Ic38 Q - A English

IC-38
INSURANCE AGENTS
GENERAL
CHAPTER 1
INTRODUCTION TO INSURANCE
Test Yourself 1
Which among the following is the regulator for the insurance industry in India?
I. Insurance Authority of India
II. Insurance Regulatory and Development Authority of India
III. Life Insurance Corporation of India
IV. General Insurance Corporation of India
Test Yourself 2
Which among the following is a secondary burden of risk?
I. Business interruption cost
II. Goods damaged cost
III. Setting aside reserves as a provision for meeting potential losses in the future
IV. Hospitalisation costs as a result of heart attack
Test Yourself 3
Which among the following is a method of risk transfer?
I. Bank FD
II. Insurance
III. Equity shares
IV. Real estate
Test Yourself 4
Which among the following scenarios warrants insurance?
I. The sole bread winner of a family might die untimely
II. A person may lose his wallet
III. Stock prices may fall drastically
IV. A house may lose value due to natural wear and tear
Test Yourself 5
Which of the below insurance scheme is run by an insurer and not sponsored by the
Government?
I. Employees State Insurance Corporation
II. Crop Insurance Scheme
III. Jan Arogya
IV. All of the above
Answer 1
The correct option is II.
Insurance Regulatory and Development Authority of India is the regulator for the
insurance industry in India.
Answer 2
The correct option is III.

The need for setting aside reserves as a provision for potential losses in the future
is a secondary burden of risk.
Answer 3

Insurance is a method of risk transfer.
Answer 4
The correct option is I.

The bread winner of a family might die untimely leaving the entire family to fend
for itself, such a scenario warrants purchasing of life insurance.
Answer 5

The Jan Arogya insurance scheme is run by an insurer and not sponsored by the
Government.
Self-Examination Questions
Question 1
Risk transfer through risk pooling is called ________.

I. Savings
II. Investments
III. Insurance
IV. Risk mitigation
Question 2
The measures to reduce chances of occurrence of risk are known as _____.

I. Risk retention
II. Loss prevention
III. Risk transfer
IV. Risk avoidance
Question 3
By transferring risk to insurer, it becomes possible ___________.

I. To become careless about our assets
II. To make money from insurance in the event of a loss
III. To ignore the potential risks facing our assets
IV. To enjoy peace of mind and plan one‟s business more effectively
Question 4
Origins of modern insurance business can be traced to __________.
I. Bottomry
II. Lloyds
III. Rhodes
IV. Malhotra Committee
Question 5
In 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
IV. One decides to bear the risk and its effects
Question 6
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
Question 7
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/-
Question 8
Which of the following statements is true?

I. Insurance is a method of sharing the losses of a „few‟ by „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 a „many‟ by a few
IV. Insurance is a method of transferring the gains of a few to the many
Question 9
Why do insurers arrange for survey and inspection of the property before
acceptance of a risk?
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
Question 10
Which of the below option best describes the process of insurance?

I. Sharing the losses of many by a few
II. Sharing the losses of few by many
III. One sharing the losses of few
IV. Sharing of losses through subsidy
Answers to Self-Examination Questions

Answer 1

Risk transfer through risk pooling is called insurance.
Answer 2

The measures to reduce chances of occurrence of risk are known as loss prevention
measures.
Answer 3
The correct option is IV.

By transferring risk to insurer, it becomes possible to enjoy peace of mind and plan
one‟s business more effectively.
Answer 4

Origins of modern insurance business can be traced to Lloyd‟s.
Answer 5

In the insurance context „risk retention‟ indicates a situation where one decides to
bear the risk and its effects.
Answer 6

Insurance pays when there is loss of asset.
Answer 7

Rs. 200 per household should cover the loss.
Answer 8

Insurance is a method of sharing the losses of a „few‟ by „many‟.
Answer 9

Before acceptance of a risk, insurers arrange survey and inspection of the property
to assess the risk for rating purposes.
Answer 10
Insurance may be considered as a process by which the losses of a few, who are unfortunate
to suffer such losses, are shared amongst those exposed to similar uncertain events /
situations.
CHAPTER 2
CUSTOMER SERVICE
Test Yourself 1
What is meant by customer lifetime value?
I. Sum of costs incurred while servicing the customer over his lifetime
II. Rank given to customer based on business generated
III. Sum of economic benefits that can be achieved by building a long term
relationship with the customer
IV. Maximum insurance that can be attributed to the customer
Test Yourself 2
Identify the scenario where a debate on the need for insurance is not required.
I. Property insurance
II. Business liability insurance
III. Motor insurance for third party liability
IV. Fire insurance
Test Yourself 3
As per the Consumer Protection Act, 1986, who cannot be classified as a consumer?
I. Hires goods / services for personal use
II. A person who buys goods for resale purpose
III. Buys goods and services for a consideration and uses them
IV. Uses the services of another for a consideration
Test Yourself 4
What does not go on to make a healthy relationship?
I. Attraction
II. Trust
III. Communication
IV. Scepticism
Test Yourself 5
Which among the following is not an element of active listening?
I. Paying good attention
II. Being extremely judgemental
III. Empathetic listening
IV. Responding appropriately
Test Yourself 6
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. Maintaining confidentiality of client‟s business and personal information
III. Placing self-interest ahead of client‟s interests
IV. Placing client‟s interest ahead of self interest
Answers to Test Yourself

Answer 1

Sum of economic benefits that can be achieved by building a long term relationship
with the customer is referred to as customer lifetime value.
Answer 2

Motor insurance for third party liability is mandatory by law and hence a debate on
its need is not required.
Answer 3

As per the Consumer Protection Act, 1986, a person who buys goods for resale
purpose cannot be classified as consumer.
Answer 4

Scepticism does not go on to make a healthy relationship.
Answer 5

Being extremely judgemental is not an element of active listening.
Answer 6

Placing self-interest ahead of client‟s interests is not ethical behaviour.
Question 1
_____________ is not a tangible good.

I. House
II. Insurance
III. Mobile Phone
IV. A pair of jeans
Question 2
_______________ is not an indicator of service quality.

I. Cleverness
II. Reliability
III. Empathy
IV. Responsiveness
Question 3
In India _______________ insurance is mandatory.

