MCQs (BCOM H 402)
BCOM H 402
Principles and Practices
of Insurance
MCQs [SET 1]
NOTE: The Highlighted and
Bold Options are the correct one.
Q.
1:
Insurance works on the principle of:
(a) Sharing of
losses
(b) Probabilities
(c) Large numbers
(d) All of the
above
Q.
2:
Insurance helps to:
(a) Prevent
adverse situations from occurring
(b) Reduce the
financial consequences of adverse situations
(c) Negate all
consequences of adverse situations
(d) Make assets
continuously productive
Q.
3:
The term ‘Risk’ includes:
(a) Damage to
machinery and property
(b) Impact on the
health or life of a person
(c) Leakage of
toxic products into the atmosphere
(d) All of the
above
Q.
4:
The main purpose of having Life insurance is:
(a) As an avenue
for long-term investment
(b) As a medium
for getting income tax benefits from savings
(c) As a
governmental programme for reducing poverty
(d) None of the
above
Q.
5:
Which of the following intermediaries do not
require IRDA’s licence/ approval to operate in India?
(a) Insurance
Brokers
(b) Insurance
Agents
(c) Third Party
Administrators
(d) All the
above intermediaries require IRDA’s licence/ approval
Q.
6:
An actuary is expected to:
(a) Make an exact
forecast of the future liabilities of policies
(b) Make a
reasonable forecast of the future liabilities of policies
(c) Calculate the
premium required to cover a risk on a long-term basis
(d) Find the
probability of an insured event to happen in non-life policies
Q.
7:
The principle of _____________ ensures that an
insured does not profit by insuring with multiple insurers
(a) Subrogation
(b) Contribution
(c) Co-insurance
(d) Indemnity
Q.
8:
The principle of average applies when the value
is _____________ in the proposal
(a) Understated
(b) Overstated
(c) Not
ascertainable
(d) Negligible
Q.
9:
Fidelity Guarantee Policies cover losses due to
fraud by ____________
(a) Employees
(b) Customers
(c) Borrowers
(d) Suppliers
Q.
10:
CTL as used in insurance
(a) Contributory
Total Loss
(b)
Constructive Total Loss
(c) Construction
Totally Lost
(d) Contractors’
Total Loss
Q.
11:
GA as used in insurance
(a) General
Assurance
(b) General
Average
(c) General
Adjustment
(d) Guaranteed
Assurance
Q.
12:
Which of the following terms matches closest
with ‘Family Floater’?
(a) Health
insurance
(b) Property
insurance
(c) Accidental
injury
(d) Consequential
loss
Q.
13:
In cases where a Life Insurance Agent collects
the premium from the policyholder and remits it to the insurer’s office, he is
acting as an agent of _____
(a) IRDA
(b) the
Insurance Company
(c) the
Policyholder
(d) the broker
Q.
14:
A policy where the policyholder makes a one-time
payment of premium is known as a ______________:
(a) Money-back
policy
(b) Single
premium policy
(c) Salary Savings
Scheme policy
(d) Half-yearly
policy
Q.
15:
State which of the statements given below is correct.
(a) An
organisation can exist only with employees
(b) An
organisation can exist only with different sections
(c) An
organisation can exist only with its own office building
(d) An
organisation can exist without a purpose
Q.
16:
..… may be described as a social device to
reduce or eliminate risk of loss to life and property.
(a) investment
(b) saving
(c) insurance
(d) loan
Q.
17:
State which of the statements given below is
correct
(a) People
generally feel that life related risks are imminent
(b) Religious
beliefs interfere with the purchase of life insurance
(c) People are
always keen to buy insurance
(d) Life insurance
cannot be denied to anyone at any time
Q.
18:
Which of the following is/ are important
activities of an organisation’s Accounts Department?
(a) Keeping
control on cash
(b) Investments of
funds
(c) Processing
bills
(d) All of the
above
Q.
19:
Which of the following is an important reason
for insurers to sell life insurance policies through agents?
(a) The benefits
of life insurance policies are simple and clear to all
(b) People can
decide which policy is best for them
(c) Agents have to
earn their commissions
(d) Many people
require personalised guidance for selecting the right policy
Q.
