Correct : B. Life Insurance Corporation of India (LIC)
2. The term risk may be defined as:
Correct : C. Both a and b
3. Risk of premature death is a
Correct : B. Personal risk
4. Insurance is a risk management technique involving:
Correct : D. Risk transfer
5. Organisations are mainly concerned with managing
Correct : A. Pure risks
6. The first step in risk management process is
Correct : D. Risk evaluation
7. Main emphasis of risk management is on ___________.
Correct : B. Reduction of cost of handling risk
8. Cost of loss control is
Correct : A. cost of reducing frequency and severity of loss
9. Following are the risk management methods:
Correct : D. All of the above
10. Which of the following types of risks best meets the requirements for being insurable by
private insurers?
Correct : B. Property risks
11. All of the following are financial risks which may be faced by business organizations EXCEPT
Correct : C. Product liability risk.
12. Risk management follows a systematic process which involves……….steps.
Correct : D. Five
13. Risk management information system is not useful in one of the following
Correct : B. Hedging
14. Event of high frequency and low severity fall in the self-retention category
Correct : A. True
15. When as event is stated to be possible, it has a probability between
Correct : A. Zero and one
16. If the most impossible event is assigned a value of zero, then most inevitable event is assigned a value
Correct : D. Between 10 to 100
17. Which of the statement are true? A. Risk retention and risk transfer are some of the techniques to manage risks. B. Implementation is one of the steps in risk management
Correct : C. Both the statements
18. Which of the statements are true? A. Loss prevention and loss reduction mean different things. B. Risk maybe transferred by contract.
Correct : B. Statement B.
19. Which of the statements is correct? A. The simplest way to deal with a risk is to avoid it. B. This technique is always possible and practical.
Correct : D. Neither of the statements
20. Which of the statements is correct?
A. One of the methods of risk retention is by way of voluntary excess or deductible available under the policy.
B. Another method of retention of risk is to absorb small losses as normal operating expenses of business.
Correct : C. Both the statements
21. When should a risk be avoided?
Correct : B. When the risk event is unacceptable -- generally one with a very high probability of Occurrence and high impact
22. Risk management can be defined as the art and science of _________ risk factors throughout the life cycle of a project.
Correct : A. Researching, reviewing, and acting on
23. When a firm buys insurance to cover losses caused by riots, the firm is
Correct : A. Transferring risk.
24. Suppose a project has many hazards that could easily injure one or more persons and there is no method of avoiding the potential for damages. The project manager should consider __________ as a means of deflecting the risk.
Correct : B. Buying insurance for personal bodily injury
25. The cause of loss or a contigency that may cause a loss is known as--------------
Correct : D. Uncertainty
26. Which of the following is the similarity between insurance and gambling:
Correct : A. The amount of loss to be paid is known before hand.
27. The business of insurance is related to protection of:
Correct : D. economic value of assets
28. The concept of insurance is
Correct : A. to share losses by many
29. Insurance covers the risk of the most certain event -
Correct : B. protection of the childhood
30. Insurance cover
Correct : C. reduces the impact of loss
31. The company doing insurance business is called:
Correct : D. an insurance company
32. All of the following are disadvantages of using insurance EXCEPT
Correct : C. It results in considerable fluctuations in earnings after a loss occurs.
33. All of the following can be classified as casualty insurance EXCEPT
Correct : A. Marine insurance.
34. Insurance eliminates or decreases the uncertainty associated with occurrence of an event
Correct : C. Partially correct C.
35. The insurance plays a role in the economic development of the country in following ways:
Correct : D. All of the above
36. Insurance brokers are governed by
Correct : C. IRDA Act. 1999
37. A reinsurance of insurance refers to ________.
Correct : C. retrocession.
38. IRDA Act. 1999 defines insurance intermediary as one including also
Correct : A. Insurance broker
39. Insurance reduces the extent of financial loss connected with uncertain events
Correct : C. To the extent of insurance cover
40. The business of insurance is related to protection of
Correct : D. Economic value of assets
41. Which of the following is the similarity between insurance and gambling?
Correct : A. The amount of loss to be paid is known beforehand
42. What is underwriting in Insurance ?
Correct : C. Process by which insurers select the risks to insure and decide how much in premiums to charge for
43. Insurance Sector in India is regulated by IRDA. What is full name of IRDA?
Correct : D. Insurance Regulatory and Development Authority
44. When was IRDA Act passed?
Correct : A. 1972
45. Which of the following is the main objective of IRDA:
Correct : A. To take care of the policy holder interest
46. The general insurance business in India was nationalized in the year.
Correct : D. 1972
47. The main role of an underwriter in a non-life insurance company is normally to
Correct : A. assess the acceptability of particular risks
48. Akshat is a relatively cautious person. In insurance terms, this will normally increase the
likelihood that he will
Correct : C. require insurance cover.
