Q 1. Which independent agency’s services are used to assess property losses ?
Insurance Agents association
TPA's
Claim technician
Actuaries
Surveyor and loss assessor
UnAttempted
CORRECT ANSWER:
Surveyor and loss assessor
Explanation:
Engineer surveyors specialising in property, assess the risks associated with fire, explosion, storms etc to a building and / or contents
based on processes and activities that take place and other features specific to the location.
Q 2. What is the kind of protection under which the cumulative effect on the insurer due to losses under
various policies will be ascertained ?
Per risk protection
Per premium protection
Per insurance protection
Per event protection
Per damage protection
UnAttempted
CORRECT ANSWER:
Per risk protection
Q 3. _________ is the minimum and maximum amount of sum assured allowed for Industrial All Risks
insurance.
100000 - 10,00,000
10,00,000 - 1,00,00,000
1,00,00,000 - 50,00,00,000
50,00,00,000 - 100,00,00,000
100,00,00,000 and above
UnAttempted
CORRECT ANSWER:
100,00,00,000 and above
Explanation:
The Industrial All Risks insurance policy is designed for industrial risks with an overall sum assured of Rs 100 crore and above.
Q 4. Which form has to be filled by the proposer for furnishing all material information required by the
insurer in respect of a risk in order to enable the insurer to decide whether to accept or decline the
insurance proposal ?
Inquiry Form
Application form
Registration form
Proposal form
Agreement form
UnAttempted
CORRECT ANSWER:
Proposal form
Q 5. How is the fire insurance for residential properties classified ?
Simple Risk
Dynamic Risk
Hazardous Risk
Storage Risk
Institutional Risk
UnAttempted
CORRECT ANSWER:
Simple Risk
Q 6. What is the consignment called which is sent by registered parcel post ?
Air consignment
Postal consignment
Land consignment
Speed consignment
Other modes of consignment
UnAttempted
CORRECT ANSWER:
Postal consignment
Q 7. Under the Motor third party insurance, the compensation for death claims to a pedestrian is _________
.
Rs 5000
Rs 25000
Rs 50000
Rs 100000
Rs 500000
UnAttempted
CORRECT ANSWER:
Rs 50000
Explanation:
Under Motor Vehicles Act 1988 the amount of compensation payable is Rs 50000 for death and Rs 25000 for permanent disablement of
any person resulting from an accident arising out of the use of motor vehicle.
Q 8. Who receives the complaints in respect of repudiation of claims by an insurer ?
Agents
Insurance Brokers
Insurance Companies
Judge
Ombudsman
UnAttempted
CORRECT ANSWER:
Ombudsman
Explanation:
An Ombudsman is quasi judicial person who hears complaints for repudiation of claims.
Q 9. Whose functions are identification and acceptance of risk based on factual information, evaluation
and acceptance ?
Underwriters
TPAs
Surveyors
Agents
Brokers
UnAttempted
CORRECT ANSWER:
Underwriters
Explanation:
Underwriters identify risk, calculate, evaluate and decide on acceptance.
Q 10. The maximum validity of a cover note in motor insurance is _____ days
10
20
25
45
60
UnAttempted
CORRECT ANSWER:
60
Explanation:
A Cover Note is a document issued in advance of the policy. It is issued when the policy cannot for some reason or other, be issued
straightaway.
A Cover Note is temporary and is generally valid for 15 days. It can be extended for a further period of 15 days at a time, but in no case
the total period of validity of a Cover Note shall exceed two months (60 days).
Q 11. Business risk is a / an ____________ risk.
Catastrophic
Controllable
Non Controllable
Insurable
Non Insurable
UnAttempted
CORRECT ANSWER:
Non Insurable
Explanation:
Business risks are commercial risks, these risks are normally associated with speculative or dynamic risks and are usually regarded as
being uninsurable.
Q 12. Speculation risk is also known as __________
Stock Market risk
Insured risk
Trade risk
Business risk
Declined risk
UnAttempted
CORRECT ANSWER:
Trade risk
Q 13. On what does the Carriage of goods by sea act determine the liability ?
Marine port warehouse receipt
Transporters challan
Airways bill
Bill of Lading
Railway receipt
UnAttempted
CORRECT ANSWER:
Bill of Lading
Explanation:
A bill of lading is a legal document between the shipper of goods and the carrier detailing the type, quantity and destination of the goods
being carried.