20:
Compared to the premium for a Whole Life plan,
the premium for an Endowment plan will be ____________ for the same age
(a) more
(b) less
(c) the same
(d) double
Q.
21:
A nomination can be made only in favour of
________________
(a) a bank
(b) spouse and
children with guardian
(c) spouse and
minor children
(d) any
individual
Q.
22:
Select the expanded form of SA as commonly used
in life insurance
(a) Sum Assured
(b) Surrender of
Assurance
(c) Supplementary
Assurance
(d) Stamp Act
Q.
23:
Select the expanded form of OR as commonly used
in life insurance
(a) Oral
Rehydration
(b) Once Renewed
(c) Ordinary
Rates
(d) Ordinary
Renewal
Q.
24:
Select the expanded form of SV as commonly used
in life insurance
(a) Summary
Valuation
(b) Selected Value
(c) Surrender
Value
(d) Stamp Value
Q.
25:
Which of the following terms matches closest
with ‘Automatic Teller Machines’?
(a) Divisional
Offices
(b) Branch Offices
(c) Agents
(d) Information
Kiosks
Q.
26:
Which of the following terms matches closest with
‘Foreclosure’?
(a) Surrender
Value
(b) Nominee
(c) Death Claim
(d) Maturity
Claims
Q.
27:
Find out which of the given statements is
incorrect
(a) An
organisation must have a purpose
(b) An
organisation is identified by its actions
(c) An
organisation is identified by the building it occupies
(d) A organisation
can sue and be sued
Q.
28:
Find out which of the given statements is
incorrect
(a) Accounts
department has to monitor cash flow from subordinate offices
(b) Marketing
department has to monitor business inflow
(c) Marketing
department has to monitor performance of agents
(d) Actuarial
department is responsible for settling death claims
Q.
29:
Which of the following terms is dissimilar to
the other four in the context of insurable interest in life insurance?
(a) Employer
(b) Creditor
(c) Surety
(d) Debtor
Q.
30:
Which of the following terms is dissimilar to
the other four in the context of death claims in life insurance?
(a) Early claims
(b) Non-early
claims
(c) Foreclosure
(d) Claimant’s
statement
Q.
31:
As per structured formula under the Motor
Vehicle Act, victims of fatal injuries are paid compensation on the basis of:
(a) Age and sex
(b) Age and number
of dependents
(c) Income and
size of family
(d) Age and
income
Q.
32:
As per the Insurance Act, every insurer has to
prepare at the end of financial year
(a) Balance Sheet
(b) Profit and
Loss Account
(c) Revenue
Account for each class of Insurance business
(d) All of the
above
Q.
33:
The Third Party Administrator’s role mainly
involves
(a) Canvassing
business for the insurer.
(b) Issuing
documents on behalf of the insurer
(c) Arranging for
reinsurance
(d) Checking
and paying insurance claims
Q.
34:
Time Policies relate to:
(a) Fire insurance
(b) Hull
insurance
(c) Personal
Accident insurance
(d) Workmen’s
Compensation insurance
Q.
35:
Which clause specifies the perils insured in a
scheduled form of policy?
(a) Preamble
Clause
(b) Recital Clause
(c) Operative
Clause
(d) Consideration
Clause
Q.
36:
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
Q.
37:
The minimum paid up capital required for a
General Insurance Company is Rs. ____
(a) 25 crores
(b) 50 crores
(c) 75 crores
(d) 100 crores
Q.
38:
In ‘Hit and Run’ cases, claims are settled from
_______
(a) Solatium
Fund
(b) IRDA’s
contingency Fund
(c) Insuring
Company’s reserves
(d) Motor Third
Party Pool
Q.
39:
Select the expanded form of FPA as used in
insurance
(a) Freight
Payable Assured
(b) Free of
Particular Average
(c) Fire Perils
Added
(d) Fixed
Peripherals Added
Q.
40:
Select the expanded form of ALOP used in
insurance
(a) Advance
Loss of Profits insurance
(b) Agreed Loss of
Profits insurance
(c) Additional
Loss of Profits insurance
(d) Associated
Loss of Profits insurance
Q.
41:
Which of the following terms matches closest
with ‘Professional indemnity cover’?
