IC72 - Motor Insurance Exam -6

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Q 1. Why was the creation of the Motor Third Party Pool mandated by the IRDAI?

A) To encourage differentiation of motor insurance products.

B) To ensure policyholder rights were protected during the detariffing process.

C) To facilitate competition among insurers in the motor insurance market.

D) To provide a platform for insurers to share losses related to Third Party Insurance.

E) None of the above.

Q 2. Which add-on cover protects the No Claim Bonus (NCB) earned on the vehicle if not more than 1 claim is made during the policy period, provided the renewal is affected on or before 90 days of the expiry of the policy?

a) Return to invoice

b) No Claim Bonus Protection

c) Depreciation reimbursement

d) Repair of glass, rubber, fiber & plastic parts

e) Emergency transport and hotel expenses

Q 3. When is a vehicle exempted from compulsory third-party insurance?

a) When it is owned by a private individual

b) When it is owned by a local authority

c) When it is owned by a State Transport undertaking

d) When it is owned by the Central or State Government and used for non-commercial purposes

e) When it is used for Government purposes connected with any commercial enterprise

Q 4. What is the purpose of Section 163A in the Motor Vehicles Act, of 1988?

a) To provide immediate relief to accident victims

b) To establish fault liability in accidents

c) To determine compensation based on negligence

d) To regulate insurance premiums

e) None of the above

Q 5. How does the pooling arrangement work in the Motor Third Party Pool?

A) Insurers collectively participate in sharing all motor third-party insurance business.

B) Each insurer independently determines its participation in the pooling arrangement.

C) The pool administrator decides which insurers participate in the pooling arrangement.

D) Only public sector insurers are required to participate in the pooling arrangement.

E) None of the above.

Q 6. Which add-on cover allows the insured to repair glass, rubber, fiber, and plastic parts instead of replacing them without affecting the No Claim Bonus (NCB)?

a) Depreciation reimbursement

b) Return to invoice

c) Repair of glass, rubber, fiber & plastic parts

d) Loss of personal belongings

e) Key replacement

Q 7. What is the purpose of the "Avoidance of certain terms and right of recovery" clause in a motor insurance policy?

a) To restrict the rights of the insured in case of a claim

b) To ensure the insurer's right to recover from third parties

c) To allow the insured to admit fault and compromise the amount of recovery

d) To exclude certain types of claims from coverage

e) None of the above

Q 8. What is the purpose of Section 161 in the Motor Vehicles Act, of 1988?

a) To provide compensation in hit-and-run accidents

b) To regulate traffic rules

c) To establish fault liability in accidents

d) To determine compensation based on negligence

e) None of the above

Q 9. What is the role of the General Insurance Council of India in the Motor Third Party Pool?

A) Laying rules and procedures for underwriting, accounting, and settlement.

B) Determining premium rates and terms for Third Party Insurance.

C) Administering the pool and processing claims.

D) Setting up the multi-lateral reinsurance arrangement.

E) None of the above.

Q 10. Which add-on cover provides coverage for loss of personal belongings in the insured vehicle due to perils covered under the Own Damage section of the policy, following an accident to the insured vehicle?

a) Engine protector

b) Loss of personal belongings

c) Key replacement

d) Daily allowance

e) Spot Assistance

Q 11. What is the duty of insurers under Section 149 of the 1988 Act when a judgment for compulsory third-party liability is obtained against an insured person?

a) They can avoid paying the judgment if they cancel the policy.

b) They have to pay the amount decreed, plus costs and interest, subject to the sum insured.

c) They can avoid paying the judgment if they prove negligence on the part of the insured.

d) They must pay only if the insured person is not disqualified from obtaining a driving license.

e) They are not obligated to pay any judgment against the insured person.

Q 12. What does the term "just compensation" imply in the context of motor vehicle accidents?

a) Compensation that is arbitrarily determined

b) excessive Compensation

c) Compensation that is equitable and reasonable

d) Compensation that is based solely on fault

e) None of the above

Q 13. Why was the creation of the Declined Risk Pool introduced?

A) To provide an option for insurers to choose which liabilities they bear entirely.

B) To encourage insurers to cover vehicles considered high risk.

C) To centralize the underwriting of all commercial vehicle insurance.

D) To eliminate supply-side constraints on the availability of insurance covers.

E) None of the above.

Q 14. What term is used to describe the practice of offering new motor insurance covers in India after de-tariffing, which aligns with international practices?

a) Globalised motor insurance in India

b) International motor insurance business

c) Underwriting strategy in India

d) Long-term underwriting policy

e) Risk profiling in India

Q 15. When can insurers defend an action against them after receiving notice through the Court or the Claims Tribunals?

a) Only if they can prove the insured's innocence.

b) If there has been a breach of a specified condition of the policy.

c) Only if they can demonstrate the negligence of the third party.

d) If they have canceled the policy before the proceedings.

e) When the insured person is disqualified from obtaining a driving license.


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