DAMO DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

VISAKHAPATNAM

SEMESTER VIII End – Semester Examinations, April -2023

Elective-VI: Insurance Laws (08-6)

Instructions:
1. Answer all questions.
2. Any over writing in answering question No. I will invalidate the relevant answer.
3. Do not write anything on the question paper. It will be treated as malpractice.
Total Marks - 50
Time: 2½ Hours

I. Choose the correct answer from the following MCQ’s (20 x 0.5 marks = 10 marks)
1. Insurable Interest in Fire Policy should exist
A. At the time of taking of policy
B. At the time of loss
C. Throughout the policy
D. All of the above

2. In marine insurance if the policy is without average clause, a claim for loss of profit will be
A. Sum insured.
B. Higher of actual loss and sum insured
C. Lower of actual loss and sum insured
D. cannot say

3. Goods costing ₹ 1,00,000 were insured for ₹ 50,000. Out of these goods, ¾ are destroyed by
fire. The amount of claim with average clause will be
A. ₹ 37,500
B. ₹ 50,000
C. ₹ 75,000
D. ₹ 20,000

4. Today, medical examinations and tests are:

A. Never required for a life insurance application.
B. Sometimes required for a life insurance application.
C. Usually required for a life insurance application.
D. Always required for a life insurance application.

5. The main purpose of life insurance is to:

A. Make up for loss of earnings if an insured person is unable to ever work again.
B. Pay for urgent medical expenses to save the life of an insured person if that is needed.
C. Meet an insured person’s debts and other financial commitments in the event of death.
D. Provide a lump sum if an insured person is diagnosed with a life-threatening illness.

6. The Report of An Insurance Surveyor is not Sacred, But The Consumer Forum Cannot Subject
it to Forensic Examination, As Per The SC in
A. National Insurance Company Ltd. v. Public Type College reported in II (2001) CPJ 26(NC)
B. Jang Bahadur Singh vs The Union Of India , AIR 2008 Pat 91, 2008 (1) BLJR 1113
C. Khatema Fibres Ltd. vs. New India Assurance Company Ltd.(2021),
CIVIL APPEAL NO.9050 OF 2018
D. Mithoolal Nayak vs Life Insurance Corporation Of ... on 15 January, 1962, 1962 AIR 814,
1962 SCR Supl. (2) 571
1| Page
7. Group insurance is ideally suited for covering _______.
A. affluent person in the society.
B. weaker sections of the society.
C. employer-employee groups.
D. both (B) and (C).

8. The doctrine of Caveat Emptor governs ________.

A. Marine insurance contracts.
B. Commercial contracts.
C. Group insurance contracts.
D. All general insurance contracts.

9. What is floating policy?

A. A standard fire policy.
B. Policy covering the fixed sum assured stock.
C. A policy that covers stocks located in various godowns under a single policy.
D. A renewable marine policy.

10. For settlement of claims, Insurer requires proper knowledge of ___________.

A. law, principles and practice of insurance.
B. law only.
C. principles and practice of insurance.
D. Law, principles, practice of insurance, terms and conditions of policies, extensions and
modifications.

11. If the interest rates in the market are higher, then cost of insurance _________.
A. Increases.
B. Moderate.
C. Decreases.
D. No change.

12. Nomination can be done at the inception of the policy by providing details of nominee in the
_________.
A. White Paper.
B. Proposal Form.
C. Premium Receipt.
D. Promissory Note.

13. A life insurance policy from LIC may be assigned only after a period of ________.
A. 10 years.
B. 5 years.
C. 3 years.
D. 1 year.

14. A policy protecting a group of persons, usually employees of a firm generally called as
___________.
A. Fire insurance policy.
B. Group insurance policy.
C. Marine insurance.
D. Automobile insurance.
15. CIF Contract means
A. cost input freight
B. cost insurance freight
C. cost incidental freight
D. cost output freight

2| Page
16. Match the following
i. Pure Indemnity 1. Life insurance
ii. Strict Indemnity 2. Marine insurance
iii. Null Indemnity 3. Fire insurance
iv. Modified form of indemnity 4. Property insurance

A. i-4, ii-2, iii-1, iv-3

B. i-3, ii-4, iii-1, iv-2
C. i-4, ii-3, iii-1, iv-2
D. i-2, ii-3, iii-1, iv-4

17. Which of the following terms matches closest with ‘Family Floater’?
A. Health insurance
B. Property insurance
C. Accidental injury
D. Consequential loss

18. Which of the following types of insurances is mandatory?

A. Motor Own Damage
B. Motor Third Party Legal Liability
C. Personal Accident Insurance
D. Product Liability

19. In ‘Hit and Run’ cases, claims are settled from _______
A. Solatium Fund
B. IRDA’s contingency Fund
C. Insuring Company’s reserves
D. State Government’s funds

20. The Sanskrit term ………….. the name of LIC of India corporate headquarters, found in Rig
Veda.
A. Yogaraksha
B. Yogakarma
C. Yogakshema
D. Yogamrutha.

II. ‘X’ a registered Co-operative Society, the owner of a mechanised fishing boat named jalaswa
was insured with the defendant under the Marine Hull Policy with a premium in quarterly
instalments. The said Insurance Policy covers amongst other things of total loss, constructive
total loss, partial loss, etc., to the boat as per the terms of the Policy. The plaintiff paid the extra
premium for extension of the Insurance on the extended Coast for the mentioned boat accepted
by the insurance company. When ‘X’ lended his boat to ‘Z’ on its transit the boat was sunk in
the sea at a place, due to fortuitous incursion of sea water into the boat. Thereupon, the plaintiff
issued a registered notice on 10.3.1981 by claiming the policy amount with interest for which
the defendant gave a reply repudiating its liability by stating that the claim of the plaintiff falls
outside the purview of the policy. Examine the following in support of the allegations made by
the plaintiff with the help of legal provisions.

(1) What is the nature of the policy?

(2) Whether the plaintiff is entitled to the suit amount under the Insurance Policy?
(3) Whether the plaintiff is entitled to the interest?
(4) To what relief the plaintiff is entitled?
(1 x 10 marks = 10 marks)
3| Page
III. United India Insurance [Link] vs M/[Link] Rai Chandan Lal, Appeal (civil) 6277 of
2004.
(1 x 10 marks = 10 marks)

IV. There is a statement that “Public liability insurance is not usually compulsory by law” in
support or contravention to it, explain public liability insurance in importance to the protection
of a third party.
(1 x 10 marks = 10 marks)

V. Answer any two of the following (2 x 5 marks = 10 marks)

1. Insurable Interest in life insurance

2. Social security and insurance

3. Miscellaneous insurance

*****

4| Page