I. Motor third party liability
II. Fire insurance for houses
III. Travel insurance for domestic travel
IV. Personal accident
Question 4
One of the methods of reducing insurance cost of an insured is __________

I. Reinsurance
II. Deductible
III. Co-insurance
IV. Rebate
Question 5
A customer having complaint regarding his insurance policy can approach IRDA
through
I. IGMS
II. District Consumer Forum
III. Ombudsman
IV. IGMS or District Consumer Forum or Ombudsman
Question 6
Consumer Protection Act deals with:

I. Complaint against insurance companies
II. Complaint against shopkeepers
III. Complaint against brand
IV. Complaint against insurance companies, brand and shopkeepers
Question 7
___________ has jurisdiction to entertain matters where value of goods or services

and the compensation claim is up to 20 lakhs
I. High Court
II. District Forum
III. State Commission
IV. National Commission
Question 8
In customer relationship the first impression is created:

I. By being confident
II. By being on time
III. By showing interest
IV. By being on time, showing interest and being confident
Question 9
Select the correct statement:

I. Ethical behaviour is impossible while selling insurance
II. Ethical behaviour is not necessary for insurance agents
III. Ethical behaviour helps in developing trust between the agent and the insurer
IV. Ethical behaviour is expected from the top management only
Question 10
Active Listening involves:

I. Paying attention to the speaker
II. Giving an occasional nod and smile
III. Providing feedback
IV. Paying attention to the speaker, giving an occasional nod and smile and
providing feedback

Answer 1

Insurance is not a tangible good.
Answer 2

Cleverness is not an indicator of service quality.
Answer 3

Motor third party liability insurance is mandatory in India.
Answer 4

One of the methods of reducing insurance cost of an insured is the deductible
clause in a policy.
Answer 5

A customer having complaint regarding his insurance policy can approach IRDA
through IGMS.
Answer 6

Consumer Protection Act deals with complaint against insurance companies,
shopkeepers and brands.
Answer 7

District Forum has jurisdiction to entertain where value of goods or services and
the compensation claim is up to 20 lakhs.
Answer 8

In customer relationship the first impression is created by being confident, on time
and by showing interest.
Answer 9
Ethical behaviour helps in developing trust in the agent and the insurer.
Answer 10

Active Listening involves paying attention to the speaker, giving an occasional nod
and smile and providing feedback.
CHAPTER 3
GRIEVANCE REDRESSAL MECHANISM
Test Yourself 1
The ______________ has jurisdiction to entertain complaints, where value of the
goods or services and the compensation claimed is up to Rs.20 lakhs.
I. District Forum
II. State Commission
III. Zilla Parishad
IV. National Commission

Answer 1
The correct answer is I.

The District Forum has jurisdiction to entertain complaints, where value of the
goods or services and the compensation claimed is up to Rs. 20 lakhs.
Question 1
Expand the term IGMS.

I. Insurance General Management System
II. Indian General Management System
III. Integrated Grievance Management System
IV. Intelligent Grievance Management System
Question 2
Which of the below consumer grievance redressal agencies would handle consumer
disputes amounting between Rs. 20 lakhs and Rs. 100 lakhs?
I. District Forum
II. State Commission
III. National Commission
IV. Zilla Parishad
Question 3
Which among the following cannot form the basis for a valid consumer complaint?
I. Shopkeeper charging a price above the MRP for a product
II. Shopkeeper not advising the customer on the best product in a category
III. Allergy warning not provided on a drug bottle
IV. Faulty products
Question 4
Which of the below will be the most appropriate option for a customer to lodge an
insurance policy related complaint?
I. Police
II. Supreme Court
III. Insurance Ombudsman
IV. District Court
Question 5
Which of the below statement is correct with regards to the territorial jurisdiction
of the Insurance Ombudsman?
I. Insurance Ombudsman has National jurisdiction
II. Insurance Ombudsman has State jurisdiction
III. Insurance Ombudsman has District jurisdiction
IV. Insurance Ombudsman operates only within the specified territorial limits
Question 6
How is the complaint to be launched with an insurance ombudsman?

I. The complaint is to be made in writing
II. The complaint is to be made orally over the phone
III. The complaint is to be made orally in a face to face manner
IV. The complaint is to be made through newspaper advertisement
Question 7
What is the time limit for approaching an Insurance Ombudsman?

I. Within two years of rejection of the complaint by the insurer
II. Within three years of rejection of the complaint by the insurer
III. Within one year of rejection of the complaint by the insurer
IV. Within one month of rejection of the complaint by the insurer
Question 8
Which among the following is not a pre-requisite for launching a complaint with the
Ombudsman?
I. The complaint must be by an individual on a „Personal Lines‟ insurance
II. The complaint must be lodged within 1 year of the insurer rejecting the
complaint
III. Complainant has to approach a consumer forum prior to the Ombudsman
IV. The total relief sought must be within an amount of Rs.20 lakhs.
Question 9
Are there any fee / charges that need to be paid for lodging the complaint with the
Ombudsman?
I. A fee of Rs 100 needs to be paid
II. No fee or charges need to be paid
III. 20% of the relief sought must be paid as fee
IV. 10% of the relief sought must be paid as fee
Question 10
Can a complaint be launched against a private insurer?

I. Complaints can be launched against public insurers only
II. Yes, complaint can be launched against private insurers
III. Complaint can be launched against private insurers only in the Life Sector
IV. Complaint can be launched against private insurers only in the Non-Life Sector

Answer 1

IGMS stands for Integrated Grievance Management System.
Answer 2

State Commission would handle consumer disputes amounting between Rs. 20 lakhs
and Rs. 100 lakhs.
Answer 3

Shopkeeper not advising the customer on the best product in a category cannot
form the basis of a valid consumer complaint.
Answer 4

Complaint is to be lodged with the Insurance Ombudsman under whose territorial
jurisdiction the insurer‟s office falls.
Answer 5

Insurance Ombudsman operates only within the specified territorial limits.
Answer 6

The complaint to the ombudsman is to be made in writing.
Answer 7

The complainant must approach the ombudsman within one year of rejection of
the complaint by the insurer.
Answer 8

Complainant need not approach a consumer forum prior to the Ombudsman.
Answer 9
No fee / charges need to be paid for lodging the complaint with the Ombudsman.
Answer 10

Yes, a complaint can be launched against private insurers.
CHAPTER 5
LEGAL PRINCIPLES OFANINSURANCECONTRACT
Test Yourself 1
Which among the following is an example of coercion?
I. Ramesh signs a contract without having knowledge of the fine print
II. Ramesh threatens to kill Mahesh if he does not sign the contract
III. Ramesh uses his professional standing to get Mahesh to sign a contract
IV. Ramesh provides false information to get Mahesh to sign a contract
Test Yourself 2
Which among the following options cannot be insured by Ramesh?
I. Ramesh‟s house
II. Ramesh‟s spouse
III. Ramesh‟s friend
IV. Ramesh‟s parents

Answer 1

Ramesh threatening to kill Mahesh if he does not sign the contract is an example of
coercion.
Answer 2

Ramesh does not have insurable interest in his friend‟s life and hence cannot insure
the same.
Question 1
Which element of a valid contract deals with premium?

