ICS01 Principles and Practice of Insurance and Survey and Loss Assessment Mock Test 19
These questions cover fundamental principles of insurance, business risk management, indemnity, fidelity guarantee insurance, under-insurance, risk assessment, consumer protection, criminal breach of trust, claim assessment, and the responsibilities of surveyors and loss assessors. Important concepts include the consequences of breaching a warranty, methods of managing business risks, and the principle of indemnity in making good a loss. The questions also examine the nature of fidelity guarantee contracts, the pro-rata average condition, factors affecting fire risks from premises layout, features of the Consumer Protection Act, penalties for criminal breach of trust by bankers or public servants, information gathering during claims assessment, and the professional role of surveyors.
Q1. What is the consequence of breaching a warranty in insurance?
a) The insurer must offer a premium refund to the insured.
b) The contract becomes voidable from inception.
c) The insured is entitled to double the coverage amount.
d) The insurer is obligated to renegotiate the terms of the policy.
e) The insured may request a policy extension.
Q2. How are business risks typically managed?
a) Through insurance policies
b) By avoiding or controlling them through general and functional management strategies
c) By transferring them to insurers
d) By accepting them as inevitable
e) By investing in high-risk ventures
Q3. According to the principle of indemnity, how should a loss be made good under an insurance policy?
a) By maximizing the insured's profit
b) By ensuring the insured is worse off financially
c) By fully compensating the insured for the loss
d) By ignoring the loss completely
e) By making the insured financially better off
Q4. What type of contracts are Fidelity Guarantee insurances?
a) Contracts of suretyship
b) Contracts of speculative investment
c) Contracts of partial indemnity
d) Contracts of liability insurance
e) Contracts of indemnity
Q5. How does the pro-rata average condition affect the insured in case of under-insurance?
a) The insured receives compensation equivalent to the full value of the property regardless of the sum insured.
b) The insured is exempt from bearing any portion of the loss.
c) The insured is penalized by having their claim reduced proportionately.
d) The insured is reimbursed for any additional premium paid due to under-insurance.
e) The insured is not required to pay any premium for under-insured property.
Q6. What aspects are considered for analyzing risk factors arising from the layout?
a) Aesthetic appeal and architectural design.
b) Employee satisfaction and workplace comfort.
c) Location of premises, size of the building, segregation of hazardous processes, and distribution of fire fighting equipment.
d) Production efficiency and machinery maintenance.
e) Cost of construction and building materials.
Q7. Which of the following is NOT a salient feature of the Consumer Protection Act?
a) Compensatory nature of provisions
b) Establishment of Consumer Protection Councils
c) Exemption by the Central Government for certain goods and services
d) Establishment of a three-tier quasi-judicial machinery
e) Applicability to all sectors - private, public, or cooperative
Q8. What punishment does Section 409 of the Indian Penal Code prescribe for a public servant or a banker who commits criminal breach of trust?
a) Imprisonment for life
b) Imprisonment for ten years
c) Imprisonment for seven years
d) Imprisonment for three years
e) Fine only
Q9. What is the primary focus of conferring with the insured or their authorized representative during a claim assessment?
a) Planning future vacations for the insured
b) Collecting information needed for future use in the loss assessment
c) Discussing unrelated topics to build rapport
d) Negotiating settlement terms with the insured
e) Recording details of the insurer's liabilities
Q10. What responsibility does a Surveyor and Loss Assessor primarily hold?
a) Marketing insurance policies to potential clients
b) Investigating, managing, and quantifying losses arising from contingencies
c) Conducting market research for insurance companies
d) Providing legal advice to policyholders
e) None of the above
