IC45 Mock Test Sample 1

Q1. The risk factors used for rating should be _____ .

a) Practical for implementation
b) Impractical for implementation
c) Non-discriminatory
d) Both practical for implementation and non-discriminatory

Q2. Which of the following is unlikely to be a rating or underwriting factor in fire insurance?

a) Fire Extinguishers
b) Building security
c) Construction
d) Deductible

Q3. Which rate will be rated as per an internal manual or guidelines prepared by the insurer for risks of the same class or category?

a) Pure Rating
b) Loss Method Rating
c) Generic Rating
d) Individual Rating

Q4. A cover note is valid for how many days?

a) 7 days
b) 15 days
c) 30 days
d) 45 days

Q5. In claims where a surveyor has to be appointed, it shall be so done within _____ of receipt of intimation from the insured.

a) 12 hours
b) 24 hours
c) 48 hours
d) 72 hours

Q6. Insurance companies are subject to laws and regulations. The principal areas regulated include all the following EXCEPT -

a) Formulation and licensing of insurers
b) The number of policies sold
c) Rate regulation
d) Sales practices and consumer protection

Q7. The decision to issue a policy on a _____ occurs when a risk is considered high risk within underwriting standards.

a) Sub-standard basis
b) Preferred basis
c) Proposal declined
d) Standard basis

Q8. What is the amount called which the policyholder agrees to bear in any claim?

a) Exclusions
b) Expenses
c) Deductible
d) Cover Note

Q9. Which class of insurance generally requires controlling office approval for underwriting?

a) Householders’ Policy
b) Health Insurance
c) Mediclaim Insurance
d) Aviation Insurance

Q10. The method based on the assumption that claims move from unreported to reported and from unpaid to paid is called _________.

a) Pure Development
b) Loss Development
c) Loaded Premium
d) Pure Premium

Q11. What corrective action can be taken by an insurance company to reduce losses?

a) Change the pricing
b) Invest in high-risk equities
c) Use difficult policy wordings
d) Revitalise the economy

Q12. What type of corrective action can be taken to reduce losses?

a) Cancel policies in case of material misrepresentation
b) Use technical policy wording
c) Invest in high-risk assets
d) Issue long-term auto-renew policies

Q13. Which feature should be present in technology selected for automation of insurance business processes?

a) Economical
b) Reduced ROI
c) Proprietary standards only
d) Single-user systems

Q14. With regards to floating policies, which option is true?

a) Sum insured is fixed based on declaration by the insured in jewellery insurance
b) Sum insured is automatically paid upon loss
c) Declaration and floating policies can be granted in burglary insurance
d) Floating policies are valid for 5 years

Q15. ______ is an example of an Express Warranty in Marine Insurance.

a) The ship should not deviate from its normal course of journey
b) The ship must be seaworthy at commencement of voyage
c) The voyage should be legal
d) Sailing should be conducted with armed guards

Q16. As per the term ‘Contra Preferentum’, any ambiguous provision in the policy is construed against the ________.

a) IRDAI
b) Insured
c) Insurer
d) Agent

Q17. Documentation for insurance also includes ______.

a) Cover Note
b) Vision Statement of the Insurer
c) Code of Conduct of Insurance Agents
d) Both Cover Note and Vision Statement

Q18. If the insured cannot declare separate values of stock in each godown but can declare total stock value, insurance cover can be taken by ______.

a) Stock Storage Policy
b) First Loss Policy
c) Package Policy
d) Fire Floating Policy

Q19. Which of the following can be a rating factor in Fire Insurance?

a) Age of the owner
b) Proximity to other buildings
c) Distance between workplace and residence
d) Marital status of owner

Q20. A percentage deductible of 10% means -

a) Insurer pays 10% of premium in claim
b) Premium increases by 10% after claim
c) Insured pays 10% of loss amount
d) Insurer pays 10% of loss amount