Q1. What aspect of an insurer's or reinsurer's approach is influenced by the short-term nature of the credit rating process?
a) Long-term investment strategies
b) Compliance with government regulations
c) Market decisions and the use of credit rating information
d) Management of day-to-day operations
Q2. In India, what requirement do credit rating agencies engaged in the rating of securities offered by public or rights issue need to fulfill?
a) Compliance with advertising regulations
b) Registration with the Ministry of Finance
c) Approval from the Reserve Bank of India
d) Obtaining a license from SEBI
Q3. How does a double-trigger policy reduce the probability of a loss payment from an insurer's perspective?
a) It increases the likelihood of loss payment
b) It doesn't affect the probability of loss payment
c) It requires additional premium payments
d) It lowers the rate of premium
Q4. What is the primary function of "time and distance" policies in reinsurance?
a) To reduce liquidity requirements
b) To provide quick payments to policyholders
c) To offer coverage for short-tail claims
d) To encourage reinsurers to accept long-tail claims
Q5. What do brokers need to offer to remain competitive in the evolving insurance market?
a) Exclusively traditional reinsurance solutions
b) Only securitization options
c) Consulting services and specialized risk transfer mechanisms
d) Lower prices and less comprehensive profiles
Q6. What is the role of retrocession in the risk management process of reinsurers?
a) To attract more inward reinsurance offers
b) To increase exchange losses
c) To cope with delayed remittances
d) To cede a portion of risk and stabilize earnings
Q7. What impact does the absence of retrocessional support have on the rates quoted during a hard market?
a) No impact on rates
b) Leads to higher rates
c) Leads to lower rates
d) Increases confidence of underwriters
Q8. What is the primary purpose of conducting a review of reinsurance treaty acceptances?
a) To increase cancellation notice period
b) To ensure consistency between accounted and estimated premiums
c) To assess upcoming cash flows
d) To determine reinsurance cost
Q9. Why are efficient data processing arrangements necessary in reinsurance?
a) To eliminate the need for statistics
b) To minimize processing costs
c) To provide data to ceding insurers
d) To support decision-making and review purposes
Q10. What is the primary role of an accurate and efficient information system in reinsurance?
a) Increase credibility of reinsurer
b) Simplify regulatory compliance
c) Assist in marketing products
d) Automate claims processing
Q11. What does a reinsurance contract function as in insurance?
a) A contract of indemnity
b) A contract of premium collection
c) A contract of liability transfer
d) A contract of risk exclusion
Q12. What was the main change regarding GIC Re after liberalization in India?
a) Became a regional reinsurer
b) Replaced by private insurers
c) Transitioned to a global reinsurer
d) Became the sole regulator
Q13. Which of the following countries are excluded in territorial scope as a document of agreement?
a) UK
b) Canada
c) Australia
d) South Africa
Q14. Which document is issued by an intermediary after the issue of cover note?
a) fpr
b) policy document
c) claim document
d) kyc form
Q15. Which treaty can be placed in weak reinsurance market conditions?
a) surplus treaty
b) quota share treaty
c) facultative obligatory treaty
d) excess of loss treaty
Q16. __________ is a pro-rata reinsurance contract in which insurer and reinsurer share premiums and losses according to a fixed percentage.
a) Quota Share Treaty
b) Surplus Treaty
c) Excess of loss treaty
d) Proportional treaty
Q17. _________ is an automatic reinsurance agreement whereby the ceding insurer parts with a fixed percentage of every risk written.
a) Proportional Treaty
b) Proportional Facultative
c) Surplus Treaty
d) Quota Share Treaty
Q18. A reinsurer decides the retention based on the following.
a) Technical formulas
b) Rules
c) Experience
d) Calculation
Q19. ABC Ltd. claims that operative clause allows defining the exact business within the scope of the reinsurance contract.
a) No, termination clause allows this
b) No, I do not agree
c) No, PML excess clause allows this
d) Yes, I agree
Q20. Categorize "Sovereign rating" appropriately.
a) Rating of a particular government
b) Rating of a government body
c) Rating of a regulator
d) A country's overall rating
