IC85 Mock Test Sample 10
Reinsurance helps insurers manage risk, maintain solvency, and stabilize financial performance. Organizations like Lloyd's of London operate as insurance and reinsurance markets that support global risk sharing. Credit ratings, retention schedules, underwriting year accounting, and aggregate excess of loss covers are important elements of reinsurance operations. GIC Re focuses on expanding overseas inward business while maintaining domestic growth. Reinsurers also focus on emerging regions like the Middle East and North Africa because of high insurance growth potential. Facultative reinsurance, solvency margins, and slip notes further support effective risk management and treaty administration.
Q1. Categorize “Lloyds” appropriately.
a) Market
b) Reinsurer
c) Insurer
d) Regulator
Q2. Choose the correct statement.
a) Portfolio stability increases with growth
b) Retention aims to control acceptable fluctuation
c) Larger portfolios reduce fluctuation
d) All of these
Q3. GIC-Re received the best rating in which year?
a) 2010
b) 2011
c) 2012
d) 2015
Q4. Identify the odd man out.
a) Insurer’s capital
b) Insurer’s free reserves
c) Insurer’s assets
d) Insurer’s memorandum of association
Q5. Who are involved in program design stages?
a) Only I
b) Both II and III
c) Only III
d) Both I and III
Q6. As per IRDA, reinsurer ratings cannot be below:
a) AAA
b) AAB
c) BBB
d) CCC
Q7. What can denote minimum accumulation from two risks?
a) Single Risk Warranty
b) All Risk Warranty
c) No Risk Warranty
d) Two Risk Warranty
Q8. Rating reliability and repayment ability is called:
a) Credit rating
b) Sovereign rating
c) Actuarial rating
d) IRDA rating
Q9. Which document evidences acceptance of treaty shares?
a) Slips
b) Cover notes
c) Reinsurance contracts
d) Treaty wordings
Q10. Retention schedules are mainly based on:
a) Sum insured
b) Profit
c) Loss exposure
d) Ceding
Q11. What domestic to overseas target ratio does GIC-Re maintain?
a) 40:60
b) 20:80
c) 10:90
d) 30:70
Q12. Which business uses underwriting year basis accounting?
a) Fire and accident proportional reinsurance
b) Fire and accident non-proportional reinsurance
c) Marine proportional reinsurance
d) Marine non-proportional reinsurance
Q13. Aggregate excess of loss reinsurance is also known as:
a) Facultative cover
b) Stop loss insurance
c) Quota share cover
d) Surplus treaty
Q14. Why do reinsurers focus on Middle East and North Africa?
a) Education sector growth
b) IT sector growth
c) Technology sector growth
d) Insurance sector growth potential
Q15. What is an advantage of reinsurance under solvency margin rules?
a) Increase business without increasing assets
b) Increase business without marketing
c) Increase business without cash
d) Increase business without capital
Q16. Which statement about credit rating is valid?
a) Only II
b) Both I and III
c) Only IV
d) Both IV and I
Q17. Slip notes evidence acceptance by signing underwriters.
a) Yes, I agree
b) No, applicable to cover notes
c) No, applicable to reinsurance contracts
d) No, applicable to treaty wordings
Q18. Growth of project insurance and aviation resulted in:
a) Lesser need for higher premiums
b) Lesser need to reinsure
c) Increased need to reinsure
d) Lesser need for lower premiums
Q19. Reinsurance premium is generally based on:
a) Reinsurer’s discretion
b) Ceding insurer’s profit
c) Original premium paid by insured
d) Administrative costs
Q20. Total claims cost associated with the non-proportional treaty for 2012 was:
a) Rs. 0
b) Rs. 14,75,000
c) Rs. 56,00,000
d) Rs. 5,00,000
