Que. 1 : Q1) Insurance company expenses associated with the settlement of claims, as distinguished from the marketing, investment or general administrative operations, are referred to as ___________.
1. a) Expenses
2. b) Loss adjustment expenses
3. c) Allocated loss adjustment expenses
4. d) Unallocated loss adjustment expenses
Que. 2 : Q2) Which of the following formula is correct?
1. a) T = 1-V-Q / 1+G
2. b) T = 1+V+Q / 1+G
3. c) T = 1-V+Q / 1-G
4. d) T = 1+V-Q / 1-G
Que. 3 : Q3) Which of the following equations is incorrect?
1. a) Assets = Liabilities + Owner’s Equity
2. b) Revenue = Income + Expenses
3. c) Contributed Capital = Owner’s Equity + Retained earnings
4. d) Income = Change in Assets – Change in Liabilities – Change in Contributed Capital + Dividends to owner
Que. 4 : Q4) Severity is:
1. a) Total amount of loss in an accounting year.
2. b) Highest possible amount of loss.
3. c) Average loss per unit.
4. d) Largest amount of loss occurred in an accounting year.
Que. 5 : Q5) Which of the following equations is incorrect for a non-life insurance company:
1. a) Incurred losses = paid losses + change in outstanding claims
2. b) Owner’s equity = contributed capital + retained earnings
3. c) Income = Change in earnings + dividends
4. d) Retained earnings = Assets — Liabilities — Contributed capital