IC85 M0ck Test Sample 3
Reinsurance helps insurers manage risk, improve capacity, and stabilize financial performance. It includes facultative and treaty arrangements, with premiums as consideration. Efficient information systems, proper statistical analysis, and portfolio evaluation are essential for decision-making. Concepts like loss occurring basis, underwriting year, and hour’s clause define coverage and claim handling. Market pools and reciprocal trading enhance risk sharing. Global hubs like Bahrain and Dubai promote offshore reinsurance. Proper reporting of losses, cooperation clauses, and regulatory compliance (like stamp duty) are vital. Overall, reinsurance ensures effective risk distribution, transparency, and long-term sustainability of insurance operations.
Q1. Benefit of reciprocal trading is?
a) Disables profit
b) Increases net profit
c) Increases net loss
d) Removes profit
Q2. Correct option regarding reinsurance?
a) Two types exist
b) Treaty transfers risks
c) Premium is consideration
d) All of these
Q3. Important data from information system?
a) Working capital
b) Reinsurer numbers
c) Catastrophe codes
d) Intermediaries count
Q4. Optimum capacity of second surplus treaty?
a) Credit-liability balance
b) Premium balance
c) Loan-liability balance
d) Loan-account balance
Q5. When is coverage triggered?
a) Govt loss
b) Policyholder loss
c) Insurer loss
d) Advisor loss
Q6. Statistical system should focus on?
a) Rejected portfolio
b) Proposal analysis
c) Project analysis
d) Portfolio analysis
Q7. Correct statement about market pool?
a) Only I
b) Both II & III
c) Only III
d) Only IV
Q8. Losses occurring basis means?
a) Claims during period
b) Reported claims
c) Policy start claims
d) All of these
Q9. Who is a reinsurer?
a) Accepts reinsured risk
b) Insured person
c) Ignores risk
d) Direct insurer
Q10. Hour’s clause limit?
a) 24 hrs
b) 48 hrs
c) 72 hrs
d) 168 hrs
Q11. Marine proportional accounts basis?
a) Account year
b) Underwriting year
c) Gross rates
d) Commission
Q12. Offshore reinsurance hubs?
a) Europe
b) Bahrain & Dubai
c) Africa
d) Hong Kong
Q13. Insurer must provide?
a) Claims provision
b) System data
c) Annual accounts
d) Actuarial data
Q14. Cyclone-prone regions?
a) Eastern Europe
b) USA & Canada
c) India & Fiji
d) Northern Europe
Q15. Outstanding losses advised when?
a) End of period
b) On request
c) Anniversary
d) On settlement
Q16. Claims Cooperation Limit means?
a) Max liability
b) Reporting threshold
c) Reinsurer share start
d) Claim count
Q17. Stamp Act timeframe (India)?
a) 1 week
b) 2 months
c) 3 months
d) 6 months
Q18. Brokerage payable when?
a) Share received
b) Profit calc
c) Retrocession
d) Profit made
Q19. If loss differs from estimate?
a) Increase liability
b) Terminate contract
c) Adjust premium
d) Adjust amount
Q20. Purpose of minimum deposit premium?
a) Commission calc
b) Secure obligation
c) Extra profit
d) Claim expenses
