IC39 Mock Test Sample 5
Insurance fraud in engineering and marine sectors includes deliberate losses, barratry, and misrepresentation of facts. Fraud impacts premiums, increasing costs for policyholders and insurers. Organizations like FATF work globally to prevent financial crimes, while IRDAI governs investment regulations. Health insurance requires prudent underwriting to control losses. In indemnity insurance, compensation is limited to actual losses. Investigators play a crucial role in detecting fraud through audits, inspections, and reports. Fraud examples include backdating policies and manipulating claims. Awareness programs, training, and strong investigation mechanisms help insurers reduce fraud and improve transparency, ensuring fair practices and financial stability in the insurance industry.
1. What is fraud in insurance?
a) Honest mistake in claim
b) Intentional deception for financial gain
c) Delay in claim settlement
d) Incorrect documentation
2. Which principle is most violated in fraud cases?
a) Indemnity
b) Contribution
c) Utmost good faith
d) Subrogation
3. What is “exaggeration of claim”?
a) Claiming less than actual loss
b) Claiming correct amount
c) Claiming more than actual loss
d) Not filing claim
4. What is identity theft in insurance?
a) Using own documents
b) Using fake identity
c) Using another person’s identity
d) Sharing policy details
5. What is underwriting fraud?
a) Fraud at claim stage
b) Fraud during policy issuance
c) Fraud by surveyor
d) Fraud by reinsurer
6. What is claims fraud?
a) Fraud before policy
b) Fraud during proposal
c) Fraud during claim settlement
d) Fraud in marketing
7. What is “moral hazard”?
a) Natural disaster risk
b) Carelessness due to insurance
c) Market fluctuation
d) Legal risk
8. What is “adverse selection”?
a) High-risk individuals buying insurance
b) Low-risk individuals avoiding insurance
c) Equal risk distribution
d) Government regulation
9. What is KYC used for?
a) Premium calculation
b) Customer identification
c) Claim settlement
d) Policy renewal
10. What does AML stand for?
a) Asset Management Law
b) Anti Money Laundering
c) Annual Management Loss
d) Asset Monitoring Limit
11. What is “red flag” in fraud detection?
a) Confirmed fraud
b) Suspicious indicator
c) Legal notice
d) Claim approval
12. What is phishing?
a) Fishing activity
b) Cyber fraud to steal data
c) Claim settlement process
d) Risk assessment
13. Who investigates insurance fraud?
a) Agents
b) Surveyors/Investigators
c) Policyholders
d) Brokers
14. What is internal fraud?
a) Fraud by customers
b) Fraud by employees
c) Fraud by government
d) Fraud by reinsurers
15. What is external fraud?
a) Fraud by employees
b) Fraud by outsiders
c) Fraud by regulators
d) Fraud by auditors
16. What is “collusion” in fraud?
a) Individual fraud
b) Group fraud with cooperation
c) Legal process
d) Claim approval
17. What is forensic investigation?
a) Routine inspection
b) Scientific investigation of fraud
c) Policy issuance
d) Premium collection
18. What is the role of IRDAI in fraud control?
a) Ignore fraud
b) Promote fraud
c) Regulate and prevent fraud
d) Only collect premiums
19. What is cyber fraud?
a) Physical theft
b) Online fraud
c) Fire loss
d) Marine loss
20. What is fraud prevention?
a) Ignoring fraud
b) Detecting after loss
c) Taking steps to avoid fraud
d) Paying all claims