(a) Hospitals
Nursing homes
(b) Insurance
Companies
(c) Commercial
Banks
(d) Practicing
Surgeons
Q.
42:
Insurance cannot prevent the occurrence of risk
but it provides for the………
(a) losses of
risk
(b) occurrence of
risk
(c) chance of risk
(d) none of these
Q.
43:
The document which embodies the contract in
insurance is called…………
(a) security
(b) policy
(c) certificate
(d) none of these
Q.
44:
……… principle in insurance means maximum truth.
(a) subrogation
(b) causa proxima
(c) insurable
interest
(d) uberrima
fides
Q.
45:
Which of the following terms matches closest
with ‘Composite Policy’?
(a)
Shopkeepers’ insurance
(b) Janatha
Personal Accident insurance
(c) Critical Care
Health insurance
(d) Marine Cargo
insurance
Q.
46:
Members of the Insurance Advisory Committee are
drawn to represent the interests of different groups like:
(a) Surveyors,
agents, advocates
(b) Commerce,
transport,
(c) Consumer fora,
industry, intermediaries,
(d) Research
bodies, organisations engaged in safety and loss prevention
Q.
47:
A Surveyor’s role includes:
(a) Checking the
admissibility of the loss
(b) Quantification
of the loss
(c) Giving
comments on the loss
(d) Reporting
major losses to IRDA
Q.
48:
Which of the following covers is dissimilar to
the other four options?
(a) Loss of
Passport
(b) Loss of
Profits
(c) Loss of
checked in baggage
(d) Delay in
receiving checked in baggage
Q.
49:
Which of the following types of insurances is
dissimilar to the other four options?
(a) Builders’
Risks insurance
(b) Hut insurance
(c) Crop insurance
(d) Livestock
insurance
Q.
50:
Which of the following terms matches closest
with ‘Asbestosis’?
(a) Products
(b) Pension
(c) Rough Weather
(d) Workmen’s
Compensation
Q.
51:
Regarding ‘Exclusions’ find out the incorrect
statement.
(a) Exclusions are
indicated in the policy
(b) Exclusions are
perils or circumstances not covered
(c) Exclusions
limit the coverage under the policy
(d) Exclusions
do not deal with risk coverage
Q.
52:
Which of the following statements is incorrect
in respect of brokers?
(a) Brokers
require undergoing training before being licensed
(b) Brokers are
appointed by insured to take care of their interests
(c) Brokers have
to pass examinations before being licensed
(d) Brokers
should be registered companies or firms
Q.
53:
Which of the following terms is dissimilar to
the other four options?
(a) Jettison
(b) Hit and Run
(c) Sue and Labour
(d) Salvage
Q.
54:
Which of the following terms is dissimilar to
the other four options?
(a)
Post-hospitalisation expenses
(b) Expenses on
treatment of pre-existing diseases
(c)
Reinstatement value
(d) Funeral
expenses
Q.
55:
Principle of utmost good faith is also known as
………..
(a) subrogation
(b) causa proxima
(c) insurable
interest
(d) uberrima
fides
Q.
56:
…………….principle means that the insured is not
entitled to make a profit on his loss.
(a) subrogation
(b) causa proxima
(c) indemnity
(d) uberrima fides
Q.
57:
The purpose of ………. Are to hold the negligent
person responsible for the loss and prevent the insured from collecting twice
for the same loss.
(a) subrogation
(b) causa proxima
(c) indemnity
(d) uberrima fides
Q.
58:
………..principle in insurance mention the cause of
loss must be direct and an insured one in order to claim for compensation.
(a) subrogation
(b) causa proxima
(c) indemnity
(d) uberrima fides
Q.
59:
………… principle in insurance mention the assured
must have insurable interest in the life or property insured
(a) subrogation
(b) causa proxima
(c) indemnity
(d) insurable
interest.
Q.
60:
The first insurance contract was entered into by
European maritime nations in 1347 to accept ……..insurance as a practice.
(a) life
(b) vehicle
(c) marine
(d) fire
Q.
61:
Dr. Nicholas Barbon set up in 1967 the first
fire insurance company known as the ………..