I. Offer and acceptance
II. Consideration
III. Free consent
IV. Capacity of parties to contract
Question 2
_____________ relates to inaccurate statements, which are made without any
fraudulent intention.
I. Misrepresentation
II. Contribution
III. Offer
IV. Representation
Question 3
________________ involves pressure applied through criminal means.

I. Fraud
II. Undue influence
III. Coercion
IV. Mistake
Question 4
Which among the following is true regarding life insurance contracts?

I. They are verbal contracts not legally enforceable
II. They are verbal which are legally enforceable
III. They are contracts between two parties (insurer and insured) as per
requirements of Indian Contract Act, 1872
IV. They are similar to wager contracts
Question 5
Which of the below is not a valid consideration for a contract?

I. Money
II. Property
III. Bribe
IV. Jewellery
Question 6
Which of the below party is not eligible to enter into a life insurance contract?
I. Business owner
II. Minor
III. House wife
IV. Government employee
Question 7
Which of the below action showcases the principle of “Uberrima Fides”?

I. Lying about known medical conditions on an insurance proposal form
II. Not revealing known material facts on an insurance proposal form
III. Disclosing known material facts on an insurance proposal form
IV. Paying premium on time
Question 8
Which of the below is not correct with regards to insurable interest?

I. Father taking out insurance policy on his son
II. Spouses taking out insurance on one another
III. Friends taking out insurance on one another
IV. Employer taking out insurance on employees
Question 9
When is it essential for insurable interest to be present in case of life insurance?

I. At the time of taking out insurance
II. At the time of claim
III. Insurable interest is not required in case of life insurance
IV. Either at time of policy purchase or at the time of claim
Question 10
Find out the proximate cause for death in the following scenario?
Ajay falls off a horse and breaks his back. He lies there in a pool of water and
contracts pneumonia. He is admitted to the hospital and dies because of
pneumonia.
I. Pneumonia
II. Broken back
III. Falling off a horse
IV. Surgery

Answer 1

The element of a valid contract deals with premium is consideration.
Answer 2

Misrepresentation relates to inaccurate statements, which are made without any
fraudulent intention.
Answer 3

Coercion involves pressure applied through criminal means.
Answer 4

Life insurance contracts are contracts between two parties (insurer and insured) as
per requirements of Indian Contract Act, 1872.
Answer 5

Bribe is not a valid consideration for a contract.
Answer 6

Minors are not eligible to contract a life insurance contract.
Answer 7

Disclosing known material facts on an insurance proposal form is in tune with the
principle of “Uberrima Fides”.
Answer 8

Friends cannot take out insurance on one another as there is no insurable interest
present.
Answer 9

In case of life insurance insurable interest needs to be present at the time of
taking out insurance.
Answer 10

Falling off the horse is the proximate cause for Ajay‟s death.
CHAPTER 6
INTRODUCTION TO HEALTH INSURANCE
Summary
a) Insurance in some form or other existed many centuries ago but its modern form
is only a few centuries old. Insurance in India has passed through many stages with
government regulation.
b) Health of its citizens being very important, governments play a major role in
creating a suitable healthcare system.
c) Level of healthcare provided depends on many factors relating to a country‟s

population.
d) The three type of healthcare are primary, secondary and tertiary depending on
the level of medical attention required. Cost of healthcare rises with each level
with tertiary care being the costliest.
e) India has its own peculiar challenges such as population growth and urbanization
which require proper healthcare.
f) The government was also the first to come up with schemes for health insurance
followed later by commercial insurance by private insurance companies.
g) The health insurance market is made up of many players some providing the
infrastructure, with others providing insurance services, intermediaries such as
brokers, agents and third party administrators servicing health insurance business
and also other regulatory, educational as well as legal entities playing their role.
CHAPTER 8
HEALTH INSURANCE PRODUCTS
Test Yourself 1
Though the duration of cover for pre-hospitalization expenses would vary from
insurer to insurer and is defined in the policy, the most common cover is for
________ pre-hospitalization.
I. Fifteen days
II. Thirty days
III. Forty Five days
IV. Sixty days
Test Yourself 2
As per IRDA guidelines, a ________ grace period is allowed for renewal of
individual health policies.
I. Fifteen days
II. Thirty days
III. Forty Five days
IV. Sixty days

Answer 1

Though the duration of cover for pre-hospitalization expenses would vary from
insurer to insurer and is defined in the policy, the most common cover is for thirty
days pre-hospitalization.
Answer 2

As per IRDA guidelines, a 30 days grace period is allowed for renewal of individual
health policies.
Question 1
Which of the below statement is correct with regards to a hospitalization expenses

policy?
I. Only hospitalization expenses are covered
II. Hospitalization as well as pre and post hospitalization expenses are covered
III. Hospitalization as well as pre and post hospitalization expenses are covered and
a lumpsum amount is paid to the family members in the event of insured‟s death
IV. Hospitalization expenses are covered from the first year and pre and post
hospitalization expenses are covered from the second year if the first year is claim
free.
Question 2
Identify which of the below statement is correct?

I. Health insurance deals with morbidity
II. Health insurance deals with mortality
III. Health insurance deals with morbidity as well as mortality
IV. Health insurance neither deals with morbidity or mortality
Question 3
Which of the below statement is correct with regards to cashless service provided
in health insurance?
I. It is an environment friendly go-green initiative started by insurance companies
to promote electronic payments so that circulation of physical cash notes can be
reduced and trees can be saved.
II. Service is provided free of cost to the insured and no cash is to be paid as the
payment is made by the Government to the insurance company under a special
scheme
III. All payments made by insured have to be made only through internet banking or
cards as cash is not accepted by the insurance company
IV. The insured does not pay and the insurance company settles the bill directly
with the hospital
Question 4
Identify the correct full form of PPN with regards to hospitals in health insurance.
I. Public Preferred Network
II. Preferred Provider Network
III. Public Private Network
IV. Provider Preferential Network
Question 5
Identify which of the below statement is incorrect?

