Q1. The _______ serve the purpose of evidencing eventual acceptance of a share of the risk/treaty ceded by signing underwriters.
a) slips
b) cover notes
c) reinsurance contracts
d) treaty wordings
Q2. The magnitude of an earthquake is measured in the _____________.
a) Richter scale
b) beufort scale
c) moment magnitude scale
d) modified magnitude scale
Q3. When will there be a maximum limit per loss occurrence?
a) If coverage is on "loss occurrence" basis
b) If coverage is on "risk excess of loss" basis
c) If coverage is on "catastrophe excess of loss" basis
d) If coverage is on "each loss each risk" basis
Q4. Which of the following is incorrect with respect to Reinsurance premium?
a) The reinsurance premium paid is a percentage of the original premium
b) The percentage paid to reinsurers is the same as the percentage of SI ceded
c) Premiums for excluded risks are not included
d) Commissions paid to agents and brokers are deducted from reinsurance premium
Q5. Why does facultative reinsurance involve more administrative work?
a) Each offer must be separately scrutinized and maintained
b) Renewals occur weekly
c) Employees are changed monthly
d) Monthly tax filing is required
Q6. Categorize "profit commission on underwriting year" basis appropriately.
a) No reference to underwriting year
b) No reference to accounting year
c) No reference to accounting year and all transactions accounted in same year
d) No reference to underwriting year, and all transactions accounted in same year
Q7. There are various important factors in reinsurance programme design, some of them are:
a) Investment & liquidity policy
b) Reinsurance market conditions
c) Both a & b
d) Neither a nor b
Q8. In the case of outward treaties executed in India, who is responsible for getting the copy retained in India stamped?
a) The foreign ceding insurer
b) The Indian reinsurer
c) The local Stamp Office
d) The broker
Q9. What is the primary tax in India levied on direct premiums related to insurance?
a) Value Added Tax (VAT)
b) Corporate Tax
c) Premium Tax
d) Service Tax
Q10. In which geography has Labuan emerged as a reinsurance center for the Far East?
a) Bermuda
b) Singapore
c) Dubai
d) Hong Kong
Q11. Which company is the oldest professional reinsurer still in existence and now merged with Gen Re?
a) Swiss Reinsurance Company
b) Munich Reinsurance Company
c) The Cologne Reinsurance Company
d) Mercantile and General
Q12. What is the significance of the "IMF wage index" in the "Index Clause"?
a) Determines government tax on claims
b) Defines internal monetary fund
c) Reflects changes in international labor wages
d) Sets exchange rates for claims
Q13. Why have attempts to introduce standard formats in proportional treaty accounts met with limited success?
a) Lack of interest from insurers
b) Complex international regulations
c) Universal acceptance of old formats
d) Diverse international nature of reinsurance market
Q14. In which type of treaties is profit commission typically calculated on an accounting year basis?
a) Fire and Accident proportional treaties
b) Marine and Aviation proportional treaties
c) Non-proportional treaties
d) Overriding commission treaties
Q15. Why is the natural expiry method of cancellation no longer practical?
a) Allows clean transition
b) Most cost-effective option
c) Excessive administrative work and multiple accounts
d) Legally prohibited
Q16. What is the purpose of deducting brokerage from the minimum and deposit premium?
a) Reduce reinsured’s share
b) Calculate reinsurance commission
c) Secure broker’s fee
d) Cover claim expenses
Q17. How does IFRS impact the presentation of reinsurance transactions?
a) Requires net presentation
b) Mandates offsetting assets and liabilities
c) Enforces gross presentation
d) No impact on presentation
Q18. What is no longer an option for reinsurers with cheap catastrophe market capacity?
a) Establishing ART capabilities
b) Providing permanent capital
c) Focusing on corporate objectives
d) Providing capacity alone
Q19. How is the claims payment process at Lloyd’s automated?
a) Manual settlements
b) Brokers collect payments physically
c) Claims paid by cash
d) Claims settled through an online system
Q20. What differentiates Lloyd’s from traditional insurers?
a) Department of Trade supervises operations
b) Each syndicate member has unlimited liability
c) Lloyd’s is a conventional insurance company
d) Lloyd’s has no underwriters