(a) Nicolas
company
(b) fire company
(c) fire insurance
company
(d) fire office
Q.
62:
The oldest life insurance company in existence
today is the society for the equitable assurance of lives and survivorship,
known as ………
(a) Equitable
insurance
(b) Old
equitable
(c) society for
insurance
(d) none of these.
Q.
63:
The ……………discovered by Jakob Bernoulls around
1700 forms the basis of modern insurance.
(a) law of
insurance
(b) law of
large numbers
(c) law of modern
insurance.
(d) none of these
Q.
64:
The Sanskrit term …………..,the name of LIC of
India corporate headquarters, is found in Rig Veda
(a) Yogaraksha
(b) Yogakarma
(c) Yogakshema
(d) all of these.
Q.
65:
The …………..company was the first insurance
company to be set up in India to help the widows of the European community.
(a) Life insurance
corporation of India
(b) Oriental
Life Insurance Company
(c) National
insurance company
(d) Bajaj
insurance
Q.
66:
………..is the first comprehensive legislation
governed both life and non-life branches of insurance was enacted to provide
strict state control over the insurance business in India.
(a) Insurance
Act-1938
(b) Insurance
Act-1939
(c) Insurance
Act-1940
(d) Insurance
Act-1941
Q.
67:
The LIC of India was set up in ……..to take over
245 life companies.
(a)1955
(b)1956
(c)1957
(d)1958
Q.
68:
………….committee suggested the re-opening up of
the insurance sector to private players.
(a) K.N.Malhotra
(b)
R.N.Malhothra
(c) Nrasimham
(d) Goyal
Q.
69:
69.The IRDA was set up in…………..
(a)1999
(b)1991
(c)2000
(d)2001
Q.
70:
The IRDA stands for
(a) Insurance
Regulatory and Development Activity.
(b) Insurance Reconstruction
and Development Activity.
(c) Insurance
Regulatory and Development Authority.
(d) Insurance
Regulatory and Department Activity.
Q.
71:
The insurance industry till august 2000 had only
two nationalised players ,LIC and ….
(a)NI
(b)GIC
(c) IRDA
(d) none of these
Q.
72:
The ………….,has allowed cooperative societies to
carry on insurance business.
(a) Insurance
(amendment) Act, 2000
(b) Insurance
(amendment) Act, 2001
(c) Insurance
(amendment) Act, 2002
(d) Insurance
(amendment) Act, 2003
Q.
73:
The Indian insurance industry is governed by
(a)Insurance
Act-1978
(b)General
Insurance Business (Nationalisation)Act.1972
(c)Life Insurance
Corporation Act,1956
(d)All of these
Q.
74:
……….. was constituted as an autonomous body to
regulate and develop the business of insurance and reinsurance in India
(a) LIC
(b) GIC
(c) IRDA
(d) NBFC
Q.
75:
Objective of IRDA includes
(a) policy holder
protection
(b) healthy growth
of the insurance market
(c) both (a)
and (b)
(d) only (a)
Q.
76:
IAIS stands for……
(a)Internal
Association of Insurance Supervisors
(b)
International Association of Insurance Supervisors
(c) International
Academy of Insurance Supervisors
(d) International
Association of Insurance Surveyors
Q.
77:
To provide the insured a speedy and inexpensive
grievance redressal system ,the Govt. of India promulgated…………
(a)Redressel of
public grievance Rule 1987
(b) Redressel
of public grievance Rule 1988
(c) Redressel of
public grievance Rule 1989
(d) Redressel of
public grievance Rule 1990
Q.
78:
RPG rule 1988 set up an institution for building
the confidence of the policy holders in insurance.
(a) management
(b) ombudsman
(c) council
(d) committee
Q.
79:
An ombudsman is entrusted with………..functions
(a) managing &
concilling
(b)
conciliation and award making
(c) agency and
principal
(d) none of the
above
Q.
80:
The ……….associated with the insurance business
are agents, surveyors, loss assessors, brokers, third party administrators and
banks.
(a) management
(b) organisation
(c)
intermediaries
(d) regulators
Q.
81:
…………..in the insurance are just like the
retailers of any consumer product who help in selling and distributing the
product.
