IC85 REINSURANCE MANAGEMENT EXAM - 08
| Q1.Which of the option is true regarding “Retention”? (i) An application of retention is a contractual clause included in many insurance policies. (ii) The purpose of the retention clause is to specify what portion of any potential damages will need to be paid for by the policyholder. (iii) Retention is a combination of the financial consequences of risk and event-based losses. |
| Only I |
| Both II and III |
| Only II |
| All I, II, and III |
| Q2.While preparing a summary sheet in the case of reciprocal exchange, which of the following information is not included? |
| adequacy of rate |
| commissions |
| incurred claims |
| net results |
| Q3.Why would insurers wish to go in for reinsurance business than for direct business to supplement their growth? |
| Due to several reasons like renovations or economic prosperity in various countries of the world, insurers may wish to go in for reinsurance business than for direct business to supplement their growth |
| Due to several reasons like statutory regulations or economic prosperity in various countries of the world, insurers may wish to go in for reinsurance business than for direct business to supplement their growth |
| Due to several reasons like politics or economic prosperity in various countries of the world, insurers may wish to go in for reinsurance business than for direct business to supplement their growth |
| Due to several reasons like statutory regulations or economic depression in various countries of the world, insurers may wish to go in for reinsurance business than for direct business to supplement their growth |
| Q4.____ is not the primary objective of reinsurance. i) Limitation of liability of an amount which is within the financial capacity of the insurer ii) To ensure that it is not placed at a serious disadvantage compared to its competitors iii) To secure technical assistance in rating, terms, and conditions of cover and processing of claims |
| Only (i) |
| Only (ii) |
| Only (iii) |
| All (i), (ii), & (iii) |
| Q5.___is the process of identifying, measuring, and communicating financial information to permit informed judgment and decisions by users of the information |
| reinsurance finance |
| reinsurance accounting |
| overriding commission |
| flat rate commission |
| Q6.A reinsurer would always want to know who the underwriter is. Do you think this is valid? |
| No, it is applicable only to proportional reinsurances |
| No, this is not a valid statement |
| Yes, this is a valid statement |
| It depends on the intentions of the insurer |
| Q7.ABC Ltd. wants you to design a sentence that would describe a feature of ICRA. |
| It is a well-known credit rating agency in Africa |
| It is a well-known credit rating agency in the U.S.A |
| It is a well-known credit rating agency in India |
| It is a well-known credit rating agency in Australia |
| Q8.As a re-definition, the intermediaries like brokers have started marketing new or enhanced products and services known as __. |
| Risk Management Professionals |
| Dynamic Financial Analysis and modeling |
| Composite companies |
| Captive companies |
| Q9.Categorize the term ''Risk Excess''. |
| It operates on an arrangement basis |
| It operates on a non-proportional basis |
| It operates on a proportional basis |
| It operates on a singular basis |
| Q10.Concentration of risks in one class of business or one geographic area must be |
| Increased |
| Reduced |
| Minimized |
| Centered in one area only |