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Basic Insurance Concepts & Principles - exampdfs 01

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Basic Insurance Concepts & Principles - exampdfs 01

Frage 1 von 50

1

The Insurance market comprises:
1) buyers
2) sellers
3) intermediaries

Wähle eine der folgenden:

  • 1, 2

  • 1, 3

  • 2, 3

  • 1, 2, 3

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Frage 2 von 50

1

An example of a Seller in an insurance market is/are:

Wähle eine der folgenden:

  • Life Insurance Association

  • Insurance companies

  • Insurance agents

  • Insurance brokers

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Frage 3 von 50

1

Which of the following is not classified as Commercial General Insurance?

Wähle eine der folgenden:

  • Professional Indemnity Insurance

  • Marine Cargo Insurance

  • Personal Liability Insurance

  • Work Injury Compensation Insurance

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Frage 4 von 50

1

Microinsurance provides a variety of different risks, including illnesses, accidental bodily injuries, death and property loss, designed for the affordability and accessibility to low-income households.

Wähle eins der folgenden:

  • WAHR
  • FALSCH

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Frage 5 von 50

1

It is mandatory for Takaful insurance to be compliant with Shariah and the Islamic law.

Wähle eins der folgenden:

  • WAHR
  • FALSCH

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Frage 6 von 50

1

Which of the following is an example of pure risk?

Wähle eine der folgenden:

  • Being robbed

  • Running a business

  • Earthquake

  • Driving a car

Erklärung

Frage 7 von 50

1

Which of the following is NOT an example of fundamental risk?

Wähle eine der folgenden:

  • War

  • Flood

  • Driving a car

  • Unemployment

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Frage 8 von 50

1

Which of the following is NOT a category of any type of insurance contract?

Wähle eine der folgenden:

  • Contract of Insurability

  • Contract of Indemnity

  • Valued contract

  • Benefit contract

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Frage 9 von 50

1

Which of the following is NOT commonly insured under a valued contract?

Wähle eine der folgenden:

  • Marine insurance

  • Antique insurance

  • Jewelry Insurance

  • Personal Accident Insurance

Erklärung

Frage 10 von 50

1

Which of the following is commonly classified as a contract of indemnity?

Wähle eine der folgenden:

  • Marine insurance

  • Endowment insurance

  • Fire Insurance

  • Personal Accident Insurance

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Frage 11 von 50

1

Which of the following is commonly classified as a benefit contract?

Wähle eine der folgenden:

  • Marine insurance

  • Antique insurance

  • Fire Insurance

  • Personal Accident Insurance

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Frage 12 von 50

1

Which of the following types of loss is NOT insurable?

Wähle eine der folgenden:

  • Loss that is accidental

  • Loss that is definite

  • Loss that creates a burden

  • Loss that happens to a large number of insureds at the same time

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Frage 13 von 50

1

What is a peril?

Wähle eine der folgenden:

  • An event or occurrence which causes a loss, an injury or damage

  • An event or occurrence that creates or increases the risk of loss

  • An event or occurrence whereby people, through their careless or irresponsible action creates or increases the risk of loss

  • All of the others

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Frage 14 von 50

1

In insurance, which of the following is NOT a type of hazard?

Wähle eine der folgenden:

  • Moral hazard

  • Physical hazard

  • Accidental hazard

  • None of the others

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Frage 15 von 50

1

A moral hazard can involve a situation in which a person engineers a loss on purpose in order to make a false claim against an insurance company.

Wähle eins der folgenden:

  • WAHR
  • FALSCH

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Frage 16 von 50

1

Which of the following is NOT a method of risk control?

Wähle eine der folgenden:

  • Avoidance

  • Confine

  • Retention

  • Transfer

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Frage 17 von 50

1

Which of the following is a type of risk retention whereby one is aware of a risk and intentionally retains it, or a portion of it:

Wähle eine der folgenden:

  • Active retention

  • Passive retention

  • Self retention

  • Insurance retention

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Frage 18 von 50

1

Which of the following clauses are usually used in a contract so that one party will assume legal liability on behalf of another party?

Wähle eine der folgenden:

  • Assumption clause

  • Zero-liability clause

  • Zero-responsibility clause

  • Hold-harmless clause

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Frage 19 von 50

1

Which of the following is a method to use such that a risk and its potential financial consequences can be transferred to another party without the use of insurance?

