IC01 Mock Test Sample 24
These IC01 Licentiate questions focus on insurance concepts such as differences between participating and non-participating policies, premium structures, and annuity-related terminology like vesting and deferred dates. They also cover underwriting, risk assessment, and the role of TPAs regulated by IRDA. Key principles tested include utmost good faith, insurable interest, indemnity, and subrogation, along with dispute resolution methods like arbitration. Other topics include internal customers in banking, policy conditions, material increase of hazard clauses, and product liability risk management. Additionally, questions address broker licensing requirements, underwriting processes, and insurance as a risk transfer mechanism supporting financial protection and economic development.
1. Premium rates for Non Participating Policies are lower than Corresponding Participating Policies
- TRUE
- FALSE
- Premium is decided on case to case basis
- Non Participating Policies are not available in India
2. Which of these statement is incorrect?
- In life policies, the payment whenever due is a fraction or a multiple of the sum assured plus bonuses, if due.
- The insurer's liability under the policy is not limited to the sum insured and extended beyond that amount
- Sum assured is always stated in the policy document
- Sum assured mentioned in policy document becomes the basis for payments to be made by the insurer
- In non-life policies, where indemnity clause apply, the sum assured indicate an upper limit to the claim
3. Mr. Anil has taken a pension plan policy in which he will pay premium for 20 years and the annuity will start when the policy has completed the terms of 20 years. What is the date called when annuity starts?
- Deferred date
- Unpaid date
- Delayed date
- Post poned date
- Annuity date
4. Mr. Ramesh works in the IT department of a private bank. His internal customers are _______.
- The Managing Director of the bank
- The customers of the bank branch
- The employees of the branch who are dependent on the systems
- The fixed deposit holders of the bank branch
- All of the above
5. Which is the process by which disputes under insurance policies can be resolved without going to a court of law?
- Counseling
- Mediation
- Adjudication
- Arbitration
6. When material facts are withheld by the proposer and the two parties are not of the same mind, the principle of ______ is breached.
- Subrogation
- Insurable Interest
- Utmost Good Faith
- Contribution
7. The principle of ______ is breached when material facts are withheld by the proposer.
- Subrogation
- Insurable Interest
- Utmost Good Faith
- Indemnity
- Contribution
8. Which kind of policies are related to Time or Voyage policies?
- Air insurance
- Cargo insurance
- Fire insurance
- Hull insurance
- Accident insurance
9. Who issues licenses to the insurance third party administrators (TPAs)?
- Respective Insurance companies
- IRDA
- Insurance council
- Insurance association
- Insurance advisory
10. In which of the below cases has the insurer breached the principle of utmost good faith?
- Promises are made about returns or bonuses in future
- Premium is collected without looking at the applicability of rebates allowed by the insurer
- The proposer is advised not to mention the fact that he was on leave for two weeks
- The proposer is not informed that the use of sprinkler system may affect premium
- All of above
11. Dev purchased a fire insurance policy and later increased hazard by manufacturing fireworks. This clause is an example of ________.
- Definition
- Condition
- Declaration
- Insuring agreement
- Fraud
12. Which of the following is NOT a way to reduce product liability risk?
- To test products for safety problems
- To include clear and explicit directions with products
- To warn customers about hazards
- To design products that use non specified recycled material
- None of the above
13. Select the incorrect statement:
- The risk of damage to ships can be controlled by cyclone patterns and weather technology
- The risk of motor accidents can be reduced by following traffic rules
- The risk of death can be prevented
- All of the above
- None of the above
14. Dhawal wants to become an insurance broker but missed some training. What is the next step?
- Dhawal can start meeting clients
- Dhawal cannot solicit insurance business
- Dhawal has to obtain license after passing the prescribed exam
- Only option 2 and 3
- None of the above
15. A primary purpose of insurance as a risk transfer mechanism is to _______.
- Provide risk control advice
- Compensate for financial losses
- Provide a source of fund for capital investment
- Spread the cost of an insured loss among many policy holders
- All of the above
16. The process where an insurer assesses risk and decides entry is known as ________.
- Actuarisation
- Documentation
- Sanction
- Underwriting
- Documentation
17. The process used to determine entry to the group and assess risk and premium is called ________.
- Scrutinising
- Financing
- Sanctioning
- Checking
- Underwriting
18. Reshma’s pension plan starts annuity after 30 years. The starting date is called ________.
- Deferred date
- Vesting date
- Delayed date
- Both A and B
19. In India, war and strikes are covered under the ________.
- Government of India War and Risks Scheme
- Enemy Attack and Insurance Scheme
- Fidelity Insurance
- Fire Insurance
- Aviation insurance
20. Which statement is incorrect regarding Government promotion of insurance?
- Insurance funds are channeled into economic growth
- Insurance helps industry and trade manage risks
- Insurance mobilizes savings of middle and lower income groups
- Insurance reduces cost of helping destitute families
- Idle and unaccounted money is available to government and deployed in insurance
