IC S01 - Exam Principles And Practice Of Insurance And Survey And Loss Assessment-45

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Q 1. How are warranties and conditions treated in insurance law?

a) Warranties are optional provisions, while conditions are mandatory.

b) Warranties are material to the risk, while conditions may not be.

c) Breach of either allows the insurer to avoid a claim any time after the breach.

d) Warranties are always expressed, while conditions may be implied.

e) Warranties give the insured the right to damages, while conditions affect the validity of the contract.

Q 2. Which technique for controlling business risks involves proper planning of production, efficient operation of plant and equipment, and provision for adequate supply of raw materials?

a) Diversification

b) Market research

c) Functional management

d) Geographic location

e) Economic enterprise

Q 3. Within how many days from the date of transfer should the transferee apply for necessary changes in the Certificate and the Policy?

a) 30 days

b) 60 days

c) 14 days

d) 90 days

e) No time limit

Q 4. How is the depreciation applied to rubber, nylon, plastic parts, tires and tubes, batteries, and airbags in the case of partial losses?

a) 10%

b) 25%

c) 30%

d) 40%

e) 50%

Q 5. Which provision allows the insurer to take over the interest of the assured in marine insurance?

a) Condition 15 of the standard fire policy

b) Section 79 of the Marine Insurance Act, 1963

c) The insured's cooperation clause

d) The principle of indemnity

e) The insurer's discretion clause

Q 6. What does the full sum insured condition require the insured to do throughout the policy period?

a) Increase the sum insured over time to match the appreciation in the value of the insured property.

b) Decrease the sum insured if the value of the insured property decreases.

c) Maintain the sum insured at the same level throughout the policy period.

d) Allow the sum insured to lapse if the insured property remains unchanged.

e) Pay an additional premium if the sum insured exceeds the actual value of the insured property.

Q 7. What hazard is posed by weakened upper floors in a building?

a) Reduced risk of collapse in lower floors.

b) Increased accessibility to upper floors for fire-fighting.

c) Increased stability of the building structure.

d) Additional weight thrown on the floor below, leading to potential collapse.

e) Reduction in water pressure for fire-fighting.

Q 8. How many members are there in the Insurance Advisory Committee, excluding ex-officio members?

a) 10

b) 15

c) 20

d) 25

e) 30

Q 9. According to the Insurance Act of 1938, what is a prerequisite for the assumption of cover by insurers?

a) Issuance of the policy document

b) Submission of the claim form

c) Approval from the regulatory authority

d) Prior payment of premium

e) Signing of the contract

Q 10. Why does an insurer prefer to obtain a valid survey report for reported losses of values less than 50,000?

a) To avoid processing claims

b) To assess the professionalism of the surveyor

c) To settle or repudiate the claim based on technical support

d) To increase claim settlement time

e) To reduce the workload of the insurer

Q 11. When inspecting a property suffering a loss, what is the primary purpose?

a) Identifying potential fraud

b) Estimating the cost of repairs

c) Verifying the extent of loss and insurable interest

d) Recommending changes to insurance policies

e) Reviewing lease agreements

Q 12. What action can the insurer take in case of a breach of warranty?

a) Offer a grace period for the insured to rectify the breach.

b) Increase the premium for future coverage.

c) Compensate the insured regardless of the breach.

d) Avoid the claim entirely.

e) Request additional information from the insured.

Q 13. Which method of valuation is not typically used by accountants for depreciating assets?

a) Straight line method

b) Declining Balance method

c) Sum of years digits method

d) Sinking fund method

e) Present worth method

Q 14. What does condition 6 of the fire policy, known as the Right of Entry condition, provide for?

a) It allows the insured to deny entry to the insurer

b) It grants the insured the right to claim additional benefits

c) It provides the insured with the right to enter the insurer's premises

d) It gives the insurer the right to enter the premises to ascertain the cause and extent of loss

e) It allows the insured to dispose of damaged property without inspection

Q 15. Why is there no standard format for presenting the final survey report according to the text?

a) To confuse the insurer and insured parties

b) To allow surveyors flexibility in data collection and presentation

c) To increase the workload for surveyors

d) To delay the claims settlement process

e) To minimize the importance of the report


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