BBA 2nd Year 2nd Semester Examination, 2023
Department of Management Studies
University of Rajshahi
Course Code: MGT-208 (Insurance and Risk Management)
Full Marks 70 Time: 3 hours (N.B. Figures in margin indicate full marks. Answer any FOUR
questions.)
1. A) Define the meaning of Underwriting. 3+7+3+4.5 B) Briefly explain the basic
principles of underwriting
C) Identify the major sources of information available to underwriting
D) How does rate making or the pricing of insurance differ from the pricing of the other
products?
2. A) Michael went deer hunting with Edward. After seeing bushes move, Michael quickly fired
his rifle at what he thought was a deer. However, Edward caused the movement in the
bushes and was seriously injured by bullet. Edward survived and later sued Michael on the
grounds that "Michael's negligence was the proximate cause of the injury
Based on the above facts, is Michael guilty of negligence? Your answer must include a
definition of negligence and essential elements of negligence. 9.5+2+4+2
B) Define the meaning of Reslapsa Loquitur.
C) Describe the three categories of legal wrong.
D) Compare between plaintiff and tortfeasor.
3. a) Briefly explain the principle of indemnity and principle of subrogation. 8+6+3.5 B)
Identify and discuss the basic parts of an insurance contract
C) Compare between coinsurance and reinsurance
4. a) What are the various kinds of life insurance policies? 3.5+7+7
b) "Life insurance is insurance against dying too soon and endowment insurance is insurance
against living too long.” Explain.
c) Explain the judgment method and numerical rating system for evaluating risk.
5. a) Define disabilities insurance. 2.5+7+8
b) Explain the process used in obtaining disability coverage.
c) Discuss the duration of benefits of disability insurance,
6. a) What is Insurance Development and Regularity Authority (IDRA)? 3+7.5+7 b)
Discuss the role and objectives of IDRA in the insurance sector of Bangladesh c)
Write a note on Bangladesh insurance act-2010.
BBA 2nd Year 2nd Semester Examination, 2022
Department of Management Studies
University of Rajshahi
Course Code: MGT-208 (Insurance and Risk Management)
Full Marks 70 Time: 3 hours (N.B. Figures in margin indicate full marks. Answer any FOUR
questions.)
1.
A) Analyze briefly the methods of handling risk. 7.5+3+3+4
B) Define risk. In your definition, state the relationship between risk and uncertainty.
C) Distinguish between "Pure risk" and "Speculative risk with example.
D) Risk Management has important objectives state the major objectives of risk
management.
2.
A) Distinguish between "Perils" and "Hazards and give two specific examples of each. 4+4+4.5+5
B) Briefly distinguish among the categories into which hazards may be divided and give an
example of each.
C) With respect to each of the following, indicate whether you would classify the event or
condition as a peril or a hazard: an earthquake, sickness, worry, a careless act, and an economic
depression.
D) Sarah works in a small local company. She owns a small apartment on the third floor and has
several goods in her apartment (Clothes, Computer, Tablet, Smartphone, TV set, etc.) worth
€20,000. She has an old bike, which she uses to commute to the work (she has to pass a small
forest) as well as for recreation purposes. However, she likes riding quite fast and, from time to
time, she hits pedestrians. She has enough money to buy a new bike, but in the past three of
her bikes were stolen. She loves bubble baths and watching soap operas. Unfortunately, she is
impatient-while preparing a bath, she usually watches TV and sometimes she forgets to turn the
tap off after the tub is full.
For each of the following risks, or loss exposures, identify an appropriate risk management
technique that could have been used to deal with the exposure Explain your answer.
i. Theft of her bike.
ii. Flooding of Sarah's apartment and the ones downstairs because she left the water
running in the bathroom.
iii. Liability lawsuit against Sarah arising out of hitting a pedestrian while riding a bike iv.
Total loss of clothes, TV set, computer, tablet, and other personal goods because of
burglary.
v. Damaging the bike's tire in the forest.
vi. Bike's failure resulting in falling down and physical injury.
3. A) Analysis the concept of pooling of losses as one of the basic characteristics of
insurance. 4+3+7.5+3
B) Illustrate the term insurable risk.
C) Compare the risk of (i) fire with (ii) unemployment in terms of how well they meet the
requirements of an insurable risk.
D) What is meant by the law of large numbers.
4. A) What do you mean by reinsurance? 1.5+9+7
B) Discuss the classification of reinsurance.
C) Explain the objectives of double insurance.
5. A) Define disability insurance. 2.5+7+8
B) Explain the process used in obtaining disability coverage.
C) Discuss the duration of benefits of disability insurance.
