IC85 M0ck Test Sample 5
Reinsurance programs are designed to stabilize insurers’ portfolios and optimize risk retention. Treaty arrangements can be proportional or non-proportional, with defined clauses governing premium, commissions, and obligations. Captive insurers, including fully-owned and rent-a-captive structures, help organizations manage risks internally. Reinsurers must maintain balanced portfolios across classes and territories. Financial reinsurance, retrocession, and finite risk solutions enhance flexibility in managing long-term exposures. Tools like bordereaux ensure transparency in ceded risks. Engineering and catastrophe insurance provide specialized coverage. Overall, effective reinsurance relies on structured agreements, financial discipline, and strategic risk-sharing to ensure sustainability.
Q1. How many captive insurers operate worldwide?
a) 4000
b) 1000
c) 2000
d) 5000
Q2. Who are involved in program design stage?
a) Only I
b) Both II & III
c) Only III
d) Both I & III
Q3. Treaty reinsurance policy is signed?
a) Insurer only
b) Broker
c) On behalf of each party
d) Agent
Q4. Excess of loss contract statement?
a) Correct
b) Wrong but court may ratify
c) Wrong but IRDA may ratify
d) Wrong
Q5. Treaty reinsurance basis?
a) Proper basis
b) Regulatory basis
c) Promotional basis
d) Proportional / non-proportional
Q6. Phrase for reinsurance programme?
a) Stabilization programme
b) Gross protection
c) Optimization plan
d) Improvement phase
Q7. Clause for same premium rate?
a) Original conditions
b) Underwriting
c) Net retained lines
d) Ultimate net loss
Q8. Function of reinsurance commission?
a) Manufacturing
b) Graduated
c) Purchasing
d) Reinsurance commission
Q9. False statement for reinsurer awareness?
a) Too much class exposure
b) Too much territory exposure
c) Balanced business risk
d) Only a & b true
Q10. Types of captive insurers?
a) Fully-owned, rent-a-captive, protected cell
b) Partially-owned types
c) Private cell
d) Prevented cell
Q11. Feature of finite risk solution?
a) No time factor
b) No investment income
c) No risk transfer
d) Limited risk transfer
Q12. Claim paid by Gamble Re Co.?
a) Rs. 6,12,500
b) Rs. 2,62,500
c) Rs. 8,75,000
d) Rs. 14,00,000
Q13. Correct statement on reinsurance?
a) Risk sharing
b) Avoid losses
c) Expert support
d) All of these
Q14. Extranet statement validity?
a) Yes
b) Depends turnover
c) Depends size
d) No (intranet)
Q15. Service tax on direct premium?
a) 3%
b) 15%
c) 2%
d) 7%
Q16. Financial reinsurance termination?
a) Only I
b) Both II & III
c) Only II
d) Only IV
Q17. Best index for retention measurement?
a) Bonus ratio
b) Loan ratio
c) Premium ratio
d) Loss ratio
Q18. Engineering insurance covers?
a) Apartment risks
b) Doctors risks
c) Bomb explosion
d) Machinery & CAR
Q19. Rights forgone in treaty?
a) Insured restriction
b) Underwriter freedom
c) Reinsurer outside scope
d) Reinsurer cannot refuse risks
Q20. List of ceded risks is called?
a) Bordereaux
b) Quota share
c) Premium
d) Treaty start
