IC45 GENERAL INSURANCE UNDERWRITING - 11
| Q1.Which of the following is incorrect? |
| a) Rates are the same as premiums. |
| b) A rate is the price of a given unit of insurance |
| c) Rates vary according to the likelihood and potential size of the loss. |
| d) Rate making is the process of calculating a price to cover the future cost of insurance claims and expenses. |
| Q2.Under loss ratio method of the ratemaking process the following information is available: Total premium related expense factor = 0.25 Profit and contingency factor = 0.05 Ratio of non-premium related expenses to losses = 0.075 Calculate the target Loss ratio and indicate the correct answer from below : |
| a) 0.65 |
| b) 0.86 |
| c) 0.76 |
| d) 0.55 |
| Q3.In addition to the promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums, What other key objective the IRDA does not have? |
| a) Design of the Tariffs |
| b) Ensuring the market's financial security |
| c) Regulating the marketing and distribution of products |
| d) Appointing a qualified actuary |
| Q4.While assessing the risk characteristics, the rating plan broadly looks at risks based on______ |
| a) Frequency of losses |
| b) Severity of losses |
| c) Both of the above |
| d) None of the above |
| Q5.Which method is to estimate the proportion of the loss for an underlying policy that is expected in the entire portfolio? |
| a) Experience rating method |
| b) Exposure rating method |
| c) Loss ratio method |
| d) Schedule rating method |
| Q6.Underwriting Process involves__ |
| a) Decision on Risk Acceptance |
| b) Decision on Staff Recruitment |
| c) Decision on Investment |
| d) Decision on Employee benefits |
| Q7.The process of underwriting helps the underwriter in deciding which of the following? |
| a) Whether to accept the risk |
| b) Whether to reject the risk |
| c) Whether to accept the risk or reject the risk |
| d) If accepted then the terms and conditions to be applied and the premium to be charged. |
| Q8.Which insurance is also called Loss of profits(LOP) or Business Interruption (BI)? |
| a) Insurance of property |
| b) Insurance of Earnings/profits |
| c) Insurance of Liability |
| d) Insurance of persons |
| Q9.Where a proposal form is not used, the insurer shall record the information obtained orally or in writing and confirm it within a period of ____thereof with the proposer and incorporate this information in its cover note or policy. |
| a) 7 days |
| b) 15 days |
| c) 30 days |
| d) 45 days |
| Q10.___ is a key differentiator enabling the insurer to stay competitive, and at the same time be solvent and profitable. |