qwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfgh jklzxcvbnmqwertyuiopasdfghjklzxcvb nmqwertyuiopasdfghjklzxcvbnmqwer Question Bank tyuiopasdfghjklzxcvbnmqwertyuiopas IC 34 dfghjklzxcvbnmqwertyuiopasdfghjklzx cvbnmqwertyuiopasdfghjklzxcvbnmq wertyuiopasdfghjklzxcvbnmqwertyuio pasdfghjklzxcvbnmqwertyuiopasdfghj klzxcvbnmqwertyuiopasdfghjklzxcvbn mqwertyuiopasdfghjklzxcvbnmqwerty uiopasdfghjklzxcvbnmqwertyuiopasdf ghjklzxcvbnmqwertyuiopasdfghjklzxc vbnmqwertyuiopasdfghjklzxcvbnmrty uiopasdfghjklzxcvbnmqwertyuiopasdf ghjklzxcvbnmqwertyuiopasdfghjklzxc msrivas CHAPTER 1 INTRODUCTION TO INSURANCE 1. Which among the following is not a function of insurance? I. Risk mitigation II. Risk transfer III. Risk tracking IV. Risk reduction The correct option is III. Risk tracking is not a function of insurance. 2. Chance of loss is referred to as _________. I. Luck II. Risk III. Bad luck IV. Peril The correct option is II. Chance of loss is referred to as risk. 3. Insurance deductible is an example of ___________. I. Risk mitigation II. Risk avoidance III. Risk transfer IV. Risk retention The correct option is IV. Insurance deductible is an example of risk retention. 4. Cost of risk is determined by ________________. I. Probability only II. Impact only III. Probability and impact IV. Timing of risk The correct option is III. Probability and impact of the risk determine the cost of risk. 5. How does insurance help in easing access to credit? I. Insurer provides free credit II. Banks lend easily if an application is backed by insurance III. Person who can pay insurance is assumed to be creditworthy IV. Regulations mandate provision of credit to the insured The correct option is II. Banks lend easily if an application is backed by insurance. Page | 2 6. Lloyds Coffee House is regarded as the place where insurance started the way it is practised today. Lloyds is located in __________. I. Bangalore II. Singapore III. London IV. Dubai The correct option is III. Lloyds is located in London. 7. Risk transfer through risk pooling is called________. I. Savings II. Investments III. Insurance IV. Transfer The correct option is III. Risk transfer through risk pooling is called insurance. 8. The measures to reduce chances of occurrence of risk are known as _____. I. Risk retention II. Loss prevention III. Risk transfer IV. Risk avoidance The correct option is II. Loss prevention measures reduce the chance of occurrence of risk. 9. By transferring risk to insurer, it becomes possible: I. To enjoy from floods II. To enjoy and make money from insurance III. To enjoy a fire in the factory IV. To enjoy peace of mind and plan one‟s business more effectively The correct option is IV. Insurance provides peace of mind and helps one plan his business effectively. 10. Origins of modern insurance business can be traced to________. I. Bottomry II. Lloyds III. Rhodes IV. Malhotra Committee The correct option is II. Origins of modern insurance can be chased to Lloyds. 11. In the insurance context „risk retention‟ indicates a situation where__________. I. possibility of loss or damage is not there II. loss producing event has no value III. property is covered by insurance Page | 3 IV. one decides to bear the risk and its effects The correct option is IV. When one decides to bear the consequence of a risk, he is said to have retained risk. 12. Which of the following statement is true? I. Insurance protects the asset II. Insurance prevents its loss III. Insurance reduces possibilities of loss IV. Insurance pays when there is loss of asset The correct option is IV. Insurance compensates for the loss of an asset. 13. Out of 400 houses, each valued at Rs.20, 000, on an average 4 houses get burnt every year resulting in a combined loss of Rs.80, 000. What should be the annual contribution of each house owner to make good this loss? I. Rs.100/II. Rs.200/III. Rs.80/IV. Rs.400/The correct option is II. Each house owner needs to contribute Rs 200. 14. Which of the following statements is true? I. Insurance is a method of sharing the losses of a „few‟ by the „many‟ II. Insurance is a method of transferring the risk of an individual to another individual III. Insurance is a method of sharing the losses of „many‟ by a few IV. Insurance is a method of transferring the gains of a few to the many The correct option is I. Insurance is a method of sharing the losses of a few by the many. 15. Before acceptance of a risk, the insurer arranges a survey and inspection of the property. Why? I. To assess the risk for rating purposes II. To find out how the insured purchased the property III. To find out whether other insurers have also inspected the property IV. To find out whether neighbouring property also can be insured The correct option is I. Before acceptance of the risk, an insurer conducts an investigation in order to assess the risk for rating purpose. Page | 4 Bad luck The correct option is III. Horse riding accident IV. 2. Which among the following cannot be an element in a valid insurance contract? I. Moral hazard means: I. Chance of loss III. Risk of religious beliefs IV. The pneumonia resulted in death of Mr. 4. Dishonesty or character defects in an individual II.CHAPTER 2 PRINCIPLES OF INSURANCE 1. Offer and acceptance II. Disturbances at public place IV. Moral hazard means dishonesty or character defects in an individual. Honesty and values in an individual III. Consideration IV. Legality The correct option is II. Loss of goods due to ship capsizing The correct option is II. Risk indicates: I. Pneumonia II. Coercion is not an element of a valid contract. Fire II. Stolen goods violate the principle of legality and hence do not represent an insurable risk. Page | 5 . Coercion III. Fear of unknown II. Hazard The correct option is II. Hazard of the property to be insured The correct option is I. „Risk‟ indicates a chance of loss. 3. Pinto. The horse riding accident set things in motion that eventually resulted in Mr Pinto‟s death and hence it is the proximate cause. What is the proximate cause of the death? I. Stolen goods III. Which one of the following does not represent an insurable risk? I. Mr. Pinto contracted pneumonia as a result of lying on wet ground after a horse riding accident. Horse III. Burglary IV. 5. Contribution II. Damage of cargo due to rain water III. Dynamic risk The correct option is II. I. Damage to car due to accident II. Partially true IV. Diversification means spreading one‟s investment in different kinds of assets. Pooling II. Motor car The correct option is II. Not necessarily true The correct option is I. Speculative risk The correct option is I. __________________ means transfer of all rights and remedies. _____________ is not an example of an asset. Gambling IV. Sunlight cannot be classified as asset as it fails the test of scarcity and ownership. 