IC86 Mock Test Sample 17
Enterprise Risk Management (ERM) and alternative risk financing techniques help organizations identify, assess, treat, and monitor risks effectively. Risk analysis includes identification and evaluation, while risk treatment includes elimination, reduction, and transfer. Tools such as HAZOP, insurance securitization, finite risk reinsurance, and integrated risk management combine insurance and capital market approaches for better protection against high-severity risks. Environmental disasters like hurricanes, tornadoes, and freezing conditions highlight the need for proactive planning. Contracts and obligations are legally binding arrangements essential for governance. Written risk management policies improve coordination, communication, and responsibility allocation. Self-insurance and contingent capital tools provide additional financial protection mechanisms.
Q1. ______ can be seen as the opposite to insurance securitisation.
a. Spread Loss Covers
b. Capital Markets
c. Insuratization
d. Retrospective Finite Risk
Q2. ______ involves examining the future and drawing up the plan of action.
a. Manage
b. Foresee
c. Organise
d. Compare
Q3. ______ is not a component of ERM.
a. Event identification
b. Risk assessment
c. Monitoring
d. Corporate governance
Q4. ______ provides a qualitative approach to risk identification at planning and design stage.
a. Flow charts
b. HAZOP
c. Check lists
d. Physical inspection
Q5. ______ subject(s) is/are addressed in the COSO framework.
a. Fraud Deterrence
b. Enterprise Risk Management
c. Internal controls
d. Both Enterprise Risk Management and Internal controls
Q6. ______ types of cover provide convergence of insurance and capital markets.
a. Financial Quota Covers
b. Adverse Loss Development Covers
c. Insuratization
d. Finite Risk Reinsurance
Q7. ______ concepts combine insurance risks with financial market risks.
a. Adverse development covers
b. Integrated risk management
c. Insurance securitization
d. Finite risk reinsurance
Q8. ______ is/are examples of Environmental Disaster.
a. Hurricane
b. Tornado
c. Freezing conditions
d. All of the above
Q9. ______ transfers insurance risk to capital market investors.
a. Insurance Securitization
b. Rent-a-captives
c. Finite quota shares
d. Finite Risk Reinsurance
Q10. ______ is an example of Retrospective finite risk reinsurance.
a. Adverse loss development covers
b. Financial quota shares
c. Spread loss covers
d. Double trigger concepts
Q11. ______ is associated with changes in human wants and technological innovations.
a. Liability Risk
b. Fundamental Risk
c. Dynamic Risk
d. Static Risk
Q12. ______ major industrial disaster took place in the USA.
a. Bhopal Gas Tragedy
b. Triangle Factory Fire
c. Seveso Dioxin disaster
d. Mina Mata Mercury disaster
Q13. ______ activities are conducted at the risk analysis stage.
a. Risk identification
b. Risk evaluation
c. Risk elimination
d. Both identification and evaluation
Q14. ______ activities are conducted at the Risk Treatment stage.
a. Risk elimination
b. Risk reduction
c. Risk transfer
d. All of the above
Q15. ______ are legally binding arrangements required of an organisation.
a. Decree
b. Obligations
c. Commitments
d. Assurance
Q16. ______ are legally enforceable arrangements meeting offer and acceptance conditions.
a. Assurance
b. Agreements
c. Contracts
d. Commitments
Q17. ______ is NOT an advantage of a written risk management policy statement.
a. Organizes risk management objectives
b. Improves communication channels
c. Coordinates treatment of loss exposures
d. Establishing general objectives of organization’s risk management function
Q18. ______ is not an example of Funded Traditional Contingent Capital tool.
a. Captives
b. Banking products
c. Income/Asset Swaps
d. Contingent Debt
Q19. ______ is NOT an example of Funded Traditional Self Insurance tool.
a. Self Insurance and reserves
b. Risk Retention groups
c. Cooperatives
d. Protected Cell companies
Q20. ______ is not an example of self-insurance method of mitigating/financing risk.
a. Self-Insurance and reserves
b. Risk Retention groups
c. Cooperatives
d. Spread Loss Treaties
