IC11 Mock Test Sample 2
This MCQ set focuses on advanced concepts in motor, marine, fire, and reinsurance practices. It covers topics such as Form A liability cover, premium calculation (pure premium), Industrial All Risk policies, and Institute Time Clauses for marine hull insurance. It tests understanding of underwriting functions, endorsements, claim loading (malus), and reinsurance concepts like portfolio level assessment and burning cost method. Practical insurance applications like baggage insurance, cargo risks, and floating fire policies are included. It also highlights key principles such as premium as the insurer’s main income source and exclusions like intentional loss (arson) in insurance coverage.
1. In Motor Insurance, 'Form A' covers ________.
a) Act Liability only
b) Act Liability and Own Damage Losses
c) Own damage losses only
d) Third party losses only
2. In private motor insurance, separate rates apply for vehicles below and above ______.
a) 800 cc
b) 1000 cc
c) 1500 cc
d) 1800 cc
3. Pure Premium is defined as ________.
a) Total premium divided by the number of exposure units
b) Total premium divided by the total claims
c) Total amount of claims divided by premium
d) Total amount of claims incurred per year divided by the number of exposure units
4. The Industrial All Risks Insurance Policy covers risks over ______.
a) Rs. 50 crores
b) Rs. 100 crores
c) Rs. 200 crores
d) Rs. 250 crores
5. The Institute Time Clauses pertain to __________.
a) Marine cargo insurance
b) International trade insurance
c) Foreign exchange insurance
d) Aviation insurance
6. There cannot be a legal relationship between __________.
a) Nominee and insured
b) Reinsurer and insurer
c) Reinsurer and insured
d) Insurer and insurer
7. What is the claim loading applied to a policy known as?
a) Claim Minus
b) Claim Load
c) Claim Malus
d) Claim Fides
8. When amendments are made in the policy, they are termed as ____________.
a) Exclusions
b) Representations
c) Warranties
d) Endorsements
9. When looking for reinsurance, the underwriter works at two levels – risk level and ______.
a) Macro
b) Micro
c) Primary
d) Retention
10. When will the underwriter use the burning cost method?
a) When the risk is huge
b) When claims experience is inconsistent
c) When technical guide rates are not available
d) All of the above
11. Which insurance deals with Loading and Unloading conditions and warehousing facilities?
a) Godown insurance
b) Public liability insurance
c) Store insurance
d) Cargo insurance
12. Which insurance is effective whilst the insured temporarily resides in a hotel during a journey?
a) Burglary Insurance
b) Micro Insurance
c) Liability Insurance
d) Baggage Insurance
13. Which of the following is NOT a function of the underwriter?
a) Identify and calculate risk
b) Determine premium and terms
c) Retention and reinsurance
d) Draft policy documents
14. Which policy covers damage to actual structure of the vessel?
a) Marine Hull insurance
b) Marine Cargo insurance
c) Marine Fire insurance
d) All of the above
15. Which type of fire policy covers stocks at various locations under one sum assured?
a) Common Policy
b) Declaration Policy
c) Long term policy
d) Floating policy
16. With increased competition, what should insurance companies do to stand out?
a) Organise camps
b) Recruit more agents
c) Increase channel selling
d) Product differentiation
17. _______ allows life and general insurers to tie up and sell products.
a) Rural Insurance
b) Micro Insurance
c) Motor Insurance
d) Liability Insurance
18. ________ is the primary source of income for an insurer.
a) Commission
b) Dividend
c) Bonus
d) Premium
19. _________ is not covered under satellite insurance.
a) Pre Launch insurance
b) Personal Accident cover for the crew
c) Orbit insurance
d) Third party liability
20. A fire deliberately caused by the insured is called ______.
a) Sabotage
b) Intent to damage
c) Immolation
d) Arson