11. ______________ is not an example of risk. 10. Insurance cannot protect an asset from loss or damage. I. False III. Damage to car tyre due to wear and tear IV. 9. with respect to the subject matter of insurance. House II. Earthquake is an example of: I.6. Catastrophic risk II. ______________ means spreading one‟s investment in different kinds of assets. from insured to insurer. Statement: Insurance cannot protect an asset from loss or damage. 7. Damage as a result of wear and tear cannot be treated as risk. Earthquake is an example of catastrophic risk. Select the most appropriate logical equivalence for the statement. 8. Damage to property due to fire The correct option is III. Subrogation Page | 6 . I. Plant and machinery IV. I. Diversification III. Sunlight III. True II. I. Dynamic risk III. Marginal risk IV. Heart ailment IV. Age of the insured II. Presence of fire extinguisher need not be disclosed while buying insurance. Presence of fire extinguisher III. Risk pooling The correct option is II. with respect to the subject matter of insurance. Legal hazard IV. Representation The correct option is I. Subrogation means transfer of all rights and remedies. Page | 7 .III. I. 13. ________________ is a wrong statement made during negotiation of a contract. Misrepresentation II. Misrepresentation is a wrong statement made during negotiation of a contract. 12. An example of a fact which need not be disclosed unless asked for is ______________ by the insurer. Contribution III. I. unless asked for. Offer IV. from insured to insurer. Other insurance details The correct option is II. Protection against loss to business premises II. Goodwill is not an essential component of the sales process. 5. having common features is known as _____________. Page | 8 . Product benchmarking The correct option is III. Which among the following activities can be classified as promotion? I. How can insurance penetration be determined? I. List of tests that a product must pass IV. Test result for a product in a benchmarking test III. Product development II. Buyer III. An endorsement from a satisfied customer II. Which among the following is not an essential component of the sales process? I. Protection against errors and omissions IV. Ratio of insurance companies to the local population III. Classification of customers into various market segments. 3. Ratio of insurance premiums to GDP. Quality control III. Insurance penetration is the ratio of insurance premiums to GDP.CHAPTER 3 MARKETING AND SELLING INSURANCE 1. Seller IV. Goodwill II. Product / Service The correct option is I. General insurance cannot be used to make windfall gains on the occurrence of a contingent event. Making windfall gains on the occurrence of a contingent event III. Protection against property losses The correct option is II. II. A testimonial is an endorsement from a satisfied customer. General insurance could help in achieving all of the following objectives EXCEPT: I. Product advertisement IV. Money required to test a product The correct option is I. Ratio of insurance premium to per capita income IV. Which among the following statements best describes a “Testimonial”? I. 6. Ratio of subscribers to the insurance policies available The correct option is I. 4. 2. Product advertisement is a means of promotion. Yes IV. Marketing IV. Consumer goods IV. 10. Maybe The correct option is III. Negotiation is a process _____________. I. I. Insurance is a part of the financial services industry. The key to successful closing lies in helping the prospect to say “Yes”. 11. No II. Don‟t know III. Share market The correct option is II. Closing The correct option is III. Insurance is part of ___________ industry. 9. To give discounts to the customer III. 7. To win some how II. Segmentation III. To reach a win-win situation IV. _______________ is not among the P‟s of marketing. Price II. Financial services III. I.I. Loss assessment is not a part of the sales process. The key to successful closing lies in helping the prospect to say ________. Sales II. Place The correct option is III. To argue and defeat the prospect Page | 9 . Manufacturing II. having common features is known as segmentation. Which of the following is not part of sales process? I. Protection IV. Prospecting The correct option is II. Sales interview III. Classification of customers into various market segments. Prospecting II. I. 8. Protection is not among one of the P‟s of marketing. Product III. Loss assessment IV. Preparing list of all the agents in the neighbourhood The correct option is I. Meeting customers when they are suffering from cold III. Ratio of premium to income III. Preparing a list of all the persons in the city III. Identifying the areas where the prospect needs insurance protection II. Meeting customer after fire was extinguished The correct option is III. Identifying people to work as insurance agents III. Life insurance premium II. Insurance density is: I. Page | 10 . Enlisting all the policyholders of the branch office IV. Prospecting in an insurance sale is gathering the names of people who may be interested in insurance. Coverage per capita The correct option is III. Identifying how much assets a prospect has IV. finding about prospect: I. Insurance density is premium per capita. Meeting customers in winter II. Need-gap analysis involves.The correct option is III. Cold Calling is: I. Indentifying the poverty level of the prospects The correct option is I. 12. Meeting people unannounced IV. Need-gap analysis involves. Negotiation is a process to reach at a win-win situation. Gathering the names of people who may be interested in insurance II. 15. finding about prospect and identifying the areas where the prospect needs insurance protection. Premium per capita IV. Prospecting in an insurance sale is I. 13. 14. Cold calling involves meeting people unannounced. 2. Using rebates as a tool to sell insurance policies is prohibited under Insurance Act 1938. Protect the interests of policyholders III. Insurance brokers II. Surveyors are not involved in procurement of insurance business. Using rebates as a tool to sell insurance policies III. Multiple insurance agents IV. Keeping aside reserves to meet solvency requirements II. Individual agents III. 3. General insurance agents The correct option is II. To control the market share of private insurers The correct option is II.CHAPTER 4 LEGAL AND REGULATORYASPECTS OF INSURANCE AGENCY 1. Seller beware III. Which among the following activities is prohibited as per the provisions of Insurance Act. The primary purpose of insurance regulations is to protect the interests of policyholders. Insurance agents who hold licence to act as an agent for both a life insurer and a general insurer are called _______________. Page | 11 . Limiting management expenses The correct option is II. Prospecting customers IV. 4. To generate fee income II. Corporate agents The correct option is III. I. Surveyors IV. Insurance buyer beware of miselling IV. To settle customer disputes IV. Composite insurance agents III. Which of the below intermediary is not involved in procurement of business? I. Buyer beware II. 5. What is the primary purpose of insurance regulations? I. The principle of “Caveat Emptor” implies buyer beware. 