6. Write short notes: 3.5x5
a) Health insurance
b) Social insurance
c) Unemployment insurance
d) Private insurance
e) Principle of indemnity
BBA 2nd Year 2nd Semester Examination, 2021
Department of Management Studies
University of Rajshahi
Course Code: MGT-208 (Insurance and Risk Management)
Full Marks 70 Time: 3 hours (N.B. Figures in margin indicate full marks. Answer any FOUR
questions.)
1. (a) Explain the meaning of risk. How does objective risk differ from subjective
risk? 4+5+3+5.5
(b) Define chance of loss. What is the difference between objective probability
and subjective probability?
(c) Risk managers use a number of methods for handling risk. For each of the
following, what method for handling risk is used?
i. The decision not to carry earthquake insurance on a firm's main
manufacturing plant.
ii. The installation of an automatic sprinkler system in a hotel.
iii. The decision not to produce a product that might result in a product liability
lawsuit.
iv. Requiring retailers who sell the firm's product to sign an agreement releasing
the firm from liability if the product injures someone.
(d) Several types of risk are present in an economy. For cach of the following
situations identify the type of risk that is present and explain your answer:
i. The department of homeland security alerts the nation of a possible
attack by terrorists.
ii. A house may be severely damaged in a fire.
iii. A family head may be totally disabled in a plant explosion.
iv. An investor purchases 100 shares of Grameen Phone stock.
v. A river that periodically overflows may cause substantial property
damage to thousands of homes in the floodplain.
vi. Home buyers may be faced with higher mortgage payments if the
government raises interest rates at its next meeting
vii. A worker on vacation plays the slot machines in a casino.
2. (a) Define the meaning of underwriting. 3+7+3+4.5
(b) Briefly explain the basic principles of underwriting.
(c) Identify the major sources of information available to underwriters. (d)
How does rate making or the pricing of insurance differ from the pricing of
other products?
3. (a) Discuss the types of the insurance contract. 3.5+7+7 (b) Define insurable
interest, utmost good faith, the principle of indemnity and warranties in
insurance contracts.
(c) Explain how insurable interest, utmost good faith, warranties and proximity
cause are applicable in life insurance.
4. (a) What are the various kinds of life insurance policies? 3.5+7+7 (b) "Life
insurance is insurance against dying too soon and endowment insurance is
insurance against living too long." Explain.
(c) Examine the judgment method and numerical rating system for evaluating
risk.
5. (a) What is the meaning of adverse selection? Identify some methods that
insurers use to control for adverse selection. 6+6+5.5
(b) Buildings in flood zones are difficult to insure by private insurers because the
idea requirements of an insurable risk is difficult to meet.
i. Identify the ideal requirements of an insurable risk.
ii. Which of the requirements of an insurable risk are not met by the flood
peril?
(c) Private insurance provides numerous coverages that can be used to meet
specific loss situations. For each of the following situations, identify a private
insurance coverage that would provide the desired protection:
i. Yeasmin, age 26, is a single parent with two dependent children. She wants
to make certain that funds are available for her children's education if she
dies before her youngest child finishes college.
ii. Jinia, age 16, recently obtained her driver's license. Her parents want to
make certain they are protected if Jinia negligently injures another
motorist while driving a family car.
iii. Jasmin, age, 32, is married with two dependents. She wants her income to
continue if she becomes totally disabled and unable to work.
iv. Mithun, age 36, recently purchased a house for BDT.10 million that is
located in an area where tornadoes frequently occur. He wants to make
certain that funds are available if the house is damaged or destroyed in a
tornado.
v. Shila, age 36, owns an upscale furniture store. She wants to be protected if a
customer is injured while shopping in the store and sues her for the
bodily injury.
6. A) What are the important warranties in marine insurance? 4.5+4+4+5 B)
Discuss the different kinds of marine insurance policies.
C) Mention the clauses of marine insurance policies.
D) What are the procedures for adjusting marine insurance losses? Discuss
BBA 2nd Year 2nd Semester Examination, 2020
Department of Management Studies
University of Rajshahi
Course Code: MGT-208 (Insurance and Risk Management)
Full Marks 70 Time: 3 hours (N.B. Figures in margin indicate full marks. Answer any FOUR
questions.)
1. A) What is principle of utmost good faith? 3.5+7+7
B) Discuss the three important legal doctrines of utmost faith.
C) What is principle of insurable interest? What are the purposes of it?
2. A) What is the difference between peril and hazard? 4+10+3.5
B) Define physical hazard, Morale Hazard, Moral (attitudinal) hazard, and legal
hazard. C) For each of the following, identify the type of hazard.
i. The presence of ice on the road
ii. A motorist drives too fast.
iii. A man fakes an accident to collect money from an insurance.
iv. The new state regulation that requires insurers not paying any claim in case of
suicide.
v. An individual leaves the windows open at home during night.
vi. The age of a human being.
vii. A businessman intentionally burns unsold goods that are not insured. 3. A)
What are the three major section of a balance sheet? What is the balance sheet
equation? 5+6+6.5
B) What type of assets and liabilities appear on the balance sheet of an insurance
company?
