Principle of Insurance & Loss Assessments MCQ
1) Settlement of claims is an important function of which organization ?
Mutual Fund organization
Insurance organization
NGO's
Service organization
Govt. organization
2) Which part of the insurance policy introduces the Insurer and Insured ?
Heading
Preamble
Operative Clause
Contractual Clause
Signature
3) With rapid changes in the insurance sector and increased competition, what
should the insurance companies do to stand out ?
Organise camps
Recruit more agents
Increase channel selling
Product differentiation
Miselling
4) IRDA premium investment guidelines state that investments in Central
Government Securities should not be less than ______ .
10%
20%
30%
35%
No such guidelines
5) ________ is the primary source of income for an insurer.
Commission
Dividend
Bonus
Premium
Remuneration
6) A co-payment or co-pay is a term used in ________ .
Wealth insurance
Health insurance
Marine insurance
Fire insurance
Term insurance
7) Which of these is an example of Dynamic Risk ?
Eruption of volcano
Gambling
Rupee fluctuations
Train Accident
Stock Market trading
8) Which words are dissimilar from other four options –
Life Insurer – Policy holder
Partners in business
Brother – Sister
Creditor – Debtor
Cargo owners – Goods in transit
9) The full form of MACT is _________ .
Motor & Aviation Claim Tribunal
Major Accident Claim Tribunal
Minor Accident Claim Tribunal
Motor Accident Claim Tribunal
Maximum Action Core Team
10) Loss of Profits' insurance falls under _______ category .
Personal insurance
Miscellaneous insurance
Marine cargo insurance
Fire insurance
Life insurance
11) Non Life Insurance business in India is classified into which of these major
categories - A) Fire , B) Auto , C) Marine , D) Miscellaneous.
A, B, C
A, B, C, D
A, B, D
A, C, D
B, C, D
12) What is the controller of insurance currently called in India ?
Insurance Ombudsman
Insurance institute of india
IRDAI
Insurance council
Insurance Association
13) How can one assess if an insurance company will be able to meet its claims or not
?
Price Earning Ratio
Profitability of the company
Share Capital of the company
EBITA %
Solvency Ratio
14) _________ is issued immediately as a conclusive evidence that the insurer has
received the assignment request by the policyholder.
Policy acknowledgement
Acknowledgement letter
Cover Note
Form 5 A
Form 25
15) The Free look period is for ________ days from the date of receipt of the policy
document under a term insurance policy.
15
30
45
16) Intelligent Agent Technology
Investment Analysis Team
Indian Actuaries Tribunal
Insurance Appellate Tribunal
Internal and Applied Taxes
17) An appeal against the order of National Commission can be made in the Supreme
Court with a period of _____ .
7 days
10 days
30 days
45 days
60 days
18) Appeal in National Commission can be made subject to deposit of ______ of the
amount awarded or _____ which ever is less.
10% , Rs 35,000
20% , Rs 35,000
30% , Rs 35,000
40% , Rs 35,000
50% , Rs 35,000
19) Regulations for micro insurance provide for a tie-up between ________ and
_______ .
Insurer and Agents
Agents and Insured
Low income people and Insurers
Bonus holders and Company
Life insurer and Non life insurer
20) The value of a building is Rs 6,00,000 and this building has been insured for Rs
3,00,000. There was a loss of Rs 1,00,000. As the sum assured is Rs 3,00,000, the
amount of claim of Rs 1,00,000 should be paid in full. Give your judgement.
A claim of Rs. 150000 should be paid
A claim of Rs 50,000 should be paid
The calculation is correct. Rs 1,00,000 should be paid
The calculation is correct only if the value of building is Rs 800000
The calculation is correct because the claim can be paid in full but not more than the
loss
21) An insurance company, Sun Insurance Co. claims that if the loss is proximately
caused by an excepted peril, there is no liability under the policy. Is this argument
valid ?
No, its not valid as there is no such provision in the insurance law
No, its not valid as there cannot be an ‘excepted peril’
Yes, Sun Insurance Co. is correct in its claim
Cannot say as it depends which rules of interpretation are applied to the words in
the contract
Cannot say as it depends on the wordings of the contract
22) Which are the two types of treaty reinsurance ?
Facultative and Non Facultative
Long term and Short term
Reversible and Irreversible
Single and Dual
Proportional and Non-proportional
23) A non-hazardous shop wants to stock crackers during the Diwali season. What
conditions will apply?
The insurer will charge additional special premium
In such cases an additional add-on is required
First, an application has to be made to its insurer
First, an application has to be made to its insurer and the insurer will approve it if
IRDAI approves it
A loading shall be charged on the rates applicable to contents
24) Mr. Sadashiv is a sugar baron and has two factories - A Sugar Mill (Rs. 1.50 per
millee) and Distillery (Rs. 2.50 per millee). Both the factories are situated in the
same compound. How will the ratings be done?
The ratings will be done at their individual respective rates
The ratings will be done at the highest rate among the two i.e. at Rs. 2.50
The ratings will be done at the lowest rate among the two i.e. at Rs. 1.50
The ratings will be done by adding the two rates of Rs. 2.5 and Rs. 1.5 - that is at
Rs. 4
The ratings will be done at an average rate of Rs. 2.5 and Rs. 1.5 - that is at Rs. 2
25) The surveyor is provided with copies of policies before proceeding for survey.
However, in ________, he may even proceed without a copy of the policy.
Out of Station losses
Local losses
Small losses
Medium losses
Large or serious losses
26) Saraswati Trust is the owner of a private school and college and is planning to
take an 'Loss of Profit' policy. However, they are advised to go for a Revenue
Policy instead. Guide them -
No, Schools cannot take Revenue Policies
No, Revenue Policies are ideal for manufacturing sector
No, Schools should go for a Dual Insurance
Yes, they should go for a Revenue Policy
No, Revenue Policies are meant only for Chartered Accountants