I. An employer can take a group policy for his employees
II. A bank can take a group policy for its customers
III. A shopkeeper can take a group policy for its customers
IV. A group policy taken by the employer for his employees can be extended to
include the family members of the employees

Answer 1

In a hospitalization expenses policy, hospitalization as well as pre and post
hospitalization expenses are covered.
Answer 2

Health insurance deals with morbidity (rate of incidence of disease).
Answer 3

Under the cashless service, the insured does not pay and the insurance company
settles the bill directly with the hospital.
Answer 4

PPN stands for Preferred Provider Network.
Answer 5

Statements I, II and IV are correct. Statement III is incorrect as a shopkeeper cannot take
group insurance for its customers.
CHAPTER 9
HEALTH INSURANCE UNDERWRITING
Test Yourself 1
Underwriting is the process of ___________.
I. Marketing insurance products
II. Collecting premiums from customers
III. Risk selection and risk pricing
IV. Selling various insurance products
Test Yourself 2
The principle of utmost good faith in underwriting is required to be followed by
___________.
I. The insurer
II. The insured
III. Both the insurer and the insured
IV. The medical examiners
Test Yourself 3
Insurable interest refers to ____________.
I. Financial interest of the person in the asset to be insured
II. The asset which is already insured
III. Each insurer‟s share of loss when more than one company covers the same loss
IV. The amount of the loss that can be recovered from the insurer
Test Yourself 4
Which of the following statements about medical underwriting is incorrect?
I. It involves high cost in collecting and assessing medical reports.
II. Current health status and age are the key factors in medical underwriting for
health insurance.
III. Proposers have to undergo medical and pathological investigations to assess
their health risk profile.
IV. Percentage assessment is made on each component of the risk.
Test Yourself 5
1) In a group health insurance, any of the individual constituting the group could
anti-select against the insurer.
2) Group health insurance provides coverage only to employer-employee groups.
I. Statement 1 is true and statement 2 is false

II. Statement 2 is true and statement 1 is false
III. Statement 1 and statement 2 are true
IV. Statement 1 and statement 2 are false

Answer 1

Underwriting is the process of risk selection and risk pricing.
Answer 2

The principle of utmost good faith in underwriting has to be followed by both the
insurer and the insured.
Answer 3

Insurable interest refers to the pecuniary or the financial interest of a person in
the asset he is going to get insured and can suffer financial loss in the event of any
damage to such asset.
Answer 4

Percentage and numerical assessment is made on each component of the risk in
numerical rating method, and not medical underwriting method.
Answer 5

In a group health insurance, when all members of a group are covered under a
group health insurance policy, the individuals constituting the group cannot anti-
select against the insurer.
In addition to employee-employer groups, insurers have provided group health
insurance coverage to varied type of groups such as: labour unions, trusts and
societies, professional associations, clubs and other fraternal organisations.
Question 1
Which of the following factor does not affect the morbidity of an individual?
I. Gender
II. Spouse job
III. Habits
IV. Residence location
Question 2
According to the principle of indemnity, the insured is paid for __________.

I. The actual losses to the extent of the sum insured
II. The sum insured irrespective of the amount actually spent
III. A fixed amount agreed between both the parties
IV. The actual losses irrespective of the sum assured
Question 3
The first and the primary source of information about an applicant, for the
underwriter is his ________________.
I. Age proof documents
II. Financial documents
III. Previous medical records
IV. Proposal form
Question 4
The underwriting process is completed when ___________________.

I. All the critical information related to the health and personal details of the
proposer are collected through the proposal form
II. All the medical examinations and tests of the proposer are completed
III. The received information is carefully assessed and classified into appropriate
risk categories
IV. The policy is issued to the proposer after risk selection and pricing.
Question 5
Which of the following statements about the numerical rating method is incorrect?
I. Numerical rating method provides greater speed in the handling of a large
business with the help of trained personnel.
II. Analysis of difficult or doubtful cases is not possible on the basis of numerical
points without medical referees or experts.
III. This method can be used by persons without any specific knowledge of medical
science.
IV. It ensures consistency between the decisions of different underwriters.

Answer 1

The morbidity of an individual is not affected by their spouse‟s job, though their
own occupation is one of the important factors which can affect their morbidity.
Answer 2

According to the principle of indemnity, insured is compensated for the actual
costs or losses, but to the extent of the sum insured.
Answer 3

The primary source of information about an applicant, for the underwriter is his
proposal form or application form, in which all the critical information related to
the health and personal details of the proposer are collected.
Answer 4

The underwriting process is completed when the received information is carefully
assessed and classified into appropriate risk categories.
Answer 5
The correct answer is II.

A more careful analysis of difficult or doubtful cases is made possible by numerical rating
method because past experience with reference to the doubtful points is expressed
numerically in terms of a known standard and shadings.
Test Yourself 1
Who among the following is not a stakeholder in insurance claim process?
I. Insurance company shareholders
II. Human Resource Department
III. Regulator
IV. TPA
Test Yourself 2
Which of the following document is maintained at the hospital detailing all
treatment done to an in-patient?
I. Investigation report
II. Settlement sheet
III. Case paper
IV. Hospital registration certificate
Test Yourself 3
The amount of provision made for all claims in the books of the insurer based on
the status of the claims is known as ________.
I. Pooling
II. Provisioning
III. Reserving
IV. Investing
Test Yourself 4
Which of the following documents are not required to be submitted for Permanent
Total Disability claim?
I. Duly completed Personal Accident claim form signed by the claimant.
II. Attested copy of First Information Report if applicable.
III. Permanent disability certificate from a civil surgeon or any equivalent
competent doctors certifying the disability of the insured.
IV. Fitness certificate from the treating doctor certifying that the insured is fit to
perform his normal duties.
Test Yourself 5
________________ are paid upfront by Assistance Company and later claimed from
insurance company.
I. Bail bond cases
II. Personal accident claims
III. Overseas travel insurance claims
IV. Untenable claims
Question 1
Who among the following is considered as primary stakeholder in insurance claim
process?
I. Customers
II. Owners
III. Underwriters
IV. Insurance agents/brokers
Question 2
Girish Saxena‟s insurance claim was denied by insurance company. In case of a

denial, what is the option available to Girish Saxena, apart from the representation
to the insurer?
I. To approach Government
II. To approach legal authorities
III. To approach insurance agent
IV. Nothing could be done in case of case denial
Question 3
During investigation, of a health insurance claim presented by Rajiv Mehto,

insurance company finds that instead of Rajiv Mehto, his brother Rajesh Mehto had
been admitted to hospital for treatment. The policy of Rajiv Mehto is not a family
floater plan. This is an example of ___________fraud.
I. Impersonation
II. Fabrication of documents
III. Exaggeration of expenses
IV. Outpatient treatment converted to in-patient / hospitalization
Question 4
Under which of the following condition, is domiciliary hospitalization is covered in
a health insurance policy?
I. The condition of the patient is such that he/she can be removed to the
Hospital/Nursing Home , but prefer not to
II. The patient cannot be removed to Hospital/Nursing Home for lack of
accommodation therein
III. The treatment can be carried out only in hospital/Nursing home
IV. Duration of hospitalization is exceeding 24 hours
Question 5
Which of the following codes capture the procedures performed to treat the
illness?
I. ICD
II. DCI
III. CPT
IV. PCT