Wähle eine der folgenden:

  • Risk transfer

  • Risk pooling

  • Non-insurance transfer

  • Non-insurance pooling

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Frage 20 von 50

1

Non-insurance transfer methods are usually used in which type of contacts?

Wähle eine der folgenden:

  • Building construction

  • Personal Accident Insurance

  • Motor Vehicle Insurance

  • None of the others

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Frage 21 von 50

1

Which of the following are benefits of insurance?

Wähle eine der folgenden:

  • Enhance provision of credit facilities

  • Stimulates business enterprise

  • Encourages investments

  • All of the others

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Frage 22 von 50

1

What is insurable interest?

Wähle eine der folgenden:

  • The legal right to insure

  • The amount of compensation

  • The real reason for the loss

  • The insured

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Frage 23 von 50

1

What is subrogation?

Wähle eine der folgenden:

  • The legal right to insure

  • The legal right to recovery

  • The real reason for the loss

  • The amount of compensation

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Frage 24 von 50

1

Which of the following is NOT TRUE about 'common law'?

Wähle eine der folgenden:

  • It is sometimes called 'unwritten law'

  • It consists of generally accepted rules and requirements that a civilized society will consider automatic

  • It can be modified or abolished by statute law

  • It cannot be modified by the mutual agreement of parties to a contract

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Frage 25 von 50

1

Which of the following is NOT essential to insurable interest?

Wähle eine der folgenden:

  • There must be some property, rights, interest or potential liability capable of being insured

  • The property, rights, interest or potential liability must be the subject matter of the insurance

  • The insured must not stand in a relationship, recognized by law, with the subject matter of the insurance

  • The proposer must benefit from the continued existence of the subject matter of the contract or be prejudiced by its loss

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Frage 26 von 50

1

Which of the following types of insurance contracts do not need proof of existence of insurable interest at the time that the policy is issued?

Wähle eine der folgenden:

  • Non-life and non-marine contracts

  • Life insurance

  • Marine insurance

  • None of the others

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Frage 27 von 50

1

Which of the following relationships do not have an insurable interest?

Wähle eine der folgenden:

  • Husband and wife

  • Employee and employer

  • Debtor and creditor

  • None of the others

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Frage 28 von 50

1

The doctrine of utmost good faith imposes which of the following duties on the parties to the contract?

Wähle eine der folgenden:

  • 1) A duty not to misrepresent any matter relating to the insurance

  • 2) A duty to disclose all material facts relating to the contract

  • Both 1) and 2)

  • None of the others

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Frage 29 von 50

1

Which of the following can be influenced by a material fact?

Wähle eine der folgenden:

  • An underwriter's decision to accept a risk

  • Premium

  • Terms and conditions of the insurance contract

  • All of the others

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Frage 30 von 50

1

Facts of law do not need to be disclosed as material facts because everyone is expected to know the law.

Wähle eins der folgenden:

  • WAHR
  • FALSCH

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Frage 31 von 50

1

Duty of disclosure commences at all of the following times EXCEPT the:

Wähle eine der folgenden:

  • Beginning of negotiations

  • Inception of policy

  • After inception

  • None of the others

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Frage 32 von 50

1

Duty of disclosure arises under:

Wähle eine der folgenden:

  • 1) Common law

  • 2) The policy terms

  • Both 1) and 2)

  • None of the others

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Frage 33 von 50

1

Duty of disclosure is only applicable to the:

Wähle eine der folgenden:

  • Insured

  • Insurer

  • Both Insured and Insurer

  • None of the others

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Frage 34 von 50

1

For a fact to be considered as a misrepresentation, it must:

Wähle eine der folgenden:

  • induce the contract

  • not be made by a party to the contract

  • not cause some loss or disadvantage to the person who has relied upon it

  • All of the others

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Frage 35 von 50

1

Which of the following is NOT a type of misrepresentation?