49. Which of the statements is correct? A. Insurance is a transfer of risk mechanism. B. Insurance gives physical protection to assets.
Correct : A. Statement A.
50. Transfer of rights and remedies of the insured to the insurer after indemnity has been
effected is called __________.
Correct : B. Subrogation
51. Which one of the following comes under miscellaneous insurance?
Correct : B. Motor Insurance
52. __________ policy matures on the assured death or on his attainment of a particular age
whichever occurs earlier.
Correct : A. Endowment.
53. On the death of the bread-earner, two losses occur in the family-one is loss of human life and the other
Correct : A. Earning power of family
54. The principle of indemnity is applicable to _______ only.
Correct : D. Property insurance
55. Insurance is based on the principle of _______.
Correct : A. co-operation.
56. ______ are those terms, which are written on the policy.
Correct : A. Express Warranties
57. Which of the following statements is true: Under a fire policy
Correct : A. Insurance is a transfer of risk mechanism.
58. Which of the following statements is correct?
Correct : C. Statement A
59. Which of the following types of loss exposures are best met by the use of avoidance?
Correct : D. high-frequency, high-severity
60. Consideration on the part of the life insured in respect of a life insurance contract is
Correct : B. The insured’s promise to pay the premium under the policy.
61. The policy holder’s duty to disclose material fact lies at the time of
Correct : D. All of the above
62. Which of the following is an evidence of insurance contract?
Correct : A. Policy of insurance
63. Which of the following statements is correct?
Correct : C. Both the statements are correct.
64. The principle of utmost good faith does not apply to :
Correct : D. All the three kinds of facts mentioned above.
65. Which of the statement is correct? A. Existence of the subject-matter is an express condition. B. There are no implied conditions in insurance contracts
Correct : C. Neither is correct
66. The clause which sets out the essence of the contract is
Correct : D. Operative Clause
67. Endorsement can be used in a policy giving effect to
Correct : D. All of the above
68. Policy stamp needs to be affixed on the
Correct : C. Policy
69. Cover note can be issued by
Correct : D. All of the above, depending on company guidelines
70. What is the minimum age for a person to effect a contract of insurance?
Correct : B. 18 years
71. Insurable Interest is defined by:
Correct : D. Not defined in any written law
72. Which of the following is true? A. Policy form is a legal document. B. The warranties inserted in a policy safeguard the interest of the insured.
Correct : B. B is True
73. In case of life insurance, insurable insurance should not exist?
Correct : A. At the inception of the policy.
74. Notification of Alterations in Risk is a condition
Correct : A. Precedent to liability
75. A person’s insurable interest in his own life is:
Correct : A. Unlimited
76. Occupation is important for risk classification because of:
Correct : D. both b and c
77. A complete proposal form contains the information about
Correct : B. Physical hazard
78. Valuation in life insurance means
Correct : D. The process by which the value of all the existing policies is ascertained in a life insurance company.
79. Endorsement can be used in a policy giving effect to
Correct : D. All of the above
80. Fire Insurance is based on the principle of ?
Correct : C. Indemnity
81. Which is the consequential loss in the fire insurance?
Correct : A. loss of profit on account of fire
82. Fire insurance is a personal contract because
Correct : C. the contract does not insure the safety of the property but only the insured from pecuniary loss due to fire
83. Which of the statements is correct? Under a fire policy A. Insurance is a transfer of risk mechanism. B. Insurance gives physical protection to assets.
Correct : B. Statement B. is correct
84. Which of the following is an accidental loss by fire?
Correct : B. loss on account of delay
85. The major law governing marine insurance in India is
Correct : C. IRDA Act, 1999
86. Can a marine policy be assigned?
Correct : C. cannot be assigned
87. Constructive total loss in marine insurance means
Correct : A. same as total loss
88. Group insurance is ideally suited for covering
Correct : D. Both B. and C.
89. Unemployment insurance is a component of
Correct : B. Social Security Act
90. Which is the right time for taking life insurance?
Correct : D. All the three ‘times’ are right
91. Which type of insurance protects the policyholder against loss or damage to a ship or its cargo on the high seas?
Correct : D. Mariney
92. Which of the following is not covered under General Insurance?
Correct : C. Life insurance
93. Which principle suggests that insured should try to minimize the loss of his property even if it is insured?
Correct : B. Principle of Mitigation
94. Group insurance is ideally suited for covering
Correct : B. Weaker sections of the society
95. Fire insurance can be taken in respect of __________
Correct : C. both movable and immovable properties
96. All of the following can be classified as casualty insurance Except____________.
Correct : A. marine insurance.
97. ________ is a social device for eliminating or reducing the loss of society from certain risk.
Correct : C. Insurance
98. Insurance provides security against ________
Correct : C. Both (a) & (b)
99. The ________ is the party who agrees to compensate the other person against possible losses.
Correct : B. Insurer
100. The ________ is the party who gets his life or property
insured against risks.