IC29 Mock Test Sample 19

Q1. Insurance is primarily a mechanism for:
a) Transferring risk
b) Eliminating risk
c) Creating risk
d) Ignoring risk

Q2. Salvage value reduces:
a) Net claim cost to insurer
b) Premium amount
c) Bonus amount
d) Reinsurance cost

Q3. Sue and Labour expenses are:
a) Expenses to minimise loss recoverable in addition to claim
b) Not recoverable
c) Only salvage expenses
d) Only ICOW expenses

Q4. Proportional reinsurance includes:
a) Quota share and surplus treaties
b) Excess of loss
c) Stop loss cover
d) Premium reserve

Q5. Sum insured under MB policy is usually:
a) New replacement cost of machinery
b) Market value only
c) Salvage value
d) Book value only

Q6. Salvage in recovered motor theft claim is generally taken by:
a) Insurer after settlement
b) Insured only
c) Dealer
d) Broker

Q7. Claim service is a key driver of:
a) Customer retention and reputation
b) Premium tax
c) Reinsurance
d) Commission

Q8. Surveyor should suggest measures to:
a) Mitigate further loss
b) Increase loss
c) Reinsure claim
d) Delay settlement

Q9. Ombudsman’s role in liability disputes is to:
a) Resolve policyholder complaints
b) Decide all disputes
c) Handle premiums
d) Handle bonuses

Q10. Bad faith claims against insurer may arise from:
a) Improper handling or denial of claims
b) Valid claim settlement
c) Premium collection
d) Bonus payment

Q11. Product Liability insurance covers:
a) Injury or damage caused by defective products
b) Stocks only
c) Buildings only
d) Vehicles only

Q12. The insured peril must be:
a) Covered or not excluded under policy
b) Excluded under policy
c) Unknown to both parties
d) Intentionally caused by insured

Q13. Loss is reported to insurer through:
a) Claim form or intimation
b) Proposal form
c) Endorsement
d) Renewal notice

Q14. Cancellation of war cover generally requires:
a) 7 days’ notice
b) 30 days’ notice
c) One year notice
d) No notice

Q15. Hull claim settlement basis is:
a) Repair cost less deductible or total loss basis
b) Ex-gratia only
c) Salvage only
d) Premium basis only

Q16. Business Continuity Plan (BCP) aims to:
a) Maintain critical operations during disruption
b) Collect premium
c) Increase turnover
d) Reinsure claims

Q17. Self-insured retention means:
a) Amount retained by insured before insurance applies
b) Premium amount
c) Bonus amount
d) Salvage amount

Q18. Duty of disclosure applies to:
a) Both insured and insurer
b) Only insured
c) Only insurer
d) Only surveyor

Q19. Remaining 1/4th collision liability is usually covered by:
a) P&I Club
b) Cargo insurer
c) Shipyard
d) Customs authority

Q20. “Wrongful act” under D&O includes:
a) Error, omission, misstatement or breach of duty
b) Salvage issue
c) Premium issue
d) Bonus dispute