IC45 Mock Test Sample 9
General Insurance Underwriting and Rate Making involve assessing risks, determining premiums, and ensuring compliance with regulatory requirements. Various rating methods such as prospective experience rating, merit rating, and class rating are used to price risks appropriately. Underwriters analyze claims data, underwriting results, and loss patterns to improve risk selection and profitability. Reinsurance and retention limits help insurers manage large exposures. Technology plays a significant role in underwriting efficiency, especially in a globalized and competitive market. Regulatory requirements govern product approvals, claims settlement, policy issuance, and customer protection. Proper underwriting audits and actuarial support ensure sustainable and fair insurance operations.
Q1. Under which rate regulatory system can an insurer change rates immediately and file them later within a specified period?
a) Prior Approval Laws
b) File and Use Laws
c) Use and File Laws
d) Flex Rating Laws
Q2. In which rating method is past experience used to calculate future rates?
a) Prospective Experience Rating
b) Retrospective Rating Method
c) Exposure Rating Method
d) Class Rating Method
Q3. __________ are special conditions based on statements made by the insured.
a) Conditions
b) Warranties
c) Exclusions
d) Endorsements
Q4. Which policy can be used when separate stock values for each godown cannot be declared?
a) Fire Floating Policy
b) Fire Declaration Policy
c) First Loss Policy
d) Package Policy
Q5. Financial statements of general insurers are drawn into how many classes of business?
a) One
b) Two
c) Three
d) Four
Q6. In which analysis is the claim database examined for patterns in losses?
a) Loss Cause Analysis
b) Claims Analysis
c) Underwriting Analysis
d) Trend Analysis
Q7. Who looks at innovations to monitor risks and develop pricing remedies?
a) Agent
b) Principal
c) Underwriter
d) Surveyor
Q8. Which of the following is NOT a Named Peril Policy?
a) Motor Package Insurance Policy
b) Burglary Policy
c) Industrial All Risks Policy
d) Fire Policy
Q9. Who compiles first-loss rating schedules and discount schedules for deductibles?
a) Advocate
b) Appointed Actuary
c) Compliance Officer
d) Surveyor
Q10. The purpose of __________ is to provide feedback on underwriting policy implementation.
a) Underwriting Result
b) Corrective Action
c) Underwriting Audit
d) Claims Review
Q11. An insurer may offer a product for sale only after:
a) Filing the product with IRDAI
b) Resolving all product-related queries
c) Receiving confirmation that no further queries remain
d) Completing marketing activities
Q12. Underwriters may short-change either the customer or the premium when relying less on expertise. Which combination is correct?
a) Customer Only
b) Premium Only
c) Premium, Customer
d) Customer, Premium
Q13. The portion of risk retained by an insurer before reinsurance is called:
a) Withholding Limit
b) Retention Limit
c) Detention Limit
d) Preservation Limit
Q14. Why are IT applications necessary in insurance underwriting?
a) Impact of Globalisation
b) Challenging Market Conditions
c) Inefficiency of Traditional Processes
d) All of the Above
Q15. A discount on premium is offered if perils are deleted from a standard policy.
a) True
b) False
c) Depends on Policy Type
d) Depends on Insurer
Q16. Within class-rated products, which is considered a package policy?
a) Retail Health Insurance
b) Burglary Insurance
c) Office Insurance
d) Products Liability Insurance
Q17. Delay in claim settlement after acceptance attracts interest at ______ above the prevailing bank rate.
a) 1%
b) 2%
c) 3%
d) 4%
Q18. Which of the following is unlikely to be a rating factor in Fire Insurance?
a) Construction
b) Fire Extinguishers
c) Building Security
d) Deductible
Q19. The insurer is not permitted to offer any product for sale until:
a) Product filing is completed
b) All product-related queries are satisfactorily resolved
c) IRDAI confirms no further queries remain
d) Both b and c
Q20. How many methods are generally used to determine Individual or Merit Rating?
a) One
b) Two
c) Three
d) Four
