IC39 Mock Test Sample 7
Insurance operates under the Indian Contract Act, with fraud penalties strengthened by the Insurance Laws Amendment Act 2015. Fraud triggers include suspicious claims behavior, delayed documentation, and repeated losses. Common frauds involve identity theft, cargo theft, and exaggerated or fictitious claims. Regulatory bodies like NAIC support supervision through data and analysis. Investigators must possess honesty and analytical skills to detect fraud effectively. Liability insurance claims are handled on occurrence or claims-made basis. High-risk products like single premium or investment-linked policies require strict AML monitoring. Internal audits ensure compliance and identify risks, while IPC sections 23 and 24 define wrongful gain relevant to fraud cases.
Q1. Under which act does every insurance policy fall, as it is considered a contract?
a) Indian Penal Code 1860
b) Indian Evidence Act 1872
c) Indian Contract Act 1872
d) Indian Companies Act 2013
Q2. Which Act introduced provisions for penalties related to insurance fraud committed by agents and insurance companies?
a) Indian Penal Code 1860
b) Insurance Act 1938
c) Indian Contract Act 1872
d) Insurance Laws Amendment Act 2015
Q3. Which of the following characteristics are associated with an average offender in insurance fraud cases in Australia?
a) Gender-specific
b) Socioeconomic group-specific
c) Law-abiding with no criminal record
d) Financially stable
Q4. Identify the notable fraud triggers in the insurance industry:
a) I, II, III
b) IV, V, VI
c) I, II, IV, V
d) I, II, III, IV, V, VI, VII, VIII
Q5. In a liability insurance policy with a retroactive period, which claims are admitted for coverage?
a) Claims during policy period but reported after expiry
b) Claims before retroactive period and reported after expiry
c) Claims occurred and reported between retroactive period and expiry
d) Claims before retroactive period but reported during policy
Q6. What type of insurance plan combines both insurance protection and investment components?
a) Investment-linked insurance plan
b) Hybrid insurance policy
c) Dual protection plan
d) Unit linked insurance plan
Q7. Marine insurance is further classified into which types?
a) Marine vessel & equipment insurance
b) Marine liability & property insurance
c) Marine hull & cargo insurance
d) Marine accident & travel insurance
Q8. According to ICP 21, what aspects are reviewed in claims management?
a) I and II
b) II and III
c) III and IV
d) I, III, and IV
Q9. An important quality an investigator should possess is:
a) Quick learner
b) Influence
c) Sincerity & honesty
d) Punctuality
Q10. Which is the fastest growing external fraud crime in the USA?
a) Insurance fraud
b) Money laundering
c) Identity theft
d) Cybercrime
Q11. Claim frauds typically include:
a) Reporting loss without loss of life
b) Claims for non-existent persons
c) Exaggerated sum insured
d) All of the above
Q12. What does NAIC provide to insurance commissioners?
a) Financial grants
b) Legal representation
c) Expertise, data, and analysis
d) Lobbying services
Q13. Which situation can be considered a fire insurance fraud trigger?
a) Prompt document submission
b) Increased claim settlement
c) Salvage differs from claimed damage
d) Full cooperation by insured
Q14. Cargo theft is classified as:
a) Criminal act of stealing cargo
b) Insurance fraud reporting
c) Intentional sinking of vessel
d) Legitimate claim
Q15. Which of the following is the role of internal audit?
a) Identifying financial vulnerabilities
b) Evaluating customer service
c) Ensuring compliance with regulations
d) Identifying process/system vulnerabilities
Q16. The most commonly dealt ways of claim in liability insurance are:
a) Loss occurrence basis
b) Claims made basis
c) Excess basis
d) Both a & b
Q17. Which insurance products require greater AML attention?
a) Term life insurance
b) Whole life insurance
c) Health insurance
d) Single premium investment-linked products
Q18. Which statement accurately describes fraud?
a) Honesty and transparency
b) Truthful representation
c) Concealment to mislead
d) Full disclosure
Q19. Which sections of IPC mention “wrongful gain”?
a) Section 23
b) Section 24
c) Section 23 and 24
d) Section 22 and 26
Q20. Losses occurring when a vehicle is uninsured or policy expired fall under:
a) Loss prior to commencement fraud
b) Uninsured vehicle accident fraud
c) Nullified insurance claims
d) Pre-existing damages fraud
