IC27 Mock Test Sample 3
Health insurance markets face imperfections mainly due to information asymmetry, adverse selection, and moral hazard (both demand and supply side). Insurers manage risks through underwriting and cost containment mechanisms. Younger individuals are preferred due to lower risk. Various systems like CGHS, ESIS, and global models (USA, Germany) highlight funding and coverage differences. Principles like utmost good faith are fundamental in insurance contracts. Best practices include customer feedback, hospital assessment, and grievance handling. Policies cover limited expenses, excluding non-medical costs. Regulatory frameworks ensure solvency, fairness, and consumer protection, while fraud prevention measures like verification and monitoring help maintain system integrity.
1. What is one of the main reasons for the imperfections in the health insurance market?
A) Lack of competition among insurers
B) Information asymmetry between insurers and insured individuals
C) High pricing of insurance policies
D) Extensive government regulation
2. What is the term used when a senior person is more interested in health insurance than a young person?
A) Adverse selection
B) Moral hazard
C) Risk pooling
D) Underwriting
3. What do health insurers use to minimize moral hazards?
A) Risk assessment tools
B) Premium discounts for seniors
C) Cost containment mechanisms
D) Underwriting guidelines
4. Why might an insurance company prefer a young-aged person?
A) Young people are more prone to health risks
B) Young people are less interested in insurance
C) Premiums for young people are lower
D) Young people require more medical services
5. What is demand-side moral hazard?
A) Tendency to use fewer health services
B) Making informed healthcare decisions
C) Accepting fewer health services
D) Excessive use of health services
6. What is supply-side moral hazard?
A) Providers offer fewer services
B) Insured avoid medical care
C) Providers give more expensive treatments
D) Insured underutilize services
7. Benefits for Central Government employees are available under which scheme?
A) Term insurance
B) ESIS
C) CGHS
D) Travel insurance
8. What % of the non-elderly population in the USA was covered by employment-based health benefits (2004)?
A) 47.50%
B) 50%
C) 62%
D) 76%
9. Health insurance premium is collected as payroll tax in which country?
A) USA
B) Germany
C) India
D) France
10. In which contracts is the Principle of Utmost Good Faith followed?
A) Health insurance contracts
B) Purchase contracts
C) Management contracts
D) Virtual contracts
11. In best practices, which measure was ranked second?
A) Product brochure showing coverage and exclusions
B) Assessment of hospitals
C) Regular satisfaction survey
D) A welcome call explaining policy details
12. Which option got the highest score for post-sales customer feedback?
A) Call recording and quality check
B) Online customer feedback process
C) Regular satisfaction surveys
D) Hospital assessment
13. Which of these expenses are covered under health insurance?
A) Only travelling and attendant food
B) Only visitors and attendant food
C) Only visitors and travelling
D) None of these
14. Ms. Surekha had expenses of ₹14,000 and coverage of ₹20,000. What reimbursement will she get?
A) ₹6,000
B) ₹14,000
C) ₹20,000
D) ₹34,000
15. Which ministry regulates the Nutrition Support Program?
A) Ministry of Social Welfare
B) Ministry of Rural and Urban Development
C) Ministry of Labour
D) Ministry of Women and Child Development
16. Which regulation ensures insurers remain solvent and accounts are fair?
A) Management regulations
B) Licensing and registration
C) Statutory base
D) Financial regulations
17. Sending another person for medical test is what type of fraud?
A) Impersonation
B) Cash defalcation
C) Substitution
D) Non-disclosure
18. How is authenticity of address and bogus customers checked?
A) Fraud investigation
B) Claims data tracking
C) Training and communication
D) Welcome call
19. Why do regulators impose guaranteed issue requirements?
A) To maintain portability
B) To standardize definitions
C) To cap waiting periods
D) To prevent arbitrary denial or cancellation
20. In which contracts is the Principle of Utmost Good Faith followed?
A) Health insurance contracts
B) Service contracts
C) Sales contracts
D) Real estate contracts
