IC85 REINSURANCE MANAGEMENT EXAM - 16

Que. 1 : Q1) Statement A : Disclosure of material facts operate only upto the time the contract is concluded but under a treaty, something more is required. Statement B : Principle of indemnity is an integral part of reinsurance contract, even though the original contract may not have a pure indemnity. Which of the above statements is true?

   1.  a) Statement A

   2.  b) Statement B

   3.  c) Both the statements

   4.  d) None of the above.

Que. 2 : Q2) Which of the following risks is beyond the control of the contractual parties under Reinsurance contract?

   1.  a) Rate of Foreign Exchange

   2.  b) Inflation

   3.  c) Monetary Policy of countries of the contracting parties.

   4.  d) All of the above.

Que. 3 : Q3) What is the main reasons for in demand for ART products?

   1.  a) Higher reinsurance prices driven primary by a shortage of capacity in the retrocession market

   2.  b) Increased fluctuations in the financial market

   3.  c) Exploitation of tax and regulatory asymmetries

   4.  d) For providing multi year covers to securitization of risk and derivatives

Que. 4 : Q4) Function of Reinsurance is not …..

   1.  a) To increase the capacity of the Insurer.

   2.  b) To facilitate the financial stability of the Insurer.

   3.  c) To facilitate the stabilization of claim ratio.

   4.  d) To facilitate in accumulation of claims.

Que. 5 : Q5) For which of the following reasons does'direct writing insurance companies' start to write inward reinsurance business?

   1.  a) To increase payment of claim amount

   2.  b) To achieve a lower income ratio by the maintenance of the volume of premium income

   3.  c) To obtain a better and wide spread of business by writing business from overseas

   4.  d) To spend investment income, which is derived from cash flow resulting from inward acceptances