Wähle eine der folgenden:

  • Fraudulent

  • Innocent

  • Material

  • Negligent

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Frage 36 von 50

1

A proposer applying for life insurance says that he is in good health when he knows that he is suffering from a serious illness is guilty of:

Wähle eine der folgenden:

  • misrepresentation

  • non-disclosure

  • Both misrepresentation and non-disclosure

  • None of the others

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Frage 37 von 50

1

Fraudulent non-disclosure is also known as:

Wähle eine der folgenden:

  • Concealment

  • Mitigation

  • Negligence

  • Subrogation

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Frage 38 von 50

1

If innocent misrepresentation by the insured is present, the insurer has the right to:

Wähle eine der folgenden:

  • Claim damages

  • Keep any premium paid

  • Allow the contract to stand

  • All of the others

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Frage 39 von 50

1

An insurer can refuse to pay a particular claim but at the same time allow the contract to stand only if:

Wähle eine der folgenden:

  • 1) The insured is guilty of fraudulent misrepresentation

  • 2) The insured is guilty of innocent misrepresentation

  • Both 1) and 2)

  • None of the others

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Frage 40 von 50

1

Which of the following is a method by which an insurer can provide the insured with the necessary indemnity?

Wähle eine der folgenden:

  • Repair

  • Replacement

  • Reinstatement

  • All of the others

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Frage 41 von 50

1

The principle of indemnity can be applied to which of the following classes of insurance?
1) Property insurance
2) Pecuniary insurance
3) Personal Accident insurance
4) Life insurance

Wähle eine der folgenden:

  • 1) and 2)

  • 2), 3), 4)

  • 3) and 4)

  • All of them

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Frage 42 von 50

1

When insuring machinery and equipment, which of the following is TRUE about how a second-hand market will affect the amount insured?

Wähle eine der folgenden:

  • 1) If there is a ready second-hand market, the indemnity is the cost of the second-hand item less any additional transport and installation costs

  • 2) If there is no second-hand market, the indemnity is the cost of repair or replacement less an allowance for wear and tear, if applicable

  • Both 1) and 2)

  • None of the others

Erklärung

Frage 43 von 50

1

Which of the following falls under Pecuniary Insurance?

Wähle eine der folgenden:

  • Life insurance

  • Personal Accident insurance

  • Theft insurance

  • Liability insurance

Erklärung

Frage 44 von 50

1

Which of the following are factors that limit the amount of indemnity?

Wähle eine der folgenden:

  • Average clause

  • Agreed Value clause

  • Reinstatement clause

  • "New for old" clause

Erklärung

Frage 45 von 50

1

Which of the following are extensions that increase the amount of indemnity?

Wähle eine der folgenden:

  • Franchise

  • Average clauses

  • Agreed Value clause

  • Excess

Erklärung

Frage 46 von 50

1

Oriental Trading Company had a fire in its insured shop. They claimed a loss of $5000 against its Fire Insurance policy. The loss adjuster who was instructed by the insurer was satisfied that the loss claimed was correct. However the loss adjuster reported that, in his opinion, there was at least $10,000 in stock but only $8000 in insurance cover. If the policy was NOT subject to average clause, how much should the insurer pay?

Wähle eine der folgenden:

  • $2000

  • $4000

  • $5000

  • $8000

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Frage 47 von 50

1

New World Trading Company had a fire in its insured shop. They claimed a loss of $9000 against the Fire Insurance policy. The loss adjuster who was instructed by the insurer was satisfied that the loss claimed was correct. However the loss adjuster reported that, in his opinion, there was at least $30,000 in stock but only $20,000 in insurance cover. If the policy was subject to average clause, how much should the insurer pay?

Wähle eine der folgenden:

  • $3000

  • $6000

  • $9000

  • $11000

Erklärung

Frage 48 von 50

1

Which of the following is similar to an Excess but once the Excess is exceeded, the loss is payable in full?

Wähle eine der folgenden:

  • Average Clause

  • Franchise

  • Limit of Liability

  • Deductible

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Frage 49 von 50

1

Extensions are added to a policy, so that:

Wähle eine der folgenden:

  • The insured can recover more than a strict indemnity

  • The insurer pays less than the strict indemnity

  • The premium is lower

  • The policy can be extended to cover for a longer period of time

Erklärung

Frage 50 von 50

1

Which of the following clauses is NOT categorized as an extension?

Wähle eine der folgenden:

  • Reinstatement Clause

  • "New for Old" Clause

  • Limit of Liability Clause

  • Agreed Value Clause

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