(a) surveyors
(b) loss assessors
(c) agents
(d) banks
Q.
82:
…………are independent professionals appointed by
an insurance company to assess the loss or damage when a claim is notified
under a policy issued by them.
(a) surveyors
(b) loss assessors
(c) agents
(d) both a and
b
Q.
83:
…………are agents but they can sell policies of
several life and non-life insurance companies at a time.
(a) surveyors
(b) loss assessors
(c) brokers
(d) banks
Q.
84:
………….are the middlemen in the healthcare
delivery chain in insurance sector.
(a) surveyors
(b) loss assessors
(c) brokers
(d) TPAs
Q.
85:
……………is insurance companies tying up with banks
to sell insurance products.
(a) franchising
(b) merger
(c)
bancassurance
(d) insuranced
linked banking
Q.
86:
…………..company sent 50,000 direct mailers to
office –goers in Mumbai through their lunch boxes.
(a) Bajaj
insurance
(b) Reliance
insurance
(c) Icici
insurance
(d) Tata insurance
Q.
87:
ICICI prudential Life insurance company sent
50,000 direct mailers to office –goers in Mumbai through their lunch boxes. It
is a
(a) Worksite
marketing
(b) Direct
marketing
(c) retail
marketing
(d) none of these.
Q.
88:
________ is a social device for eliminating or
reducing the loss of society from certain risk.
(a) Premium
(b) Policy
(c) Insurance
(d) Contract
Q.
89:
Insurance provides security against ________
(a) Risk
b) Losses
(c) Both (a)
& (b)
(d) None of them
Q.
90:
The ________ is the party who agrees to
compensate the other person against possible losses.
(a) Insured
(b) Insurer
(c) Assured
(d) None
Q.
91:
The ________ is the party who gets his life or
property insured against risks.
(a) Insured
(b) Insurer
(c) Assurer
(d) None
Q.
92:
The insurer agrees to compensate the insured in
consideration of a sum of money is called
(a) Premium
(b) Policy
(c) Subject matter
(d) None
Q.
93:
The things or property insured is called
________ of the insurance
(a) Subject
matter
(b) Insurable
interest
(c) Policy
(d) None
Q.
94:
A contract of insurance is a ________ agreement.
(a) Contingent
(b) Constant
(c) both (a) and
(b)
(d) None of these
Q.
95:
The Bombay Mutual Assurance Society Ltd. formed
in ________
(a) 1870
(b) 1970
(c) 1960
(d) 1865
Q.
96:
________ was the first Indian Insurance Company
(a) Bombay
Mutual Assurance Society Ltd.
(b) Bombay
Insurance Society Ltd.
(c) Insurance
Regulatory Development Authority
(d) General
Insurance Corporation
Q.
97:
Risk is evaluated on the basis of ________
theory
(a) Variability
(b) Contingency
(c) Probability
(d) All
Q.
98:
From the following, which is not a type of risk?
(a) Speculative
risks
(b) Dynamic risks
(c) Fundamental
(d) Quantitative
Q.
99:
Insurable interest means ________ interest
(a) Individual
(b) Social
(c) Monetary
(d) All of these
Q.
100:
Which of the following insurance contract is not
based on the principle of indemnity?
(a) Fire insurance
(b) Marine
insurance
(c) Life
insurance
(d)All
MCQs [SET 2]
(a) The
oldest life insurance company in existence today is the society for the
equitable assurance of lives and survivorship, known as ………
(i) Equitable insurance
(ii) Old equitable
(iii) society for insurance
(iv) none of these.
(b) The
……………discovered by Jakob Bernoulls around 1700 forms the basis of modern
insurance.
(i) law of insurance
(ii) law of large numbers
(iii) law of modern insurance.
(iv) none of these
(c) The
Sanskrit term …………..,the name of LIC of India corporate headquarters, is found
in Rig Veda
(i) Yogaraksha
(ii) Yogakarma
(iii) Yogakshema
(iv) all of these.
(d) The
…………..company was the first insurance company to be set up in India to help the
widows of the European community.