Answer 1
Customers are primary stakeholder in insurance claim process
Answer 2

In case of insurance claim denial, individuals can approach legal authorities.
Answer 3

This is an example of impersonation, as the person insured is different from person
treated.
Answer 4
Domiciliary treatment is provided in health insurance policy, only when the patient
cannot be removed to Hospital/Nursing Home for lack of accommodation therein
Answer 5

Current Procedure Terminology (CPT) codes capture the procedures performed to
treat the illness.
CHAPTER 11
PRINCIPLES OF INSURANCE
Test Yourself 1
Which one of the following does not represent an insurable risk?
I. Fire
II. Stolen goods
III. Burglary
IV. Loss of goods due to ship capsizing
Test Yourself 2
Which among the following cannot be an element in a valid insurance contract?
I. Offer and acceptance
II. Coercion
III. Consideration
IV. Legality
Test Yourself 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?
I. Pneumonia
II. Horse
III. Horse riding accident
IV. Bad luck

Answer 1

Stolen goods violate the principle of legality and hence do not represent an
insurable risk.
Answer 2

Coercion is not an element of a valid contract.
Answer 3

The horse riding accident set things in motion that eventually resulted in Mr Pinto‟s
death and hence it is the proximate cause.
Question 1
Moral hazard means:

I. Dishonesty or character defects in an individual
II. Honesty and values in an individual
III. Risk of religious beliefs
IV. Hazard of the property to be insured
Question 2
Risk indicates:
I. Fear of unknown
II. Chance of loss
III. Disturbances at public place
IV. Hazard
Question 3
______________ means spreading one‟s investment in different kinds of assets.

I. Pooling
II. Diversification
III. Gambling
IV. Dynamic risk
Question 4
_____________ is not an example of an asset.

I. House
II. Sunlight
III. Plant and machinery
IV. Motor car
Question 5
______________ is not an example of risk.

I. Damage to car due to accident
II. Damage of cargo due to rain water
III. Damage to car tyre due to wear and tear
IV. Damage to property due to fire
Question 6
Earthquake is an example of:

I. Catastrophic risk
II. Dynamic risk
III. Marginal risk
IV. Speculative risk
Question 7
Select the most appropriate logical equivalence for the statement.

Statement: Insurance cannot protect an asset from loss or damage.
I. True
II. False
III. Partially true
IV. Not necessarily true
Question 8
__________________ means transfer of all rights and remedies, with respect to the
subject matter of insurance, from insured to insurer.
I. Contribution
II. Subrogation
III. Legal hazard
IV. Risk pooling
Question 9
An example of a fact which need not be disclosed unless asked for is

______________ by the insurer.
I. Age of the insured
II. Presence of fire extinguisher
III. Heart ailment
IV. Other insurance details
Question 10
________________ is a wrong statement made during negotiation of a contract.

I. Misrepresentation
II. Contribution
III. Offer
IV. Representation

Answer 1

Moral hazard means dishonesty or character defects in an individual.
Answer 2

„Risk‟ indicates a chance of loss.
Answer 3

Diversification means spreading one‟s investment in different kinds of assets.
Answer 4

Sunlight cannot be classified as asset as it fails the test of scarcity and ownership.
Answer 5

Damage as a result of wear and tear cannot be treated as risk.
Answer 6

Earthquake is an example of catastrophic risk.
Answer 7

Insurance cannot protect an asset from loss or damage.
Answer 8

Subrogation means transfer of all rights and remedies, with respect to the subject
matter of insurance, from insured to insurer.
Answer 9

Presence of fire extinguisher need not be disclosed while buying insurance, unless
asked for.
Answer 10

Misrepresentation is a wrong statement made during negotiation of a contract.
CHAPTER 12
DOCUMENTATION
Test Yourself 1
What is the significance of the principle of contribution?
I. It ensures that the insured also contributes a certain portion of the claim along
with the insurer
II. 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
III. 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
IV. It ensures that the premium is contributed by the insured in equal installments
over the year.
Test Yourself 2
As per guidelines, an insurance company has to process an insurance proposal
within __________.
I. 7 days
II. 15 days
III. 30 days
IV. 45 days
Test Yourself 3
In case the premium payment is made by cheque, then which of the below
statement will hold true?
I. The risk may be assumed on the date on which the cheque is posted
II. The risk may be assumed on the date on which the cheque is deposited by the
insurance company
III. The risk may be assumed on the date on which the cheque is received by the
insurance company
IV. The risk may be assumed on the date on which the cheque is issued by the
proposer
Test Yourself 4
Which of the below statement is true with regards to cover notes?
I. Cover notes are predominantly used in life insurance
II. Cover notes are predominantly used in all classes of general insurance
III. Cover notes are predominantly used in health insurance
IV. Cover notes are predominantly used in marine and motor classes of general
insurance
Test Yourself 5
Which of the below statement is correct with regards to a warranty?
I. A warranty is a condition which is implied without being stated in the policy
II. A warranty is a condition expressly stated in the policy
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. If a warranty is breached, the claim can still be paid if it is not material to the
risk
Test Yourself 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 __________.
V. Warranty
VI. Endorsement
VII. Alteration
VIII. Modifications are not possible
Test Yourself 7
Which of the below statement is correct with regards to renewal notice?
I. 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. 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
III. 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
IV. As per regulations there is no legal obligation on insurers to send a renewal
notice to insured before the expiry of the policy

Answer 1

The principle of contribution 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
Answer 2

As per guidelines, an insurance company has to process an insurance proposal
within 15 days.
Answer 3

In case the premium payment is made by cheque, then the risk may be assumed on
the date on which the cheque is posted.
Answer 4
The correct option answer is IV.