Q 14. __________ can intervene in the affairs of an insurer.
RBI
Finance Ministry
State Government
Policy holder
IRDAI
UnAttempted
CORRECT ANSWER:
IRDAI
Q 15. From the given options, the renewal notice is effected by _________ .
payment of penalty
payment of renewal charges
payment of premium
payment of bonus
payment of insurance charges
UnAttempted
CORRECT ANSWER:
payment of premium
Explanation:
A Renewal Notice is sent one month in advance of the date of expiry, inviting renewal of policy. As per statutory provisions, no risk can
be assumed unless premiums are paid in time.
Q 16. The special declaration deposit premium of 100% of the premium on the sum insured is based on the
___________ (marine insurance).
Estimated next year's turnover
Current year's turnover
Previous year's turnover
Last two year's turnover
First year's turnover
UnAttempted
CORRECT ANSWER:
Previous year's turnover
Explanation:
When a Special Declaration Policy is issued, sum insured is based on previous years turnover or in case of fresh proposal, on a fair
estimate of annual dispatches.
Q 17. What is the final process know as where the selected techniques have to be implemented by the firm
through the different functional managers ?
Management of Risks
Voluntary deductibles
Risk retention
Implementation
Risk evaluation
UnAttempted
CORRECT ANSWER:
Implementation
Q 18. Which social peril is included in Standard fire insurance ?
Explosion
Lightning
Landslide
Floods
Riot
UnAttempted
CORRECT ANSWER:
Riot
Explanation:
Fire Perils include :
Fire.
Explosion / implosion.
Aircraft damage.
AOG perils.
Lightning. Storm, cyclone, tempest, hurricane, tornado & flood.
Subsidence & landslide including rock slide.
Social Perils in fire insurance includes :
Riot, strike, malicious damage.
Terrorism (the optional cover).
Q 19. Which is the treaty in which the arrangement can be ‘per risk’ or ‘per event/accident’ ?
Excess of loss treaty
Excess of profit treaty
Proportional treaty
Reinsurance treaty
Facultative treaty
UnAttempted
CORRECT ANSWER:
Excess of loss treaty
Explanation:
Excess of Loss treaties do not protect risk exposure but protect loss as incurred by an insurer.
While standard Excess of Loss is related to single loss amounts, either per risk or per event, stop-loss covers are related to the total
amount of claims in a year over and above a particular limit.
Q 20. Mr. X has a factory and he fears that excess rains will cause flooding, so he plans to shift the
factory’s location to a safer place. This is called _______ .
Risk avoidance
Risk evaluation
Risk identification
Risk detection
Risk control
UnAttempted
CORRECT ANSWER:
Risk avoidance
Explanation:
It’s a risk management technique where in the losses of high severity & high frequency are best dealt in a manner of just avoiding it. No
insurer would insure such risk/ losses & none could manage it of its own.
Q 21. Who is exempt from the IRDA prescribed compulsory training for various intermediaries ?
Surveyors
TPA’s
Brokers
Corporate agents
Risk engineers
UnAttempted
CORRECT ANSWER:
TPA’s
Explanation:
Only one officer of the TPA firm has to go for training and pass exam.
Q 22. 'Employment Practices' fall under what type of risk ?
Strategic risk
Operational risk
Knowledge management risk
Compliance risk
Financial risk
UnAttempted
CORRECT ANSWER:
Compliance risk
Explanation:
Risks like Data protection, Employment practices, Consumer protection etc. all fall under Compliance Risks.
Q 23. Which of these is NOT a deficiency of the Modern Portfolio Theory (MPT) ?
Investors are emotional
The financial returns distribution is ‘asymmetrical’
Co-relation of asset classes changes on externals
Optimal diversification strategy
Financial Markets are not efficient
UnAttempted
CORRECT ANSWER:
Optimal diversification strategy
Explanation:
MPT is a form of diversification. It explains how to find the best possible diversification stratergy under certain assumptions of risk and
return.
Q 24. In which currency should the settlement of claims under non-marine insurance made in ?
Indian Rupees
Swiss Francs
US Dollars
Euro's
British Pound
UnAttempted
CORRECT ANSWER:
Indian Rupees
Explanation:
As FEMA rules apply here, the claims are settled in Indian Rupees.
