IC56 Mock Test Sample 7
Fire insurance claims start with verifying policy validity, premium compliance, and coverage of the reported peril. Surveyors are appointed (especially in co-insurance cases) to assess losses. Underwriting ensures insurers operate profitably using scientific principles. Claim settlement includes provisions like debris removal limits and declarations on oath. Policies such as declaration policies cover fluctuating stock values. Indemnity is limited by both property value and sum insured. Insurable interest requires a legal relationship with the property. Perils like fire and lightning are insured risks, while floods may occur in multiple ways. Principles like utmost good faith and warranties govern contracts, ensuring fair and transparent claim handling.
Q1. On receipt of claim intimation, the first step for insurers is to verify that
a) The policy is in force
b) Section 64 VB of the Insurance Act is complied with
c) The perils covered under the policy are the same as the perils under which the loss is reported
d) All of the above
Q2. When insurance is on a __________ basis, a surveyor is appointed by the leading insurer
a) Co-insurance
b) Reinsurance
c) Salvage
d) Underwriting
Q3. The term __________ is used to denote the broad principle and specific practices adopted by insurers
a) Adverse selection
b) Underwriting
c) Claim settlement
d) Standard risk selection
Q4. The sale is advertised, __________ in proper legal terminology
a) Private sale
b) Through the Insured
c) By public opinion
d) Tender form
Q5. Expenses incurred up to ______ of the claim amount is covered on removal of debris
a) 1%
b) 3%
c) 7%
d) 10%
Q6. A __________ is a condition or contingency and unless it is performed there is no contract
a) Representation
b) Warranty
c) Consideration
d) Underwriting
Q7. The insured is required to make a __________ of the truth of the claim
a) Reasonable requirement
b) Principle of indemnity
c) Declaration of oath
d) Onus of proof
Q8. Identify the incorrect option related to reinstatement value policy provisos
a) Proviso 1 – work must be done with reasonable dispatch
b) Proviso 2 – normal indemnity applies until expenditure incurred
c) Proviso 3 – relates to pro-rata average
d) Proviso 4 – intimation within 3 months
Q9. Who deals with complaints up to Rs. 20 lakhs?
a) Agent
b) Ombudsman
c) Principal
d) Commissioner
Q10. Stock at manufacturers' premises may consist of
a) Raw materials
b) Stock-in-progress
c) Finished goods
d) All of the above
Q11. Which policy covers fluctuating stock values?
a) Reinstatement value policy
b) Declaration policy
c) Floater policy
d) Contract price policy
Q12. Madhav case – surveyor appointment
a) Insurer discretion
b) Mandatory above Rs. 20,000
c) Only if insured requests
d) Mandatory above Rs. 50,000
Q13. Extent of indemnity is subject to
a) Value of subject matter
b) Sum insured
c) Only A
d) Both a and b
Q14. Fire and lightning are examples of
a) Insured perils
b) Excluded perils
Q15. Flood may occur due to
a) Overflow of water bodies
b) Bursting of mains/sewage
c) Sea water flooding
d) All of the above
Q16. Duty to minimize loss – True or False
a) True
b) False
Q17. Essentials of insurable interest include
a) Physical object
b) Subject matter of insurance
c) Legal relationship
d) All of the above
Q18. A ______ is an undertaking by the insured
a) Condition
b) Consideration
c) Underwriting
d) Warranty
Q19. Common law provision includes
a) Utmost good faith
b) Insurable interest
c) Common intention
d) Indemnity
Q20. Basis for indemnity in Suresh’s case
a) Theory of marginal utility
b) Theory of accrued profit
c) Purchasing power parity
d) Keynesian theory