C) What is policy holders’ surplus? Based on the following information, determine the
policy holders' surplus for XYZ Insurance Company:
Bonds $250,000,000
Common Stock 80,000,000
Commissions Payable 9,000,000
Other Liabilities 11,000,000
Real Estate 20,000,000
Cash and Short-term Investments 12,000,000
Mortgage-backed securities 30,000,000
Loss Reserves 120,000,000
Unearned premiums 101,000,000
Loss Adjustment Expenses 14,000,000
4. A) Risk management is defined as a "leadership function." What is the definition of risk
management and why should it be considered a leadership function? 5.5+6+6 B)
Describe the steps in the risk management process.
C) Explain the criteria used in evaluating Risk.
5. A) Define disability Insurance. 5+7+5.5
B) Explain the process used in obtaining disability coverage.
C) Discuss the duration of benefits of disability Insurance.
6. A) What is fire waste? What are the causes of fire waste. 6+6.5+5
B) Discuss the moral hazards and natural hazards in fire Insurance. in what way they
affect the calculation of risk?
C) A house worth Tk. 45,00,000 was insured for Tic. 30,00,000 under an average policy.
The house was destroyed by fire and actual loss was estimated at Tk. 20,00, 000.
How much can the Insured recover from the Insurer?
BBA 2nd Year 2nd Semester Examination, 2019
Department of Management Studies
University of Rajshahi
Course Code: MGT-208 (Insurance and Risk Management)
Full Marks 70 Time: 3 hours
(N.B. Figures in margin indicate full marks. Answer any FOUR questions.) 1. A)
plan the meaning of Risk. How does objective risk differ from subjective risk?
3+4+3+4
B) Define chances of loss What is the difference between objective probability
and subjective probability?
C) Risk managers use a number of methods for handing risk, for each at the
following what method for handling risk is used?
i. The decision not to carry earthquake insurance on a farms main
manufacturing plant.
ii. The installation of an automatic sprinkler system in a hotel.
iii. The decision not to produce a product that might result in a product
liability lawsuit.
iv. Requiring retailers who sell the farm's product to sign an agreement
releasing the farm from liability if the product injures someone.
D) Several types of risk are present in an economy. For each of the following situations
identify the type of risk that is present and explain your answer.
i. The department of Homeland security alerts the national of a possible attack
by terrorists.
ii. A house may be severely damaged in a fire.
iii. A family head may be totally disabled in a plant explosion.
iv. And investor purchases 100 shares of Grameenphone stock.
v. A river that periodically overflows main cause substantial property damage to
thousands of homes in the floodplain.
vi. Home buyers may be faced with higher mortgage payments if the
government rises interest rates at its next meeting.
vii. A worker on vacation plays the slot machines in a casino.
2. A) What is the meaning of adverse selection? Identify some methods that ensure use of
control for adverse selection. 5+5+4
B) Building in food zones are difficult to insure by private insurers because the ideal
requirements of an insurable risk is difficult to meet.
a) Identify the ideal requirements of an insurable risk.
b) Which of the requirements of an insurable risk are not met by the flood
peril? C) Explain the law of large numbers.
3. A) Identify and explain the most important insurance company operations. 4+2+4+4
B) Briefly explain the other functions done by insurance company.
C) Explain the risk included in financial risk management.
D) Explain the risk included in enterprise risk management.
4. A) Explain the meaning of an insurable interest. Why is an insurable interest required in
every insurance contract? 7+4+3
B) Explain the principle of indemnity.
C) Jack borrowed $800,000 from the gateway Bank to purchase a fishing boat. He keeps
the boat at a dock owned by Harbor Company. He uses the boat to earn income by
fishing. Jack also has a contract with the white shark fishing company to transport tuna
from one port to another.
Does any of the following parties have an insurable interest in Jack or his property? If an
insurable interest exists explain the extent of the interest.
(1) Gateway Bank
(2) Harbor company
(3) White shark fishing company.
5. A) Define insurance. 7+4+3
B) Do you think that insurance is a cooperative device to minimize risk?
C) What are meant by loss, peril, and hazard?
6. A) What do you mean by reinsurance? 3+ 7+4
B) Discuss the classification of reinsurance.
C) Discuss the objectives of double insurance.
7. A) What is meant by fire insurance? 3+8+3
B) Discuss the implicit orientation of fire insurance.
C) What do you mean by net single premium?
