT?
(A) On assignment, the assignor loses rights over the policy
(B) Assignment means transfer of rights and liabilities of the policy holder to another person
(C) The person who makes an assignment is called the assignor
(D) In insurance, consent of the insurer is not necessary but the insurer has to be informed
(E) A marine hull policy can be assigned without the consent of the insurer
