IC45 GENERAL INSURANCE UNDERWRITING - 07
| Q1.In Fire insurance, ____ can be issued on properties whose market value cannot be as ascertained. |
| a) Increasing policies |
| b) Valued policies |
| c) Floating polices |
| d) None of these |
| Q2.Which of the following formulas is correct? |
| a) Expense ratio = Underwriting expenses x 100 / Written premium |
| b) Expense ratio = Written premium x 100 / Underwriting expenses |
| c) Expense ratio = Incurred losses x 100 / Written premium |
| d) None of these |
| Q3.____ is the method of choice for managing the complexity introduced by using additional variables. |
| a) Rate making |
| b) De-tariffing |
| c) Regulatory requirements |
| d) Data mining |
| Q4.Which rated products include all such insurance products of the insurer, for which premium is determined via grouping, classifying, and loss-making factors that can be easily identified and quantified? |
| a) Class rated products |
| b) Individual rated products |
| c) Group rated products |
| d) None of these |
| Q 5. Which of the following is correct about High exposure areas where adverse results can appear? |
| a) Loss reserves are not correctly computed |
| b) Requires tighter control on claim assessors |
| c) Introducing deductibles or increasing them |
| d) New rates need to be competitive in the market with other insures |
| Q6.The policy that covers any risk which the contract does not specifically exclude is called: |
| a) All Risks insurance cover |
| b) All-purpose cover |
| c) All peril policy |
| d) None of the above |
| Q7.I) It is an important document in the process of reinsurance. II) It is a statement provided by the primary insurer III) It also consists of premiums ceded and claims reported. Does it refer to? |
| a) Portfolio management |
| b) Bordereaux |
| c) Reinsurance |
| d) Treaty slips |
| Q8.According to______, if the risk of loss can be spread over a large enough group, the financial loss resulting from the loss to the members can be paid from the premium collected in the pool, if the premium so collected reflected the risk affecting the group. |
| a) Risk transfer |
| b) Risk sharing |
| c) Pooling of risk |
| d) Law of large numbers |
| Q9.Which can increase the risks for the insurer and create a premium deficiency situation which can have undesirable consequences? |
| a) Underwriting |
| b) Insurance documentation |
| c) Endorsements |
| d) Commercial considerations |
| Q10.The process of underwriting involves how many basic functions? |
| a) 1 |
| b) 2 |
| c) 3 |
| d) 4 |