1938? I. Insurance agents who hold licence to act as an agent for both a life insurer and a general insurer are called composite insurance agents. What does the term “Caveat Emptor” mean? I. Common insurance agents II. Insurance agent beware of customer requirement The correct option is I. Indicate the scale of commission if asked by the customer II. Agent‟s licence is to be renewed __________. Broker The correct option is I. I. Insurance company II. I. Identify the statement which is not correct. I. Indicate the premium to be charged The correct option is II. Honesty and values in an individual III. After 3 years IV.______________ is the fees payable to the Authority for issue / renewal of licence to Act as an Insurance Agent or Composite Insurance Agent. By the respective life insurance company IV. Finance Ministry The correct option is II. 7. Rs. I. Every year II. Insurance agent represents the insurance company. 9. 10. 8. Insurance agent should __________. General Insurance Corporation (GIC) II. 150 III. Sub-agent III. Agent‟s licence is to be renewed every three years. 11. Insurance Regulatory & Development Authority (IRDA) III. Hazard of the property to be insured The correct option is I. After 15 years The correct option is III. Licence to work as an insurance agent is issued by the IRDA.6. Disclose his licence on demand IV. I. After 5 years III. Insurance agent represents the ______________. Share the commission by way of rebate III. 520 Page | 12 . 250 II. Moral hazard means: I. Co-agent IV. Insurance agent cannot share commission through rebates. Risk of religious beliefs IV. Licence to work as an insurance agent is issued by __________. Dishonesty or character defects in an individual II. The Authority may issue duplicate licence in case it is lost. 10th III. the designated person will _______________. 7th The correct option is II. Revoked III. I. Take some fees from the agent The correct option is I. Issue a duplicate licence III. Withdrawn The correct option is I. An insurance broker may deal with more than one life insurance company or general insurance company or both. Retail agent The correct option is II. Suspended IV. Rs. Minimum qualification required for an insurance agent is _______ pass. ________________ may deal with more than one Life Insurance Company or general insurance company or both. I. I. If an agent is found guilty of criminal misappropriation the designated person will cancel the license. 14.IV. 250 is the fees payable to the Authority for issue/ renewal of licence to act as an insurance agent or composite insurance agent 12. Lost II. 15. Cancel the licence II. Page | 13 . Post-Graduate IV. Renew the existing licence IV. Corporate agent IV. 13. Minimum qualification required for an insurance agent is 10th pass. Graduate II. 100 The correct option is I. Broker III. I. Agent II. If an agent is found guilty of criminal misappropriation. The Authority may issue duplicate licence in case it is ____________. Which of the below statement is true with regards to cover notes? I. an insurance company has to process an insurance proposal within 15 days. As per guidelines. come together and contribute the claim amount in proportion to their exposure to the subject matter 2. As per guidelines. I. an insurance company has to process an insurance proposal within __________. Cover notes are predominantly used in marine and motor classes of general insurance. 30 days IV. The risk may be assumed on the date on which the cheque is issued by the proposer The correct option is I. come together and contribute the claim amount in proportion to their exposure to the subject matter IV. then the risk may be assumed on the date on which the cheque is posted. 7 days II. In case the premium payment is made by cheque. 5. Cover notes are predominantly used in marine and motor classes of general insurance The correct option answer is IV. Which of the below statement is correct with regards to a warranty? Page | 14 . Cover notes are predominantly used in all classes of general insurance III. then which of the below statement will hold true? I. The principle of contribution ensures that multiple insurers covering the same subject matter. It ensures that multiple insurers covering the same subject matter. The correct option is III. It ensures that all the insured who are a part of the pool. 45 days The correct option is II.CHAPTER 5 DOCUMENTATION 1. It ensures that the premium is contributed by the insured in equal installments over the year. 4. 3. contribute to the claim made by a participant of the pool. The risk may be assumed on the date on which the cheque is deposited by the insurance company III. Cover notes are predominantly used in life insurance II. The risk may be assumed on the date on which the cheque is received by the insurance company IV. in the proportion of the premium paid by them III. Cover notes are predominantly used in health insurance IV. It ensures that the insured also contributes a certain portion of the claim along with the insurer II. What is the significance of the principle of contribution? I. In case the premium payment is made by cheque. 15 days III. The risk may be assumed on the date on which the cheque is posted II. Claim amount II. __________ is the maximum limit of liability of insurer under the policy I. 8. Premium III. Endorsement III. A warranty is a condition expressly stated in the policy and communicated to the insured separately and not as part of the policy document IV. 15 days before the expiry of the policy III. As per regulations there is a legal obligation on insurers to send a renewal notice to insured. As per regulations there is no legal obligation on insurers to send a renewal notice to insured before the expiry of the policy The correct option is IV. If a warranty is breached. 7. Premium The correct option is IV. _______________ is the consideration or price paid by insured under a contract I. Sum insured II. A warranty is a condition which is implied without being stated in the policy II. If certain terms and conditions of the policy need to be modified at the time of issuance. A warranty is a condition expressly stated in the policy III. Surrender value III. Surrender value IV. it is done by setting out the amendments through endorsement. Alteration IV. Maturity amount IV. Modifications are not possible The correct option is II. Sum insured is the maximum limit of liability of insurer under the policy. If certain terms and conditions of the policy need to be modified at the time of issuance. Warranty II. 6. As per regulations there is a legal obligation on insurers to send a renewal notice to insured. 