Cover notes are predominantly used in marine and motor classes of general
insurance.
Answer 5

A warranty is a condition expressly stated in the policy.
Answer 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 endorsement.
Answer 7

As per regulations there is no legal obligation on insurers to send a renewal notice
to insured before the expiry of the policy.
Question 1
__________ is the maximum limit of liability of insurer under the policy

I. Sum insured
II. Premium
III. Surrender value
IV. Amount of loss
Question 2
_______________ is the consideration or price paid by insured under a contract

I. Claim amount
II. Surrender value
III. Maturity amount
IV. Premium
Question 3
A document which provides an evidence of contract of insurance is called________

I. Policy
II. Cover note
III. Endorsement
IV. Certificate of insurance
Question 4
The duty of disclosure arises

I. Prior to inception of the policy
II. After inception of the policy
III. Prior to inception and continues during the policy
IV. There is no such duty
Question 5
Material fact
I. Is the value of all material covered in a policy
II. Not important for assessing the risk
III. Is important as it influences the decision of the underwriter
IV. Is not important as it has no bearing on the decision of the underwriter
Question 6
Fire proposal seeks to know

I. Process of manufacture
II. Details of material stored
III. Construction of building
IV. All the above
Question 7
Premium cannot be received

I. In cash
II. By cheque
III. By promissory note
IV. By credit card
Question 8
The certificate of Motor Insurance

I. Is not mandatory
II. Has to be kept with self always
III. Has to be kept in the car always
IV. Has to be kept in the bank locker
Question 9
A warranty
I. Is a condition expressly stated in the policy
II. Has to be complied with
III. Both a and b
IV. None of the above
Question 10
Renewal Notice for Motor insurance is issued by

I. The Insured before expiry of the policy
II. The Insurer before expiry of the policy
III. The Insured after expiry of the policy
IV. The Insurer after expiry of the policy

Answer 1

Sum insured is the maximum limit of liability of insurer under the policy.
Answer 2

Premium is the consideration or price paid by insured under a contract.
Answer 3

A document which provides an evidence of contract of insurance is called policy.
Answer 4

The duty of disclosure arises prior to the inception and continues even during the
policy
Answer 5

Material fact is important as it influences the decision of the underwriter.
Answer 6

Fire proposal seeks to know process of manufacture, details of material stored and
construction of the building.
Answer 7
The correct option is III

Premium cannot be received by promissory note.
Answer 8

The certificate of Motor Insurance has to be kept in car always.
Answer 9
The correct option is III

A warranty is a condition expressly stated in a policy and has to be complied with.
Answer 10

Renewal Notice for Motor insurance is issued by the insurer before expiry of the
policy
CHAPTER 13
THEORY AND PRACTICE OF PREMIUM RATING
Test Yourself 1
Identify the two factors that affect insurance ratemaking.
I. Probability and severity of risk
II. Source and nature of risk
III. Source and timing of risk
IV. Nature and impact of risk
Test Yourself 2
What is pure premium?
I. Premium sufficiently big enough to pay for losses only
II. Premium applicable to marginal members of the society
III. Premium after loading for administrative costs
IV. Premium derived from the most recent loss experience period
Test Yourself 3
What is expected of an agent when she detects a moral hazard?
I. Continue with the insurance as before
II. Report the same to the insurer
III. Ask for a share in the claims
IV. Turn a blind eye
Test Yourself 4
Suggest an insurance scheme for a doctor to protect him from any claims of
negligence against him.
I. Personal accident insurance
II. Liability insurance
III. Marine hull insurance
IV. Health insurance

Answer 1

Probability and severity of risk affect insurance ratemaking.
Answer 2

Pure premium is sufficient enough to pay for losses, however it does not account
for administrative expenses or profit.
Answer 3

An insurance agent should report to the insurer any detection of moral hazard.
Answer 4

Liability insurance can insure the doctor against claims of negligence.
Question 1
_____________ decides whether to accept or not to accept the risk.

I. Assured
II. Underwriter
III. Agent
IV. Surveyor
Question 2
_______________ is the price of a given unit of insurance.

I. Rate
II. Premium
III. Sum Assured
IV. Bonus
Question 3
___________ is the maximum amount that an insurance company will indemnify to

someone who files a claim.
I. Sum insured
II. Premium
III. Rider
IV. Benefits
Question 4
______________ is not a source of information for underwriter.

I. Annual accounts of a proposer
II. Pre-acceptance risk survey of the asset
III. Proposal form
IV. Registration certificate of insurer
Question 5
Hazards are:
I. Factors that increase the impact of losses
II. Factors that increases the frequency of loss
III. Factors that increase the impact and severity of losses
IV. Factors that decrease the impact and severity of losses
Question 6
Which of the following is true?

Physical Hazards:
I. Are not important for rate making
II. Cannot be ascertained
III. Can be calculated from the balance sheet
IV. Can be ascertained from information given in a proposal form
Question 7
In motor insurance one of the warranties is:

I. The vehicle should be washed daily
II. The vehicle should not be used for speed testing
III. The vehicle should not be used for carrying luggage for personal use
IV. The vehicle should not be run more than 200 km per day.
Question 8
The purpose of deductible clause is to:

I. To avoid claim payment
II. To eliminate payment of small claims
III. To harass the policyholder
IV. To increase the premium
Question 9
Installation of sprinkler system in the premises:

I. Increases risk
II. Decreases the risk
III. Neither increases nor decreases risk
IV. Increases risk of hooding
Question 10
Insured‟s declared value in motor insurance includes:

I. Registration
II. Manufacturer‟s cost price
III. Manufacturer‟s selling price
IV. Arbitrary price component
Answer 1

Underwriter decides whether to accept or not to accept the risk.
Answer 2

Rate is the price of a given unit of insurance.
Answer 3

Sum insured is the maximum amount that an insurance company will indemnify to
someone who files a claim.
Answer 4

Registration certificate of insurer is not a source of information for underwriter.
Answer 5

Hazards are factors that increase the impact and severity of losses.
Answer 6

Physical hazards can be ascertained from information given in a proposal form.
Answer 7

In motor insurance one of the warranties is that vehicle should not be used for
speed testing.
Answer 8

The purpose of deductible clause is to eliminate small claims.
Answer 9

Installation of sprinkler system in the premises decreases the risk of fire.
Answer 10

Insured‟s declared value in motor insurance includes manufacturer‟s selling price.
CHAPTER 14
PERSONAL AND RETAIL INSURANCE
Test Yourself 1
Which of the below statement is correct with regards to a householder‟s insurance
policy?
I. 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.
II. A comprehensive policy that tends to offer coverage to most perils; may be
purchased as a less expensive alternative to a named peril policy.
III. A named peril policy or comprehensive policy comes at the same price.
IV. With regards to a householder‟s policy, only a named peril policy can be bought
and comprehensive policies are not available
Test Yourself 2
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?
I. Fixed plate glass
II. Sanitary fittings
III. Neon signs
Test Yourself 3
Motor insurance should be taken in whose name?
I. In the name of the vehicle owner whose name is registered with Regional
Transport Authority
II. 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
III. In the name of any family member of the vehicle owner, including the vehicle
owner, subject to approval from the Regional Transport Authority
IV. 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.

Answer 1

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.
Answer 2

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 fixed
plate glass, sanitary fittings and neon signs.
Answer 3

Motor insurance should be taken in the name of the vehicle owner whose name is
registered with Regional Transport Authority
Question 1
In householder‟s insurance
I. Gold and silver ornaments are covered
II. Content‟s of one‟s shop is covered
III. Cars owned by the family are covered
IV. Parcels sent by post are covered during transit.
Question 2
Householder‟s insurance covers

I. Only the structure of the home
II. Only the Contents of the home
III. Both the structure and contents
IV. Both Structure and contents only when insured is not at home
Question 3
In shop keeper‟s insurance, which of the following are not covered?