(i) Life insurance corporation of India
(ii) Oriental Life Insurance Company
(iii) National insurance company
(iv) Bajaj insurance
(e) ……..is
the first comprehensive legislation governed both life and non-life branches of
insurance was enacted to provide strict state control over the insurance
business in India
(i) Insurance Act-1938
(ii) Insurance Act-1939
(iii) Insurance Act-1940
(iv) Insurance Act-1941
(f) The
LIC of India was set up in ……..to take over 245 life companies.
(i)1955
(ii)1956
(iii)1957
(iv)1958
(g) ……….committee
suggested the re-opening up of the insurance sector to private players.
(i) K.N.Malhotra
(ii) R.N.Malhothra
(iii) Nrasimham
(iv) Goyal
(h) The
IRDA was set up in…………..
(i)1999
(ii)1991
(iii)2000
(iv)2001
(i) The
IRDA stands for
(i) Insurance Regulatory and Development Activity.
(ii) Insurance Reconstruction and Development Activity.
(iii) Insurance Regulatory and Development Authority.
(iv) Insurance Regulatory and Department Activity.
(j) The
insurance industry till august 2000 had only two nationalised players ,LIC and ....
(i)NI
(ii)GIC
(iii) IRDA
(iv) none of these
(k) The
………….,has allowed cooperative societies to carry on insurance business.
(i) Insurance (amendment)Act,2000
(ii) Insurance (amendment)Act,2001
(iii) Insurance (amendment)Act,2002
(iv) Insurance (amendment)Act,2003
(l) The
Indian insurance industry is governed by
(i)Insurance Act-1978
(ii)General Insurance Business (Nationalisation)Act.1972
(iii)Life Insurance Corporation Act,1956
(iv) All of these
(m) ……..
was constituted as an autonomous body to regulate and develop the business of
insurance and reinsurance in India
(i) LIC
(ii) GIC
(iii) IRDA
(iv) NBFC
(n) Objective
of IRDA includes
(i) policy holder protection
(ii) healthy growth of the insurance market
(iii) both (i) and (ii)
(iv) None of these
(o) To
provide the insured a speedy and inexpensive grievance redressal system ,the
Govt. of India promulgated…………
(i)Redressal of public grievance Rule 1987
(ii) Redressal of public grievance Rule 1988
(iii) Redressal of
public grievance Rule 1989
(iv) Redressal of public grievance Rule 1990
(p) The
……….associated with the insurance business are agents, surveyors, loss
assessors, brokers, third party administrators and banks.
(i) management
(ii) organisation
(iii) intermediaries
(iv) regulators
(q) ………are
agents but they can sell policies of several life and non-life insurance
companies at a time.
(i) surveyors
(ii) loss assessors
(iii) brokers
(iv) banks
(r) …………is
insurance companies tying up with banks to sell insurance products.
(i) franchising
(ii) merger
(iii) banc assurance
(iv) insurance linked banking
(s) ________
is a social device for eliminating or reducing the loss of society from certain
risk.
(i)Premium
(ii)Policy
(iii)Insurance
(iv)Contract
(t) Insurance
provides security against ________
(i)Risk
(ii)Losses
(iii)Both (i)& (ii)
(iv)None of them
KEY
TO MCQs [SET 2]
Question No.
|
Answer
|
(a)
|
(ii) Old equitable
|
(b)
|
(ii) law of large numbers
|
(c)
|
(iii) Yogakshema
|
(d)
|
(ii) Oriental Life Insurance Company
|
(e)
|
(i) Insurance Act-1938
|
(f)
|
(ii)1956
|
(g)
|
(ii) R. N. Malhothra
|
(h)
|
(iii)2000
|
(i)
|
(iii) Insurance Regulatory and Development Authority.
|
(j)
|
(ii)GIC
|
(k)
|
(iii) Insurance (amendment)Act,2002
|
(l)
|
(iv) All of these
|
(m)
|
(iii) IRDA
|
(n)
|
(iii) both (i) and (ii)
|
(o)
|
(ii) Redressel of public grievance Rule 1988
|
(p)
|
(iii) intermediaries
|
(q)
|
(iii) brokers
|
(r)
|
(iii) banc assurance
|
(s)
|
(iii)Insurance
|
(t)
|
(iii)Both (i)& (ii)
|
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