IC01 Mock Test Sample 18
This set of questions focuses on risk management concepts in IC01 Licentiate. It explains key ideas such as continuous risk reduction, even when risks are retained or transferred. Topics include methods of risk reduction like maintenance, sprinklers, and drills, and identifies that insurance itself is not a reduction technique. It covers risk transfer through reinsurance and distinguishes retention as bearing the loss. The sequence of risk management steps includes identification, analysis, and data verification using MPL/PML. It also highlights risk financing techniques like retention and transfer, self-insurance, static vs dynamic risks, health insurance coverage, IRDA provisions, and classification of risks and arrangements for loss handling.
1. ________ is a continual process and efforts should be made to minimise risk even if retained or transferred.
A. Forecasting of risk
B. Evasion of risk
C. Reduction of risk
D. Forestalling of risk
E. Calculation of risk
2. Which is NOT a way of managing risk by way of reduction?
A. Segregation of hazardous materials and processes
B. Installing sprinklers and heat detection systems
C. Periodical maintenance of electrical and other installations
D. Regular drills creating mock situations
E. Taking adequate insurance
3. Which is not a way of managing risk by way of REDUCTION?
A. Periodical maintenance of electrical installations
B. Segregation of hazardous materials
C. Taking adequate insurance
D. Installing sprinklers and heat detection systems
E. Regular drills creating mock situations
4. The transfer of risk from one insurance company to another is known as ________.
A. Retention of risk
B. Migration of risk
C. Re-insurance
D. Minimisation of risk
E. Prevention of risk
5. Retention and transfer are mainly ________ techniques.
A. Risk financing
B. Risk transfer
C. Risk avoidance
D. Risk planning
E. Risk reducing
6. Which of the following statement is correct?
A. Retention means the person can repel the loss
B. Retention means the person can pass on the loss
C. Retention means the person can avoid the loss
D. Retention means the person can bear the loss
E. Retention means the person can foil the loss
7. When a person decides to bear the loss and not transfer it, such risk is ________.
A. Renewed
B. Reduced
C. Removed
D. Retained
E. Avoided
8. Risk ________ is when a person decides to bear the loss himself.
A. Reduction
B. Avoidance
C. Retention
D. Transfer
E. Prevention
9. Arrange the correct order of Risk Management activities: A) Check data credibility B) Analyze risk C) Identify risk D) Use MPL & PML.
A. D, A, C, B
B. C, B, D, A
C. A, B, C, D
D. C, A, B, D
E. B, D, A, C
10. Arrange the correct sequence: A) Checking data credibility B) Analyzing risk C) Identifying risk D) Using MPL & PML.
A. B, D, A, C
B. C, A, B, D
C. A, B, C, D
D. C, B, D, A
E. D, A, C, B
11. Risk Retention and Risk Transfer are ________ techniques.
A. Risk Management
B. Risk Financing
C. Risk Retention
D. Risk Identification
E. None of the above
12. Which of these is an INCORRECT risk classification pair?
A. Fundamental and Particular
B. Pure and speculative
C. Dynamic and static
D. Important and unimportant
E. Financial and non-financial
13. Which statement is INCORRECT as per Insurance Act 1938?
A. Indisputability clause
B. Micro insurance provisions
C. Prohibition of rebates
D. Nomination and assignment guidelines
E. Power of investigation and inspection
14. Setting aside a separate fund to meet losses is called ________.
A. Reinsurance
B. Loss Insurance
C. Self Insurance
D. General Insurance
E. Group Insurance
15. A transport company setting aside funds for its own losses is called ________.
A. Risk Acceptance
B. Self Insurance
C. Risk Avoidance
D. Risk Reserve
E. Risk Subsidy
16. The same transport company arrangement is called ________.
A. Risk Acceptance
B. Self Insurance
C. Risk Avoidance
D. Risk Reserve
E. Risk Subsidy
17. What best describes Health Insurance?
A. Covers travel medical expenses abroad
B. Covers ocean-going ships
C. Covers goods in transit
D. Covers sickness and hospitalization expenses
E. Covers fire and explosion damage
18. A portion of insurer’s income is held as reserve for ________.
A. Income tax
B. Claims
C. New business
D. Solvency margin
E. Awards
19. Which of these options is/are Static Risk?
A. Fire in a house
B. Tsunami
C. Facebook IPO failure
D. All of the above
E. None of the above
20. Separation technique is best suited for ________.
A. Inflammable materials
B. Poisonous materials
C. Radioactive materials
D. Ceramic materials
E. All of the above