I. Machinery breakdown
II. Malicious damage
III. Business interruption
IV. Willful destruction by insured
Question 4
In shop keeper‟s insurance which of the following are usually not covered
I. Money in till/counter at business premises
II. Money in transit from bank to business premises
III. Money in safe at business premises
IV. Money carried by customer to business premises.
Question 5
Shop insurance covers

I. Dishonest acts of employees
II. Dishonest acts of insured
III. Dishonest acts of customers
IV. Dishonest acts of money lenders

Answer 1

In householder‟s insurance gold and silver ornaments are covered.
Answer 2

Householder‟s insurance covers both the structure and contents.
Answer 3

In shopkeeper‟s insurance, willful destruction by insured is not covered.
Answer 4

In shopkeeper‟s insurance money carried by customer to business premises is
usually not covered.
Answer 5

Shop insurance covers dishonest act of employees.
CHAPTER 15
COMMERCIAL INSURANCE
Test Yourself 1
A fire policy for commercial risks covers the perils of ________
I. Explosion
II. Implosion
III. Both of the above
Test Yourself 2
A business interruption insurance policy can be taken only in conjunction with
____________.
I. Standard fire and special perils policy
II. Standard fire and marine policy
III. Standard and special perils policy
IV. Standard Engineering and marine policy
Test Yourself 3
The premium for burglary policy depends on ______________.
I. Nature of insured policy
II. Moral hazard of the insured himself
III. Construction and location of the premises
Test Yourself 4
Which of the below is covered under a money insurance policy?
I. Shortage due to error or omission
II. Loss of cash from one‟s premises due to burglary
III. Loss of money that has been entrusted to other than authorized person
IV. Riot strike and terrorism
Test Yourself 5
Fidelity guarantee insurance indemnifies ________________.
I. Employers against the financial loss suffered by them due to fraud or dishonesty
of their employees
II. employees against the financial loss suffered by them due to fraud or dishonesty
of their employer
III. Employees and employers against the financial loss suffered by them due to
fraud or dishonesty of third party
IV. Shareholders against the financial loss suffered by them due to fraud or
dishonesty of the company management
Test Yourself 6
Which of the below can be covered under a bankers indemnity insurance policy?
I. Money securities lost or damaged whilst within the premises due to fire
II. Forgery or alteration of cheques
III. Dishonesty of employees with reference to money
Test Yourself 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 ____________.
I. Section I
II. Section II
III. Section III
IV. Section IV
Test Yourself 8
Delay in start-up policy is also known as ______________.
I. Machinery Loss of Profits cover
II. Advance Loss of Profits cover
III. Contractors All Risk cover
IV. Contractors Plant & Machinery cover
Test Yourself 9
Which of the following is not covered under Industrial All Risks insurance?
I. Fire and special perils as per fire insurance practice
II. Larceny
III. Machinery breakdown
IV. Electronic equipment
Test Yourself 10
Which branch of insurance offers cover against war perils?
I. Marine policies
II. Aviation policies
III. Both of the above
Test Yourself 11
Under the Public Liability Insurance Act, 1991, how much is the compensation
payable for actual medical expenses?
I. Rs. 6,250
II. Rs, 12,500
III. Rs. 25,000
IV. Rs. 50,000

Answer 1

Fire policy for commercial risks covers the perils of explosion and implosion.
Answer 2

A business interruption insurance policy can be taken only in conjugation with
standard fire and special perils policy.
Answer 3

The premium for burglary policy depends on the nature of number of things like
insured property, the moral hazard of the insured himself, construction and
location of premises, safety measures (e.g. watchmen, burglar alarm), previous
claims experience etc.
Answer 4

Loss of cash from one‟s premises due to burglary is covered under a money
insurance policy. Riot strike and terrorism can be covered as an extension by
paying an extra premium
Answer 5

A fidelity guarantee insurance policy indemnifies employers against the financial
loss suffered by them due to fraud or dishonesty of their employees.
Answer 6

A banker‟s indemnity insurance policy can cover: money securities lost or damaged
whilst within the premises due to fire, forgery or alteration of cheques, dishonesty
of employees with reference to money.
Answer 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 III.
Answer 8

Delay in start-up policy is also known as Advance Loss of Profit cover.
Answer 9

Larceny is not covered under Industrial All Risks insurance
Answer 10

Marine and aviation is the only branch of insurance that offer cover against war
perils.
Answer 11

Under the Public Liability Insurance Act, 1991, the compensation payable for actual
medical expenses is Rs. 12,500.
Question 1
In Engineering insurance CAR stands for

I. Motor Car
II. Contractors All Risks
III. Company‟s All Risks
IV. Companies All Requirements
Question 2
An employer insures himself from dishonest act of his employees by _________

I. Employees compensation policy
II. Public Liability Insurance policy
III. Fidelity Guarantee Insurance policy
IV. Declaration policy.
Question 3
_________ refers to the body of the ship.

I. Hull
II. Cargo
III. Piracy
IV. Jettison
Question 4
Policy which covers loss or damage to aircraft is ______________.

I. Statutory liability
II. Property insurance
III. Aviation insurance
IV. Money insurance
Question 5
Fire Insurance Policy does not cover damage to property even as add-on cover due
to___________.
I. Floods
II. Earthquake
III. Fire
IV. Bombing due to war
Question 6
Consequential Loss (Fire Policy) covers:

I. Loss of profit due to damage to factory
II. Loss of Goodwill
III. Material wear & tear in machinery
IV. Losses due to foreign exchange fluctuations
Question 7
Premium in Burglary depends on:
I. Security measures
II. Location of Premises
III. Nature of property
Question 8
Contractor‟s All Risk Policy is a variation of:

I. Fire Insurance
II. Life Insurance
III. Engineering Insurance
IV. Marine Insurance
Question 9
Employee‟s Compensation Policy is a type of

I. Liability Insurance
II. Fire Insurance
III. Marine Cargo Insurance
IV. Engineering Insurance
Question 10
Money Insurance Policy covers:

I. Cash in hand
II. Money invested in Mutual Fund
III. Money lying in Saving Bank
IV. Money deposited with post office.

Answer 1

In Engineering insurance CAR stands for Contractors All Risks.
Answer 2

An employer insures himself from dishonest act of his employees by Fidelity
Guarantee Insurance policy.
Answer 3

Hull refers to the body of the ship.
Answer 4

Policy which covers loss or damage to aircraft is aviation insurance.
Answer 5
Fire Insurance Policy does not cover damage to property even as add-on cover, due
to bombing or war.
Answer 6