30 days before the expiry of the policy II. Premium is the consideration or price paid by insured under a contract. I. As per regulations there is no legal obligation on insurers to send a renewal notice to insured before the expiry of the policy. Amount of loss The correct option is I.I. As per regulations there is a legal obligation on insurers to send a renewal notice to insured. 9. Which of the below statement is correct with regards to renewal notice? I. the claim can still be paid if it is not material to the risk The correct option is II. it is done by setting out the amendments through __________. A warranty is a condition expressly stated in the policy. 7 days before the expiry of the policy IV. Page | 15 . 10. Cover note III. Fire proposal seeks to know I. Is the value of all material covered in a policy II. A document which provides an evidence of contract of insurance is called policy. By cheque III. Is not important as it has no bearing on the decision of the underwriter The correct option is III. In cash II. Not important for assessing the risk III. Fire proposal seeks to know process of manufacture. Details of material stored III. Has to be kept with self always Page | 16 . Is important as it influences the decision of the underwriter IV. A document which provides an evidence of contract of insurance is called________ I. Prior to inception of the policy II. Material fact is important as it influences the decision of the underwriter. All the above The correct option is IV. Prior to inception and continues during the policy IV. By credit card The correct option is III Premium cannot be received by promissory note. 13. Construction of building IV. Endorsement IV. details of material stored and construction of the building. The certificate of Motor Insurance I. After inception of the policy III. The duty of disclosure arises prior to the inception and continues even during the policy 12. Is not mandatory II. 14. Certificate of insurance The correct option is I. 15. 11. Policy II. Premium cannot be received I. By promissory note IV. The duty of disclosure arises I. Material fact I. Process of manufacture II. There is no such duty The correct option is III. The Insured after expiry of the policy IV. A warranty I. Has to be complied with III. The Insured before expiry of the policy II. 17. Renewal Notice for Motor insurance is issued by the insurer before expiry of the policy Page | 17 . The certificate of Motor Insurance has to be kept in car always. The Insurer after expiry of the policy The correct option is II. Renewal Notice for Motor insurance is issued by I. The Insurer before expiry of the policy III. Both a and b IV.III. Is a condition expressly stated in the policy II. None of the above The correct option is III A warranty is a condition expressly stated in a policy and has to be complied with. Has to be kept in the car always IV. Has to be kept in the bank locker The correct option is III. 16. I. What is expected of an agent when she detects a moral hazard? I. 2. I.CHAPTER 6 THEORY AND PRACTICE OF PREMIUM RATING 1. I. Surveyor The correct option is II. Suggest an insurance scheme for a doctor to protect him from any claims of negligence against him. Agent IV. Underwriter decides whether to accept or not to accept the risk. _______________ is the price of a given unit of insurance. Health insurance The correct option is II. 4. Assured II. Liability insurance III. Source and nature of risk III. however it does not account for administrative expenses or profit. Premium applicable to marginal members of the society III. Probability and severity of risk affect insurance ratemaking. Liability insurance can insure the doctor against claims of negligence. Probability and severity of risk II. Marine hull insurance IV. 3. Premium after loading for administrative costs IV. Page | 18 . 5. Report the same to the insurer III. Premium sufficiently big enough to pay for losses only II. Premium derived from the most recent loss experience period The correct option is I. Nature and impact of risk The correct option is I. Identify the two factors that affect insurance ratemaking. _____________ decides whether to accept or not to accept the risk. An insurance agent should report to the insurer any detection of moral hazard. What is pure premium? I. Turn a blind eye The correct option is II. 6. Ask for a share in the claims IV. Underwriter III. Continue with the insurance as before II. Personal accident insurance II. Pure premium is sufficient enough to pay for losses. Source and timing of risk IV. I. Registration certificate of insurer is not a source of information for underwriter. Physical hazards can be ascertained from information given in a proposal form. Premium III. Registration certificate of insurer The correct option is IV. Rider IV. Can be calculated from the balance sheet IV. Bonus The correct option is I. Premium III. Which of the following is true? Physical Hazards: I. In motor insurance one of the warranties is: I. 9. Hazards are factors that increase the impact and severity of losses. Rate II. Are not important for rate making II. Cannot be ascertained III. The vehicle should not be used for speed testing Page | 19 . ___________ is the maximum amount that an insurance company will indemnify to someone who files a claim. Can be ascertained from information given in a proposal form The correct option is IV. Hazards are: I. Sum insured II. 10. Factors that increases the frequency of loss III. Factors that increase the impact of losses II. I. Sum insured is the maximum amount that an insurance company will indemnify to someone who files a claim. Rate is the price of a given unit of insurance. 11. Factors that decrease the impact and severity of losses The correct option is III. ______________ is not a source of information for underwriter. Proposal form IV. Sum Assured IV. Benefits The correct option is I. Factors that increase the impact and severity of losses IV. Pre-acceptance risk survey of the asset III. 7. 8. Annual accounts of a proposer II. The vehicle should be washed daily II. I. To harass the policyholder IV. The vehicle should not be run more than 200 km per day. The purpose of deductible clause is to eliminate small claims. Page | 20 . Manufacturer‟s selling price IV. The correct option is II. Decreases the risk III. Installation of sprinkler system in the premises decreases the risk of fire. In motor insurance one of the warranties is that vehicle should not be used for speed testing. Increases risk of hooding The correct option is II. Insured‟s declared value in motor insurance includes: I. 12. Increases risk II. Manufacturer‟s cost price III. Neither increases nor decreases risk IV. To increase the premium The correct option is II. The purpose of deductible clause is to: I. 13. To eliminate payment of small claims III. Installation of sprinkler system in the premises: I. Arbitrary price component The correct option is III. 14. To avoid claim payment II. Insured‟s declared value in motor insurance includes manufacturer‟s selling price.III. Registration II. The vehicle should not be used for carrying luggage for personal use IV. III. Stroke IV. An accident usually denotes a sudden. III. Which of the below will be treated in a day care center? I. An accident usually denotes a sudden. 