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