Consequential Loss (Fire Policy) covers loss of profit due to damage to factory.
Answer 7

Premium in burglary depends on security measures, location of premises, nature of
property etc.
Answer 8

Contractor‟s All Risk Policy is a variation of Engineering Insurance.
Answer 9

Employee‟s Compensation Policy is a type of Liability Insurance.
Answer 10

Money insurance policy covers cash in hand.
CHAPTER 16
CLAIMS PROCEDURE
Test Yourself 1
Which of the following activities would not be categorised under professional
settlement of claims?
I. Seeking information relating to the cause of the loss
II. Approaching the claim with a prejudice
III. Ascertaining whether the loss was a result of an insured peril
IV. Quantifying the amount payable under the claim
Test Yourself 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?
I. Notify the insurer of the loss as soon as reasonably possible
II. Notify the insurer at the time of insurance renewal
III. Damage the car further so as to receive a bigger compensation
IV. Ignore the damage
Test Yourself 3
Compare claims investigation and claims assessment.
I. Both claims investigation and assessment are the same thing
II. Investigation tries to determine the validity of the claim whereas assessment is
more concerned with the cause and extent of the loss
III. Assessment tries to determine the validity of the claim whereas investigation is
more concerned with the cause and extent of the loss
IV. Investigation is done before the claim is paid and assessment is done after the
claim is paid
Test Yourself 4
Who is the licensing authority for surveyors?
I. Surveyor Association of India
II. Surveyor Regulatory and Development Authority
III. Insurance Regulatory and Development Authority of India
IV. Government of India
Test Yourself 5
Which among the following documents is most likely to be requested while
examining a cyclone damage claim?
I. Coroner‟s report
II. Report from Fire Brigade
III. Police report
IV. Report from Meteorological Department
Test Yourself 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?
I. Contribution
II. Discharge
III. Subrogation
IV. Indemnity
Test Yourself 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?
I. Insurer‟s decision is final
II. Umpire
III. Arbitrator
IV. Court of Law

Answer 1

Professional settlement of claims does not involve approaching a claim with
prejudice.
Answer 2

A claim needs to be notified as soon as reasonably possible.
Answer 3

Investigation tries to determine the validity of the claim whereas assessment is
more concerned with the cause and extent of the loss.
Answer 4

IRDAI is the licensing authority for surveyors.
Answer 5

Report from Meteorological Department is most likely to be requested while
examining a cyclone damage claim.
Answer 6

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.
Answer 7

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.
Question 1
Intimation of loss is to be made:

I. at the exact time of the loss
II. after 15 days
III. as soon as reasonably possible
IV. any time after the loss
Question 2
Investigation of loss is done by:

I. unlicensed surveyor
II. licensed and qualified surveyor
III. insured‟s representative
IV. any person with a degree in engineering
Question 3
For personal accident claims, report of________ is necessary.

I. Surveyor
II. Doctor
III. Police
IV. Coroner
Question 4
Independent surveyors are required for claims equal to or above_______ as per the
Insurance Act.
I. Rs. 40,000
II. Rs. 15,000
III. Rs. 20,000
IV. Rs. 25,000
Question 5
Claims assessed outside the country in case of travel insurance polices are assessed
by:
I. Indian surveyors
II. Local surveyors in the country of loss
III. Insurer‟s own employees
IV. Claims settling agents named in the policy
Question 6
In case of a fire claim, a report from the fire brigade:

I. is not required
II. is optional for the insured
III. is necessary
IV. is part of the police report
Question 7
What is TAT?
I. Time and Turn
II. Till a Time
III. Time and Tide
IV. Turnaround Time
Question 8
On payment of loss, salvage belongs to:

I. Surveyors
II. Insured
III. Insurer
IV. Local authorities
Question 9
Arbitration is a claim settlement process done ______________.

I. in the court of law
II. by a group of surveyors
III. by arbitrator(s) chosen by the parties involved
IV. arbitrarily by the insurance company‟s employees
Question 10
Insurers under right of subrogation are allowed to recover the loss paid from:
I. Shipping companies only
II. Railways and road carriers only
III. Airlines and Port Trusts only
IV. Shipping companies and railway and road carriers and airlines and port trusts
Answer 1

Intimation of loss is to be made as soon as reasonably possible.
Answer 2

Investigation of loss is done by licensed and qualified surveyor.
Answer 3

For personal accident claims report of a Doctor is necessary.
Answer 4

Independent surveyors are required for claims equal to or above Rs 20000 as per
the Insurance Act.
Answer 5

Claims assessed outside the country in case of travel insurance policies are
assessed by claims settling agents named in the policy.
Answer 6

In case of a fire claim, a report from the fire brigade is required.
Answer 7

TAT is turnaround time.
Answer 8

On payment of loss, salvage belongs to insurer.
Answer 9

Arbitration is a claim settlement process done by arbitrator(s) chosen by the
parties involved.
Answer 10

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.

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IC-38

The correct option is III.

The correct option is II.

The correct option is I.

The correct option is III.

Risk transfer through risk pooling is called ________.

The measures to reduce chances of occurrence of risk are known as _____.

By transferring risk to insurer, it becomes possible ___________.

In insurance context „risk retention‟ indicates a situation where _____.

Which of the following statement is true?

Which of the following statements is true?

Which of the below option best describes the process of insurance?

Answers to Self-Examination Questions

The correct option is III.

The correct option is II.

The correct option is IV.

The correct option is II.

The correct option is IV.

The correct option is IV.

The correct option is II.

The correct option is I.

The correct option is I.

Answers to Test Yourself

The correct option is III.

The correct option is III.

The correct option is II.

The correct option is IV.

The correct option is II.

The correct option is III.

_____________ is not a tangible good.

_______________ is not an indicator of service quality.

In India _______________ insurance is mandatory.

One of the methods of reducing insurance cost of an insured is __________

Consumer Protection Act deals with:

___________ has jurisdiction to entertain matters where value of goods or services

In customer relationship the first impression is created:

Select the correct statement:

Active Listening involves:

Answers to Self-Examination Questions

The correct option is II.

The correct option is I.

The correct option is I.

The correct option is II.

The correct option is I.

The correct option is IV.

The correct option is II.

The correct option is IV.

The correct option is IV.

Answers to Test Yourself

The correct answer is I.

Expand the term IGMS.

How is the complaint to be launched with an insurance ombudsman?

What is the time limit for approaching an Insurance Ombudsman?

Can a complaint be launched against a private insurer?

Answers to Self-Examination Questions

The correct option is III.

The correct option is II.

The correct option is II.