Q 25. As per the regulations of IRDAI, a Surveyor and Loss Assessor should have a _____ .
Proof of Authority
Contract
License
Legal Formality document
Policy
UnAttempted
CORRECT ANSWER:
License
Q 26. With a minimum premium of Rs 15, what is the sum assured offered in a Janta Personal Accident
policy ?
Rs 20000
Rs 22500
Rs 25000
Rs 27500
Rs 30000
UnAttempted
CORRECT ANSWER:
Rs 25000
Explanation:
In Janta Personal Accident policy the minimum sum insured is Rs 25000/- and maximum Rs 1,00,000/- per person per annum.
The rate of premium is Rs 15/- per sum assured of Rs 25000/- which can be increased in multiples of Rs 25,000/-.
Q 27. On what basis is the risk premium calculated ?
Value of people insured
Number of people insured
Profit & Loss Ratios
Average profit ratios
Average loss ratios
UnAttempted
CORRECT ANSWER:
Average loss ratios
Explanation:
The loss ratio is the difference between the ratios of premiums paid to an insurance company and the claims settled by the company. The
loss ratio is the total losses paid by an insurance company in the form of claims.
The premium calculation principle is one of the main objectives of study for actuaries. There seems to be full agreement among the
leading theoreticians in the field that the insurance premium should reflect both the expected claims and certain loadings.
Q 28. Which of these perils is excluded under inland transit (B) clause ?
Collision of vehicles
Derailment of railway wagons
Malicious damage
Breakage of bridges
Lightning
UnAttempted
CORRECT ANSWER:
Malicious damage
Explanation:
Risk covered in Inland transit Rail / Road (B) clause are :
1. Fire
2. Lightning
3. Breakage of bridges
4. Collision of vehicles
5. Overturning of carrying vehicle
6. Derailment / accidents of railway wagons
Q 29. If the loss amount exceeds the overlying limit, the balance will revert to _______ .
Insurer
Re-insurer
Insured
Underwriter
TPA
UnAttempted
CORRECT ANSWER:
Insurer
Explanation:
The Insurer has to bear the excess of loss above overlying limit.
Q 30. In marine insurance, the Special declaration policy can be applied by individual companies having a
minimum turnover of Rs __________ .
1 crore
2 crore
3 crore
4 crore
5 crore
UnAttempted
CORRECT ANSWER:
2 crore
Explanation:
The Special declaration policy is issued to clients whose annual estimated dispatches (turnover) by rail / road / inland waterways
exceeds Rs 2 crore.
Q 31. Vessels under steam or pressure, boilers, steam pipes , air receivers etc. are insurable under
__________ .
Vessels insurance
Fire insurance
Engineering insurance
Boiler insurance
Marine insurance
UnAttempted
CORRECT ANSWER:
Boiler insurance
Explanation:
Boiler and Pressure Plant insurance policy covers damage, other than fire, to boilers and / or other pressure plant and surrounding
property.
Q 32. A catastrophic event can cause huge strain on the _______ funds.
Insured
Insurer
Solatium
Underwriters
Contingency
UnAttempted
CORRECT ANSWER:
Insurer
Explanation:
A catastrophe is an event causing great and usually sudden damage or suffering. Such events cause big strains on the insurers funds as
a lot of claims come up for payments. For eg - Big earth quakes, terrorist strikes like attack on World Trade Center buildings etc.
Q 33. How are rates quoted in Marine cargo insurance and burglary ?
Total amount basis
Round off basis
Recurring basis
Percentage basis
Point basis
UnAttempted
CORRECT ANSWER:
Percentage basis
Q 34. All insurers have to prepare what type of account ?
Cash book
Balance sheet
Income & Expense statement
Company register
Reconciliation statement
UnAttempted
CORRECT ANSWER:
Balance sheet
Explanation:
Accounting items like Balance Sheet, Receipt and Payments A/c (Cash Flow) and Profit & Loss A/c are prepared by all insurers as per
Accounting Standards issued by ICAI.
Q 35. Regulatory Issues is an example of ________ risk.
Operational
Strategic
Compliance
Financial
Knowledge management
UnAttempted
CORRECT ANSWER:
Compliance
Explanation:
Risks like Data protection, Employment practices, Consumer protection, Regulatory Issues etc. all fall under Compliance Risks.
Q 36. The insurance of which companies is dealt mainly by State Insurance Funds ?
