IC01 Mock Test Sample 19
The questions cover insurance fundamentals, including options to increase sum assured (step-up for marriage, childbirth, house purchase, policy anniversaries) and uninsurable losses like stock market risks. They highlight regulatory bodies such as the Tariff Advisory Committee (TAC) for rate control, insurance agreements like treaties between insurers and reinsurers, and ethical guidelines in the Insurance Institute of India. Key ratios like combined ratio measure underwriting profitability. The role of agents, brokers, and underwriters in customer satisfaction is emphasized. Other areas include insurance training requirements, taxation of life and general insurance, historical origins of insurance, GIC as national reinsurer, and legal definitions of insurable interest.
1. Step up option(s) available to increase the sum assured include _______.
A. Marriage
B. Purchase of a house
C. Childbirth
D. Certain policy anniversaries
E. All of the above
2. Which of these losses cannot be insured?
A. Losses due to fire
B. Losses due to terrorist attack
C. Losses due to floods
D. Losses due to stock market crash
E. Losses due to floods
3. What is the objective of Tariff Advisory Committee (TAC)?
A. Issue regulations for investment guidelines
B. Controlling and regulating the rates
C. Regulating rates especially for non-life insurance
D. All of the above
E. None of the above
4. The actual loss arising out of a ______ includes repair, replacement, reinstatement and consequential losses.
A. Risk
B. Hazard
C. Peril
D. Accident
E. None of the above
5. Who are mainly responsible to keep customers happy?
A. Brokers
B. Underwriters
C. Agents
D. Only option 2 and 3
E. All of the above
6. The agreements between insurers and reinsurers are known as _______.
A. Pool arrangements
B. Excess of loss arrangements
C. Quota shares
D. Treaties
E. Hedging
7. In which regulations are the code of ethics for ethical behaviour spelt out?
A. Insurance Advisory Committee
B. Insurance Institute of India
C. IRDA
D. Government
E. Insider Trading
8. Which ratio reflects the overall underwriting profitability of a company?
A. PE ratio
B. Surrender ratio
C. Combined ratio
D. Loss ratio
E. Surrender ratio
9. The ratio that reflects overall profitability of an insurance company is ______.
A. Price Earning (PE) ratio
B. Expense ratio
C. Combined ratio
D. Operating ratio
E. Loss ratio
10. The fee charged by the insurer for services is called ______.
A. Assured
B. Insurance
C. Policy
D. Premium
E. Instalment
11. What is the foundation of good governance?
A. Little concern for others
B. High concern for self
C. Ethical behaviour
D. Being honest
E. All of the above
12. A person must undergo at least ______ training hours to become an insurance agent.
A. 25 hours
B. 50 hours
C. 75 hours
D. 100 hours
E. None of the above
13. In what context does the Carriers Act find reference in insurance contracts?
A. Compulsory third-party motor insurance
B. Govt liability for postal goods
C. Rights and liabilities of road transport carriers
D. Ship owners’ liability for cargo
E. Airline cargo liability
14. Which option is CORRECT?
A. Statement A only
B. Statement B only
C. Statement C only
D. Statements A and B
E. Statements B and C
15. Which of the following statement is INCORRECT?
A. Life insurance claim is tax exempt (subject to conditions)
B. Life insurance provides tax saving
C. Tax benefit in general insurance only for health insurance
D. Commuted pensions are tax exempt
E. Tax benefits same for all policies every year
16. Which of these statements is incorrect?
A. Tax benefits same for all policies every year
B. Commuted pensions are tax exempt
C. Tax benefit only for health insurance in general insurance
D. Life insurance provides tax saving
E. Life insurance claims are tax exempt (subject to conditions)
17. GIC was made the ______ after amendment to General Insurance Business Act in 1999.
A. National life insurer
B. National reinsurer
C. National general insurer
D. General insurance council
E. None of the above
18. ______ introduced the origins of health and life insurance.
A. London Guild Organisation
B. Babylonian traders
C. Chinese traders
D. Greeks and Romans
E. Mediterranean traders
19. In which year was the Ombudsman created?
A. 1995
B. 1997
C. 1998
D. 2000
E. 2002
20. Where has insurable interest been defined?
A. Insurance Act, 1938
B. IRDAI Act
C. Trust Act
D. Contract Act
E. None of the above