4. An accident usually denotes a sudden. only a named peril policy can be bought and comprehensive policies are not available. A comprehensive policy that tends to offer coverage to most perils. 3. It is valid for 6 trips or 6 months whichever happens first III. A named peril policy may be purchased as a less expensive alternative to a comprehensive coverage policy that tends to offer coverage to most perils. A named peril policy may be purchased as a less expensive alternative to a comprehensive coverage policy that tends to offer coverage to most perils. Which of the below statement is correct with regards to an accident? I.CHAPTER 7 PERSONAL AND RETAIL INSURANCE 1. IV. An accident usually denotes a sudden. 2. It is an annual policy valid for multiple trips but ends with the first claim The correct option is III. The correct option is I. unforeseen and an unexpected event. Cancer II. foreseen and an unexpected event. unforeseen and an expected event. It is an annual policy valid for multiple trips with a limit on maximum number of trips IV. Which of the below statement is correct with regards to corporate frequent travelers plan? I. It is valid for one trip II. unforeseen and an unexpected event. II. Cataract III. Which of the below statement is correct with regards to a householder‟s insurance policy? I. A named peril policy or comprehensive policy comes at the same price. Cataract will be treated in a day care centre. may be purchased as a less expensive alternative to a named peril policy. This will cover accidental loss of damage to which of the following? I. Fixed plate glass Page | 21 . 5. Under the shopkeeper policy. the insured may opt for an additional „Fixed plate glass and sanitary fittings‟ cover. An accident usually denotes a sudden. Corporate frequent traveler plan is an annual policy valid for multiple trips with a limit on maximum number of trips. The correct option is IV. Heart attack The correct option is II. IV. II. With regards to a householder‟s policy. foreseen and an expected event. Permanent disability IV. Death II. Suicide III. then primary policy should be in the name of the vehicle owner and add-on cover in the name of the person who will be driving the vehicle. Whilst travelling in India and neighboring countries The correct option is III. subject to approval from Regional Transport Authority III. Whilst travelling abroad II. All of the above The correct option is IV. then in the name of the person who will be driving the vehicle. Personal accident cover is only I. If the person who will be driving the vehicle is different from the owner. Sanitary fittings III. In the name of the vehicle owner whose name is registered with Regional Transport Authority II. Pre-hospitalization treatment II. For travelling both in India and abroad IV. the insured may opt for an additional „Fixed plate glass and sanitary fittings‟ cover. subject to approval from the Regional Transport Authority IV. sanitary fittings and neon signs. including the vehicle owner. Motor insurance should be taken in whose name? I. Suicide is not covered in Personal Accident. Domiciliary treatment IV. Neon signs IV. Motor insurance should be taken in the name of the vehicle owner whose name is registered with Regional Transport Authority 7. Whilst travelling in India III. Loss of one hand The correct option is II. If the person who will be driving the vehicle is different from the owner. This will cover accidental loss of damage to fixed plate glass. In the name of any family member of the vehicle owner. 8. The following is not covered in Personal Accident I. Post-hospitalization treatment III. Page | 22 .II. Health insurance usually covers I. The correct option is I. 6. Under the shopkeeper policy. All of the above The correct option is IV. Personal accident cover is only for travelling both in India and abroad 9. Business interruption IV. Travel insurance covers all of the above: delay in baggage. Willful destruction by insured The correct option is IV. Only the Contents of the home III. 12. 13. Gold and silver ornaments are covered II. For travel insurance the sum insured depends on all of the above: age. 11. The correct option is I. All the above The correct option is IV. Countries to be visited IV. Householder‟s insurance covers I. Number of days of trip III. In householder‟s insurance I. domiciliary treatment. For Travel insurance the sum insured depends on I. Householder‟s insurance covers both the structure and contents.Health insurance covers all of the above: pre-hospitalisation treatment. Machinery breakdown II. emergency hospitalisation and loss of checked baggage. willful destruction by insured is not covered. Both Structure and contents only when insured is not at home The correct option is III. Delay in baggage II. Loss of checked baggage IV. 10. In shop keeper‟s insurance. Cars owned by the family are covered IV. number of days of trip. 14. In householder‟s insurance gold and silver ornaments are covered. Content‟s of one‟s shop is covered III. Page | 23 . Only the structure of the home II. countries to be visited. Both the structure and contents IV. which of the following are not covered? I. Emergency hospitalization III. post-hospitalisation treatment. Age II. Parcels sent by post are covered during transit. In shopkeeper‟s insurance. Malicious damage III. Travel insurance covers I. All the above The correct option is IV. In shopkeeper‟s insurance money carried by customer to business premises is usually not covered. Dishonest acts of insured III.15. The correct option is IV. Money carried by customer to business premises. Dishonest acts of customers IV. Money in transit from bank to business premises III. Money in safe at business premises IV. Dishonest acts of employees II. Shop insurance covers dishonest act of employees. In shop keeper‟s insurance which of the following are usually not covered I. Dishonest acts of money lenders The correct option is I. Page | 24 . Shop insurance covers I. 16. Money in till/counter at business premises II. A fire policy for commercial risks covers the perils of ________ I. Riot strike and terrorism The correct option is II. 3. The premium for burglary policy depends on the nature of number of things like insured property. Shortage due to error or omission II. A business interruption insurance policy can be taken only in conjugation with ____________. previous claims experience etc. Riot strike and terrorism can be covered as an extension by paying an extra premium 5. 