Private companies in a particular State
State Government owned companies
Unlisted State companies
Local Government owned companies
Multi National owned companies
UnAttempted
CORRECT ANSWER:
State Government owned companies
Q 37. Motor insurance policy for private or commercial vehicles is also known as ________ .
Vehicle Damage policy
Liability only policy
Declaration policy
Floating policy
Accident policy
UnAttempted
CORRECT ANSWER:
Liability only policy
Q 38. Settlement of claims is an important function of which organization ?
Mutual Fund organization
Insurance organization
NGO's
Service organization
Govt. organization
UnAttempted
CORRECT ANSWER:
Insurance organization
Q 39. _________ are large losses which may occur on rare occasions but have a devastating effect on an
organisation.
Catastrophes
Speculative
Chronic
Fundamental
Dynamic
UnAttempted
CORRECT ANSWER:
Catastrophes
Explanation:
Chronic Losses are small but regular.
Sporadic Losses are medium but irregular.
Catastrophic Losses are very large but rarely occur.
Q 40. The information which is obtained from the proposal form, the details of risk inspection etc are fed
into the computers. This procedure is called ______ .
Policy Procedure
Duty Procedure
Agreement Procedure
Documentation Procedure
Implementation Procedure
UnAttempted
CORRECT ANSWER:
Documentation Procedure
Q 41. Where are the accounting transactions posted ?
Balance Sheet
Cash book
Day book
Subsidiary book
Account book
UnAttempted
CORRECT ANSWER:
Account book
Q 42. The provision of percentage in investment in a approved investments like infrastructure and social
sector should not be less than ______ .
5
10
15
20
25
UnAttempted
CORRECT ANSWER:
10
Explanation:
This is as per IRDA investment regulations 2000.
Q 43. Whose responsibility is to collect detailed information of clients business ?
Sales agent
Insurers
Direct brokers
Underwriters
Business agents
UnAttempted
CORRECT ANSWER:
Direct brokers
Explanation:
Direct brokers came into the insurance market after IRDA (Insurance Brokers) Regulations, 2002. They act as an intermediary between
insured &the insurers to obtain client’s detailed information for insurance.
Q 44. When does a General Insurance policy expire ?
At 12 noon of the day of expiry
Midday of the date of expiry
Midnight of the date of expiry
Midnight of the day before the date of expiry
On the morning of the date of expiry
UnAttempted
CORRECT ANSWER:
Midnight of the date of expiry
Q 45. Which policy specifies the perils covered for property at specified locations ?
Hull insurance policy
Motor insurance policy
Fire insurance policy
Medi Claim policy
PA policy
UnAttempted
CORRECT ANSWER:
Fire insurance policy
Explanation:
A fire insurance policy specifies the perils covered for property at specified locations. It provides coverage against loss or damage to
property due to fire and other named perils.
Q 46. What do the insurers do if they are not interested in the renewal of the policy ?
They give a actual notice
They give a public notice
They give a prior notice
They give a meeting notice
They give a expired notice
UnAttempted
CORRECT ANSWER:
They give a prior notice
Explanation:
Renewal of a policy is a benefit to insured, insurer has to give prior notice.
Q 47. The indemnity of _________ is covered under the refrigeration plant insurance.
Shopping Malls
Factories
Warehouses
Cold storage
Godowns
UnAttempted
CORRECT ANSWER:
Cold storage
Q 48. Which policy provides cover for plant and machinery while being erected and tested ?
Pre Launch insurance
Erection insurance
Loss of profit insurance
Fire insurance
Marine Cum Erection insurance
UnAttempted
CORRECT ANSWER:
Erection insurance
Explanation:
Erection All Risks Insurance policy is concerned with erection / installation of plant, machinery and equipment and structures involving
no or very little civil engineering work.
Q 49. What is the term used for the retention risk that an insurer would like to keep ?
Reinsurance limit
Excess limit
Marginal limit
Base limit
Underlying limit
UnAttempted
CORRECT ANSWER:
Underlying limit
Q 50. Why was the expert group constituted at the request of General Insurance Council ?
To look into insurance disputes
To look into underwriting issues
To look into customer complaints
To look into misrepresentation
To look into damages
UnAttempted
CORRECT ANSWER:
To look into underwriting issues
Out of 50 questions 50 are un attempted.
