IC01 (LICENTIATE) Principles of Insurance - 06

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Q1.Any transaction by an NRI with respect to buying an insurance policy will be subject to the rules laid down in ___.
 The limitation act
 Foreign exchange management act
 Inheritance laws
 Transfer of property act
 The Negotiable instruments act
 
Q2.The actual loss arising out of a __ includes costs of repair, replacement or reinstatement, and consequential losses.
 risk
 hazard
 peril
 accident
 None of the above
 
Q3.Outline the activities in sequential order in the process of Risk Management: A) Checking the credibility of the data B) Analyzing the risk C) Identifying the Risk D) Using MPL and PML to analyze the risk.
 B,D,A,C
 C,A,B,D
 A,B,C,D
 C,B,D,A
 D,A,C,B
 
Q 4.What is excess of loss?
 An arrangement where a number of insurers agree to pool premiums and claims are met out of the pool
 An arrangement where the reinsurer has the option to decide the terms of acceptance
An arrangement where the reinsurer steps in only when there is a loss in excess of the specified limit
An arrangement which becomes operational when the net claims ratio of the direct insurer in a financial year exceeds a specified limit
 An arrangement where the reinsurer insures himself with another insurer or reinsurer
 
Q5.Mr. Mohit is an exporter and wants insurance for his consignments which are shipped regularly. He does not want the hassles of creating different insurance proposals for each consignment, so he will opt for __.
 Time or Voyage policies
 Cover notes
 Open policy
 Specific Policy
The actual total loss policy
 
Q6.Which of the following sentence is incorrect with reference to the powers of IRDA to protect the interest of policyholders ?
Defines the manner in which premium can be paid by a policyholder for purchasing an insurance
 Guidelines for assignment or transfer of policies and nominations
 Regulate maintenance of solvency
Monitor contents of advertisements to ensure that they do not misguide
 Regulate the investment of funds
 
Q 7.When the General Insurance Business Act was amended in 1999, the GIC was made ___.
 A life insurer
 A general insurance council
 National reinsurer
 A general insurer
 None of the above
 
Q8.Why should one keep an extra spare of important units in a factory?
It is cheaper to buy in bigger quantities so as to save costs
 It helps training new recruits about how they operate
 It helps in building similar units in future
 It helps in reducing delays in repairs to the minimum and thereby cut losses
 None of the above
 
Q9.Which of these statements is INCORRECT with respect to an insurance policy document?
 The policy becomes void if the original insurance policy document is lost or destroyed
 The policy is the proof of the contract
The policy document states the obligation of the policyholders
The policy document states the terms and conditions of the contract
 The policy document gives details of the promises of the insurer
 
Q10.Which of these words closely matches money or finances?
 Pecuniary
 Actuary
 Underwriter
 Fidelity
 Solvency

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