4. I. All of the above The correct option is IV. construction and location of premises. I. None of the above The correct option is III. Standard fire and marine policy III. A business interruption insurance policy can be taken only in conjugation with standard fire and special perils policy. Construction and location of the premises IV. Loss of money that has been entrusted to other than authorized person IV. employees against the financial loss suffered by them due to fraud or dishonesty of their employer Page | 25 . burglar alarm). Standard fire and special perils policy II. The premium for burglary policy depends on ______________. safety measures (e. Which of the below is covered under a money insurance policy? I. watchmen. Fire policy for commercial risks covers the perils of explosion and implosion. Implosion III. the moral hazard of the insured himself. Standard Engineering and marine policy The correct option is I. Employers against the financial loss suffered by them due to fraud or dishonesty of their employees II. 2. Both of the above IV. Loss of cash from one‟s premises due to burglary is covered under a money insurance policy. Explosion II.CHAPTER 8 COMMERCIAL INSURANCE 1. I.g. Loss of cash from one‟s premises due to burglary III. Nature of insured policy II. Standard and special perils policy IV. Moral hazard of the insured himself III. Fidelity guarantee insurance indemnifies ________________. Contractors All Risk cover IV. Fire and special perils as per fire insurance practice II. damage to property insured when it is in transit by registered parcel will be covered under Section III. 7. Money securities lost or damaged whilst within the premises due to fire II. Which of the below can be covered under a bankers indemnity insurance policy? I. Which of the following is not covered under Industrial All Risks insurance? I. Contractors Plant & Machinery cover The correct option is II. 9. Electronic equipment The correct option is II. Shareholders against the financial loss suffered by them due to fraud or dishonesty of the company management The correct option is I. Advance Loss of Profits cover III. Larceny III. damage to property insured when it is in transit by registered parcel will be covered under ____________. A fidelity guarantee insurance policy indemnifies employers against the financial loss suffered by them due to fraud or dishonesty of their employees. dishonesty of employees with reference to money. All of the above The correct option is IV. Employees and employers against the financial loss suffered by them due to fraud or dishonesty of third party IV. Machinery Loss of Profits cover II. forgery or alteration of cheques. Larceny is not covered under Industrial All Risks insurance Page | 26 . Dishonesty of employees with reference to money IV. Section III IV. 8. 6. In case of a Jeweler‟s Block Policy. Forgery or alteration of cheques III. Section IV The correct option is III. I. Machinery breakdown IV. Delay in start-up policy is also known as ______________. Section II III. In case of a Jeweler‟s Block Policy.III. A banker‟s indemnity insurance policy can cover: money securities lost or damaged whilst within the premises due to fire. Delay in start-up policy is also known as Advance Loss of Profit cover. Section I II. I. Employees compensation policy II. 14. 25. Page | 27 . 15. Companies All Requirements The correct option is II. Policy which covers loss or damage to aircraft is ______________. An employer insures himself from dishonest act of his employees by Fidelity Guarantee Insurance policy.500. 1991.000 IV. Aviation policies III. In Engineering insurance CAR stands for Contractors All Risks. An employer insures himself from dishonest act of his employees by _________ I.000 The correct option is II. Fidelity Guarantee Insurance policy IV. Jettison The correct option is I. Piracy IV. 1991. 12. 12. Cargo III. Rs. Which branch of insurance offers cover against war perils? I. Motor Car II. Under the Public Liability Insurance Act.250 II. 11. 13.500 III. Rs. the compensation payable for actual medical expenses is Rs. Rs. I. Both of the above IV. Company‟s All Risks IV. Declaration policy. 50. Hull II. Rs.10. Marine policies II. In Engineering insurance CAR stands for I. Hull refers to the body of the ship. 12. Under the Public Liability Insurance Act. The correct option is III. 6. how much is the compensation payable for actual medical expenses? I. Marine and aviation is the only branch of insurance that offer cover against war perils. Public Liability Insurance policy III. _________ refers to the body of the ship. Contractors All Risks III. None of the above The correct option is III. Consequential Loss (Fire Policy) covers loss of profit due to damage to factory. Fire Insurance Policy does not cover damage to property even as add-on cover. Fire Insurance Policy does not cover damage to property even as add-on cover due to___________. Fire Insurance II. Loss of Goodwill III. Consequential Loss (Fire Policy) covers: I. Contractor‟s All Risk Policy is a variation of: I. Aviation insurance IV. Premium in Burglary depends on: I. Earthquake III. Premium in burglary depends on security measures. Money insurance The correct option is III. location of premises. Employee‟s Compensation Policy is a type of I. due to bombing or war. Nature of property IV. Losses due to foreign exchange fluctuations The correct option is I. Loss of profit due to damage to factory II. Floods II. 16. Security measures II. nature of property 19. Engineering Insurance IV. Policy which covers loss or damage to aircraft is aviation insurance. Fire IV. Bombing due to war The correct option is IV. Material wear & tear in machinery IV. Marine Cargo Insurance Page | 28 . Marine Insurance The correct option is III. Liability Insurance II. 20. Property insurance III. Life Insurance III. 18.I. All of the above The correct option is IV. Contractor‟s All Risk Policy is a variation of Engineering Insurance. Location of Premises III. Statutory liability II. Fire Insurance III. I. 17. Money invested in Mutual Fund III.IV. Engineering Insurance The correct option is I. Employee‟s Compensation Policy is a type of Liability Insurance. Money lying in Saving Bank IV. The correct option is I. Money deposited with post office. Page | 29 . Money Insurance Policy covers: I. Money insurance policy covers cash in hand. Cash in hand II. 21. Notify the insurer of the loss as soon as reasonably possible II. Which among the following is the most appropriate thing for Raj to do? I. Ignore the damage The correct option is I. Both claims investigation and assessment are the same thing II. Raj is involved in a car accident. Assessment tries to determine the validity of the claim whereas investigation is more concerned with the cause and extent of the loss IV. Police report Page | 30 . IRDA is the licensing authority for surveyors. 