Q1. What is ceding insurer’s retention called in surplus reinsurance?
a) Surplus Limit
b) Excess loss
c) Line
d) Refund
Q2. Where risk attaching method can be used?
a) Marine excess of loss contracts
b) Aviation excess of loss contracts
c) Both a & b
d) None of these
Q3. Which of the following Formula is correct?
a) loss ratio = earned premium/incurred losses × 100
b) loss ratio = incurred losses/incoming premium × 100
c) loss ratio = incurred losses/outgoing premium reserve × 100
d) loss ratio = incurred losses/earned premium × 100
Q4. Which treaty is mainly used for small accounts where the extra administrative burden of a surplus can be quite large?
a) Surplus treaty
b) Quota share treaty
c) Facultative treaty
d) Excess loss treaty
Q5. __________ is the amount of the ceding insurer’s loss eligible for recovery under an excess of loss treaty.
a) Ground up loss
b) Ultimate Net Loss
c) Net retained Loss
d) Gross Loss
Q6. ABC Ltd. wants to insulate shareholders’ funds from unpredictable losses. Devise a solution.
a) Co-insurance
b) Shared insurance
c) Underwriting contract
d) Reinsurance contract
Q7. Complete the phrase: “Unknown accumulations arising out of one event ________.”
a) Can get protected with the help of two risk covers
b) Can get protected with the help of retention deposit covers
c) Can get protected with the help of catastrophe covers
d) Can get protected with the help of minimum deposit covers
Q8. For increasing retained premiums in the country, in which sector did Indian Insurance Companies Association start a reinsurance pool in 1966?
a) Motor
b) Medical
c) Fire and Hull
d) Cargo
Q9. In reinsurance, __________ is a commission paid to an intermediary for placing a retrocession.
a) Revenue Commission
b) Ceding Commission
c) Brokerage Commission
d) Overriding Commission
Q10. Which of the following details are NOT included in Bordereaux?
a) Name of the Insured
b) Territorial scope
c) Class of risk
d) Ceding insurer’s retention
Q11. To whom is the slip initially presented by the broker?
a) Sales executives
b) Analysts
c) Investigators
d) Underwriters
Q12. What will reinsurance capacity depend on while placing top surpluses on large risks?
a) Analytical data
b) Renewal data
c) Underwriting data
d) Application data
Q13. Which of the following is true regarding FEMA, 2000?
a) Only authorized persons can deal in foreign exchange in India
b) Authorized persons can hold/purchase foreign exchange
c) No restriction for current account transactions
d) All of these
Q14. Which two companies received shares by way of retrocession before nationalization?
a) Deccan Reinsurance Company and General Insurance Company
b) India Reinsurance Corporation and Indian Guarantee and General Insurance Company
c) Deccan Reinsurance Company and Indian Guarantee and General Trading Company
d) Indian Trading Corporation and Indian Guarantee and General Insurance Company
Q15. Why are USA and Canada excluded in worldwide treaties?
a) Different legal systems and employment practices
b) Different legal systems and educational practices
c) Different cultural systems and insurance practices
d) Different legal systems and insurance practices
Q16. Analyze the statements:
i. Long term investment yields higher interest
ii. Investors can earn higher return depending on their ability
iii. Liquid cash helps insurer pay claims
a) Only I and II are true
b) Only II and III are true
c) Only III and I are true
d) All the above statements are true
Q17. Categorize “Stop Loss” appropriately.
a) Does not apply on basis of per risk or catastrophe
b) Applies on basis of per risk or catastrophe
c) Only allowed in India
d) Not allowed in India
Q18. How are the basic statistics relating to a treaty collated?
a) From bank statements
b) From information statements
c) From accounts statements
d) From transfer statements
Q19. In reciprocal exchange, how is all exchanged business summarized?
a) Premiums on one side and matching acceptances on the other
b) Claims on one side and matching acceptances on the other
c) Taxes on one side and matching acceptances on the other
d) Cessions on one side and matching acceptances on the other
Q20. In a catastrophe year, the reinsurance program should ensure that __________.
a) Strain on insurer resources is maximum
b) Strain on insurer resources is minimum
c) Invested funds estimate cash loss
d) Invested funds manage cash flow efficiently
