MF0009 Insurance and Risk Management
Section A: 1 – 20: each question carries 1-mark Section B: 21 – 31: each question carries 2-mark Section C: 32-38: each question carries 4-mark
Section A 1. What does risk imply? a) Bright future b) Doubt about future c) Worse position d) No future 2. Chance may be defined as: a) A favourable outcome b) A different outcome c) Fluctuating outcome d) Undefined outcome 3. One of the following is not the meaning of Risk – a) Risk as the cause b) Risk as loss c) Risk as the subject d) Risk as the likelihood 4. Chance is _________ Risk a) Same as b) Different from c) Similar to d) Not related to 5. Objective risk is defined as a) Relative variation of actual and expected loss b) Absolute value of money lost c) Drunk driver may not arrive at home d) Personal Mental uncertainty 6. Uncertainty refers to all of the following except one – a) The outcome is not certain b) the outcome is not known c) characterized by doubt d) Probability is known before the event 7. Importance of liability risk are great because of the following except one – a) No maximum upper limit b) Lien can be placed on your income
c) Upper limit is 150% of the value d) Legal defence cost can be enormous Risk Management is the process of – a) Identifying loss exposures faced by an organisation and selecting the most appropriate techniques for treating such exposures b) Identifying loss exposures faced by each stakeholder of an organization c) Selecting the most appropriate techniques for treating loss exposures d) Identifying the loss of the organization Risk management is ______ insurance management. a) Same as b) Different from c) Broader concept than d) Completely opposite of Risk management differs from general management in its ______. a) Scope b) Advantages c) Disadvantages d) Outlook The elements of protection and investment are present in case of ______. a) Auto insurance b) Property insurance c) Medical insurance d) Life insurance Indemnity is the ________. a) Defence from enemy b) Profit from business c) Protection again possible damage or less d) Defence again financial breakdown Objective risks _______ when actions are taken that decrease the chance of loss. a) Must decrease b) May increase c) May decrease d) Remain unchanged Insurance contract is broadly classified as – a) life and non-life b) health and marine c) life and fire d) non-life and health According to IRDA 1999, which is not true to insurance business – a) Only Indian insurance company can do business b) Foreign equity share not to exceed 26% c) The company should be registered under companies act 1956 d) None of the above IRDA license is to be renewed in every __ year(s) a) Three
b) One c) Two d) Four Which of the following is true about Tariff Advisory Committee (TAC)? a) It is empowered to control and regulate rates b) It ensures that there is no discrimination between risked with same hazard c) It considers the past and prospective losses d) all of the above The union of banking sector and the insurance industry is known as – a) Bancaasurance b) Distribution channel c) Creative channel d) Customer channel Indian Insurance Industry opened up to private sector in the year a) 1998 b) 1999 c) 2000 d) 2001 Bancassurance does not tap the following customers a) Middle income customers b) Existing customers of the bank c) Non-customers of the bank d) Internet users
Section B 21. Subjective Risk is defined as a) uncertainty based on a person’s mental condition b) uncertainty based on a person’s state of mind c) both a) and b) above d) None of the above 22. All but one of the following are classes of hazard a) Physical b) Moral c) Morale d) Mental 23. Objective risk __________________ as the number of exposures increases. a) Increases b) Decreases c) Multiplies d) Remains the same 24. Importance of the risk of poor health has...