4. Who is the licensing authority for surveyors? I. Ascertaining whether the loss was a result of an insured peril IV. Investigation tries to determine the validity of the claim whereas assessment is more concerned with the cause and extent of the loss III. Surveyor Association of India II. Notify the insurer at the time of insurance renewal III. Insurance Regulatory and Development Authority IV. 2. Investigation tries to determine the validity of the claim whereas assessment is more concerned with the cause and extent of the loss. Compare claims investigation and claims assessment. Quantifying the amount payable under the claim The correct option is II.CHAPTER 9 CLAIMS PROCEDURE 1. Approaching the claim with a prejudice III. Which among the following documents is most likely to be requested while examining a cyclone damage claim? I. Investigation is done before the claim is paid and assessment is done after the claim is paid The correct option is II. Professional settlement of claims does not involve approaching a claim with prejudice. 5. A claim needs to be notified as soon as reasonably possible. Government of India The correct option is III. I. Seeking information relating to the cause of the loss II. Damage the car further so as to receive a bigger compensation IV. Report from Fire Brigade III. Surveyor Regulatory and Development Authority III. Coroner‟s report II. Which of the following activities would not be categorised under professional settlement of claims? I. 3. His car is insured under a motor insurance policy. Investigation of loss is done by: I. at the exact time of the loss II. Court of Law The correct option is IV. any time after the loss The correct option is III. Report from Meteorological Department The correct option is IV. Report from Meteorological Department is most likely to be requested while examining a cyclone damage claim. Under the principle of subrogation the insurer can assume the rights of the insured in order to recover from a third party the loss paid under a policy. Doctor III. 10. Surveyor II. as soon as reasonably possible IV. 8. 7. For personal accident claims. If the insurer decides that a certain loss is not payable because it is not covered under the policy then such matters will be decided in the Court of Law. Indemnity The correct option is III. Umpire III. Police Page | 31 . report of________ is necessary. 6. licensed and qualified surveyor III. after 15 days III. insured‟s representative IV. any person with a degree in engineering The correct option is II. If the insurer decides that a certain loss is not payable because it is not covered under the policy then who decides on such matters? I. Subrogation IV. Contribution II. Under which principle can the insurer assume the rights of the insured in order to recover from a third party the loss paid under a policy? I. Arbitrator IV. Discharge III. Intimation of loss is to be made as soon as reasonably possible. Insurer‟s decision is final II.IV. unlicensed surveyor II. Intimation of loss is to be made: I. 9. I. Investigation of loss is done by licensed and qualified surveyor. Claims assessed outside the country in case of travel insurance policies are assessed by claims settling agents named in the policy. Rs. Claims assessed outside the country in case of travel insurance polices are assessed by: I. Insurer IV. Turnaround Time The correct option is IV. is optional for the insured III. is necessary IV. Time and Tide IV. Independent surveyors are required for claims above Rs 20000 as per the Insurance Act. Independent surveyors are required for claims above_______ as per the Insurance Act. is part of the police report The correct option is III. Local surveyors in the country of loss III. 12. salvage belongs to insurer. 25.000 II. Rs.000 The correct option is III. Surveyors II. Indian surveyors II. Insurer‟s own employees IV. For personal accident claims report of a Doctor is necessary. Claims settling agents named in the policy The correct option is IV. Insured III. 40.000 IV. Page | 32 .IV. I. Coroner The correct option is II. In case of a fire claim. 15. In case of a fire claim. a report from the fire brigade: I. 15. 11. What is TAT? I. Local authorities The correct option is III. a report from the fire brigade is required 14. 13.000 III. Till a Time III. is not required II. Rs. Time and Turn II. salvage belongs to: I. TAT is turnaround time. 20. On payment of loss. On payment of loss. Rs. Page | 33 .16. Insurers under right of subrogation are allowed to recover the loss paid from shipping companies and railway and road carriers and airlines and port trusts. in the court of law II. 17. Shipping companies only II. Insurers under right of subrogation are allowed to recover the loss paid from: I. I. Shipping companies and railway and road carriers and airlines and port trusts The correct option is IV. Arbitration is a claim settlement process done by arbitrator(s) chosen by the parties involved. arbitrarily by the insurance company‟s employees The correct option is III. Airlines and Port Trusts only IV. Railways and road carriers only III. by arbitrator(s) chosen by the parties involved IV. by a group of surveyors III. Arbitration is a claim settlement process done ______________. A person who buys goods for resale purpose III. I. As per the Consumer Protection Act. Buys goods and services for a consideration and uses them IV. 1986. Sum of costs incurred while servicing the customer over his lifetime II. What is meant by customer lifetime value? I. Identify the scenario where a debate on the need for insurance is not required. 3. Communication IV. Fire insurance The correct option is III. Business liability insurance III. Rank given to customer based on business generated III. Empathetic listening IV. What does not go on to make a healthy relationship? I. 2. who cannot be classified as a consumer? I. Maximum insurance that can be attributed to the customer The correct option is III. a person who buys goods for resale purpose cannot be classified as consumer. Paying good attention II. Attraction II. Uses the services of another for a consideration The correct option is II. Being extremely judgemental III. Hires goods / services for personal use II. Sum of economic benefits that can be achieved by building a long term relationship with the customer is referred to as customer lifetime value. 5. Motor insurance for third party liability IV. Scepticism does not go on to make a healthy relationship. Responding appropriately Page | 34 . Trust III. Sum of economic benefits that can be achieved by building a long term relationship with the customer IV. As per the Consumer Protection Act. Which among the following is not an element of active listening? I. Motor insurance for third party liability is mandatory by law and hence a debate on its need is not required.CHAPTER 10 CUSTOMER SERVICE 1. Scepticism The correct option is IV. 4. Property insurance II. 1986. 