Insurance : Multiple choice questions - 4

DOWNLOAD PDF

LIC Headquarter

1. Which of the following actions must be taken by a line underwriter if policy limits on an application exceed the line underwriter’s binding authority?

1) Seek approval from supervisory personnel within the underwriting department. 2) Accept the application but reclassify the loss exposure. 3) Accept the application and ignore binding authority restrictions. 4) Accept the application as a favor to the producing agent or broker. 5) Decline the application.

2. Numerous factors help shape an insurer’s underwriting policy. Which of the following is NOT a constraint that would cause certain types of insurance or classes of business to be avoided?

1) Reinsurance treaties exclude the business. 2) The insurer’s personnel lack needed marketing and underwriting expertise. 3) Intense competition in the line of business would result in insufficient profit opportunities. 4) The underwriter is experiencing a high hit ratio on policies quoted. 5) Policy forms, rates, and rating plans are not available to the insurer at a reasonable cost.

3. COPE is an acronym describing a common tool used in underwriting the fire peril and other causes of loss to property. What does COPE stand for?

1) Conditions, Omissions, Perils, and Exclusions. 2) Construction, Occupancy, Protection, and External exposure. 3) Commercial, Operations, Production, and Entertainment. 4) Concealment, Omissions, Protection, and Exclusions. 5) Construction, Occupancy, Perils, and External exposure.

4. Which of the following policy provisions does NOT affect the determination of the amount an insurer is obligated to pay at the time of a covered loss to property?

1) The policy’s coverage limit. 2) The insurable interest of all persons insured at policy inception. 3) The policy’s deductible provisions. 4) The policy’s coinsurance provisions. 5) The policy’s provisions for establishing the value of the insured property.

5. Which of the following is NOT a characteristic of umbrella and excess liability insurance?

1) Each requires the insured to pay for losses equal to the self-insured retention or the deductible. 2) Each provides liability coverage in excess of the underlying policy limits. 3) Umbrella liability insurance provides coverage for gaps in the underlying policies but excess liability insurance does not. 4) Both umbrella and excess liability insurers must assume defense of a claim if the underlying insurer cannot due to its insolvency. 5) Loss frequency rather than loss severity is the primary concern in underwriting umbrella and excess liability insurance.

6. Which of the following is an ethical obligation insurers have with regard to using their superior knowledge of loss control and prevention?

1) Earn a profit. 2) Provide funds for government sponsored disaster relief programs. 3) Decline coverage for exposures that may have a loss. 4) Assist in preventing or reducing accidental losses. 5) Discourage risk-taking in business and personal activities.

7. Which of the following statements about premium auditing is true?

1) Premium auditing is verification of premium information included on an insurer’s financial statements. 2) Premium auditing is a methodical examination of the insured’s operations, records, and books of account to determine the actual exposure units and premiums for insurance to be provided in the next policy period. 3) Premium auditing is a regulatory function that determines if the insurer has paid the correct amount of premium taxes to the states in which it operates. 4) Premium auditing is a methodical examination of the insured’s operations, records, and books of account to assist in underwriting decision-making. 5) Premium auditing is a methodical examination of the insured’s operations, records, and books of account to determine the actual exposure units and premiums for insurance already provided.

8. Which of the following is NOT a reason why accurate premium audits are important to the insurer?

1) Undetected premium audit errors may allow the insurer to retain premium overcharges and boost profits. 2) Incomplete or inaccurate premium audits cause costly extra work and a loss of efficiency. 3) Accurate premium audits assure equity in prices charged insured customers that present similar loss exposures. 4) Premium developed from premium audits is fully earned. 5) The insurer’s cash flow depends on timely and accurate billing of auditable commercial insurance.

9. Which of the following is NOT included among an insurer’s claim representatives?

1) Insurance agents and brokers. 2) Independent claim adjusters. 3) Public claim adjusters. 4) Managing general agents (MGAs). 5) Staff claim representatives.

10. Which of the following is NOT a reason that a court of law may find an insurer to be guilty of bad faith claim settlement practices if it has denied payment of a claim?

1) Failing, without legal cause, to fulfill a contractual promise. 2) Mishandling the claim resulting in financial detriment to the insured or third party claimant. 3) Failing to comply with the implied duty of good faith claim settlement. 4) Denying a claim for which coverage was neither provided nor intended in the contract of insurance. 5) Failing to deal with the claimant fairly and in good faith.

11. The central office of the Life Insurance Corporation of India (LIC) is located at

1) Kolkata 2) New Delhi 3) Chennai 4) Pune 5) Mumbai

12. Which of the following is not the name of an Insurance Scheme launched by the Government of India

1) Janashree Bima Yojana 2) Krishi Shramik Sarnajik Suraksha Yojana 3) Shiksha Sahyog Yojana 4) Varsha Bima Yojana 5) National Saving Scheme Programme

13. The Life Insurance Corporation Of India has how many Zonal offices in India ?

1) Five 2) Eight 3) Ten 4) Fifteen 5) None of these

14. As per the news published in various newspapers, Life Insurance policies may become paperless in the near future. This means

1) LIC will not insure any person here after as it has already reached its peak 2) LIC will not ask for any documents from a person who wishes to purchase an Insurance policy 3) All policy related documents and policy certificates will henceforth be available in electronic form and not in their present physical 4) LIC henceforth will not entertain any claim or complaint in written form or on paper. Things should be in electronic condition. 5) None of these

15. The punch line of the advertisement of which of the following organization is “Jindagi ke sath bhi Jindagi ke bad bhi” ?

1) New India Assurance 2) General Insurance Corporation 3) ICICI Prudential 4) Life Insurance Corporation Of India 5) None of these

16. Which of the following insurance companies writes its punch line in the advertisements “Insurance is the subject matter of solicitation” ?

1) CIC 2) LIC 3) ING Vysya Life InsuranceCo. 4) Tata AIG Life Insurance Co 5) None of these

17. If an organization wishes to venture into Insurance Business it has to obtain a licence first from which of the following ?

1) Indian Banks Association (IBA) 2) Security and Exchange Board of India (SEBI) 3) Tariff Advisory Committee (TAC) 4) Insurance Regulatory and Development Authority of India (IRDAI) 5) None of these

18. Which of the following was the parent company of New India Assurance ?

1) LIC 2) GIC 3) Oriental Insurance Co. Ltd. 4) United India Insurance 5) None of these

19. The New India Assurance Company was established in 1919 by

1) Dorab Tata 2) G. D. Birla 3) Jamunalal BajaJ 4) Kamlapat Singhania 5) None of these

20. Which of the following is largest Non Life Insurance Company in India ?

1) ICICI Lombard General Insurance Company Ltd. 2) United India Insurance Company Ltd. 3) General Insurance Company Ltd. 4) New India Assurance Company Ltd. 5) None of these