7. _______________ is not an indicator of service quality. 11. I. Motor third party liability insurance is mandatory in India. Insurance is not a tangible good. 6. Maintaining confidentiality of client‟s business and personal information III. Rebate The correct option is II. Cleverness is not an indicator of service quality. Deductible III. One of the methods of reducing insurance cost of an insured is the deductible clause in a policy. Being extremely judgemental is not an element of active listening. Mobile Phone IV. A pair of jeans The correct option is II. Placing client‟s interest ahead of self interest The correct option is III. 10. Reinsurance II. Insurance III. Responsiveness The correct option is I. Reliability III. I. Empathy IV. Travel insurance for domestic travel IV. In India _______________ insurance is mandatory. _____________ is not a tangible good. Co-insurance IV. One of the methods of reducing insurance cost of an insured is __________ I. Fire insurance for houses III. A customer having complaint regarding his insurance policy can approach IRDA through Page | 35 . 9. House II. Cleverness II. Placing self-interest ahead of client‟s interests IV. Placing self-interest ahead of client‟s interests is not ethical behaviour. 8. Personal accident The correct option is I. Motor third party liability II. Which among the following is not a characteristic of ethical behaviour? I. Making adequate disclosures to enable the clients to make an informed decision II. I.The correct option is II. District Consumer Forum III. ___________ has jurisdiction to entertain matters where value of goods or services and the compensation claim is up to 20 lakhs I. Active Listening involves: I. on time and by showing interest. By showing interest IV. Complaint against insurance companies. 14. 15. showing interest and being confident The correct option is IV. Paying attention to the speaker Page | 36 . Complaint against shopkeepers III. Select the correct statement: I. A customer having complaint regarding his insurance policy can approach IRDA through IGMS. Ombudsman IV. District Forum has jurisdiction to entertain where value of goods or services and the compensation claim is up to 20 lakhs. Ethical behaviour helps in developing trust between the agent and the insurer IV. Ethical behaviour is impossible while selling insurance II. Ethical behaviour is not necessary for insurance agents III. In customer relationship the first impression is created: I. State Commission IV. IGMS II. By being on time. National Commission The correct option is II. 12. Ethical behaviour helps in developing trust in the agent and the insurer. Consumer Protection Act deals with complaint against insurance companies. shopkeepers and brands. Complaint against brand IV.I. By being confident II. brand and shopkeepers The correct option is IV. 13. High Court II. In customer relationship the first impression is created by being confident. By being on time III. 16. Consumer Protection Act deals with: I. Complaint against insurance companies II. IGMS or District Consumer Forum or Ombudsman The correct option is I. District Forum III. Ethical behaviour is expected from the top management only The correct option is III. Page | 37 . giving an occasional nod and smile and providing feedback.II. Providing feedback IV. Giving an occasional nod and smile III. giving an occasional nod and smile and providing feedback The correct option is IV. Active Listening involves paying attention to the speaker. Paying attention to the speaker. Insurer III. Scepticism and perseverance The correct option is I. Agent III. I. Pre-recruitment training IV. 2. 4. ____________ is a representative of the insurance company and is governed by the principal agent relationship. Prejudice and loathing III. Empathy and ego drive II. Insurance agent II. Broker IV. Bancassurance II. Sales training The correct option is III. Banks IV. Pride and honesty IV. whether risk can be accepted. Broker III. Underwriter The correct option is I. Empathy and ego drive are the two basic qualities that make a good sales person. I. I. _________________ is collaboration between banks and insurers to distribute insurance products. _____________ determines whether the proposal should be admitted. Process training II. Which among the following is the most likely to contain the IRDA stipulated 50 hours training to help prospects clear the IRDA examination? I. 3. Agent II. 5. Insurance agent is a representative of the insurance company and is governed by the principal agent relationship. Bancassurance is collaboration between banks and insurers to distribute insurance products. Which among the following are the two basic qualities that make a good sales person? I.CHAPTER 11 INSURANCE CAREER PROSPECTS 1. Pre-recruitment training is the most likely to contain the IRDA stipulated 50 hours training to help prospects clear the IRDA examination. Insurance company The correct option is I. Underwriter Page | 38 . Product training III. An individual III. A co-operative society II. Truthfulness IV. Insured The correct option is III. A bank IV. A broker The correct option is II. Fixed salary income is not a benefit of insurance agency.IV. Fixed salary income III. Social prestige The correct option is II. Freedom to decide working hours IV. 7. I. Underwriter determines whether the proposal should be admitted. Will to excel II. An individual cannot become a corporate agent. Government of India The correct option is I. I. Customer The correct option is II. Reserve Bank of India III. 6. 8. Insurance Brokers are licensed by the Insurance Regulatory & Development Authority. Security Exchange Board of India IV. Will to excel. Empathy towards customer III. The following is not a benefit of insurance agency. whether risk can be accepted. Page | 39 . Broker represents: I. 9. 10. _________________ cannot become corporate agent. Insurance Regulatory and Development Authority IV. Multiple insurance companies III. No limit on income from commission II. One insurance company II. Following is required in insurance agency career for achieving success: I. Insurance brokers are licensed by: I. Insurance Regulatory & Development Authority II. empathy towards customer and truthfulness The correct option is IV. An insurance broker can represent multiple insurance companies. Corporate agent II. Share broker is not an insurance intermediary. Rs.00. Following is not an insurance intermediary: I. An agent can earn upto: I.000 per month III. 10.000 per month II.Will to excel. Insurance agent The correct option is II. Page | 40 . Share broker III.1 Crore per year IV. 20. 12. Rs. empathy towards customer and truthfulness is required for a successful insurance agency career. An agent can earn unlimited amounts of money based on her efforts. Unlimited amount based on her efforts The correct option is IV. 11. Insurance broker IV.