Full Text Transcript
0;.
~
'-
tN~~ ANCEa:RlSr MANAGDfIN!'
(f.\M) hXAMINATlOH.
2018
Roll No............................... MAY
P~l"Prj..c1p'e. anclPra'Cti~ of rl)~urinee
Total No. of Questions-7] [Total No. of Printed Pages-8
.
.
Time Allowed-3 Hours Maximum Marks-IOO
BMP
Answer all questions.
Marks
1. From the 'answers of the following questions, indicate the one that is accurate or 15
nearIng accuracy.
(i) Which of the following is an outcome of adverse selection?
(a) Fall in premiums and partial collapse of an insurance market.
(b) Escalation ofpremiums and complete fall down ofinsurance market through
the withdrawal of individuals.
. .
(c) Fall in premiums and increased number of insurance purchases.
(d) Escalation of premiums and increased number of insurance purchases.
(ii) Life Insurance is a contract of :
(a) Indemnity
(b) Valued Policy
(c) Subrogation
(d) All of the above.
(iii) The amount of human life value is calculated by properly discounting the
(a) Current earnings of the insured
(b) Saving potential of the insured
(c) Fraction of the income of the insured that is used for the dependents
(d) Social status of the insured.
.:
"
B P.T.D.
'fI,;C.
MP ,1 ., ,,"!
-\-"'~VIi...~!.
l
"'~
lb
;.;ISfj')'1 ~"'!\" t. ..,
r;.1!}tf!t)A~~A'M ,,<~ t ~
i1~1't '.J" HI..i.- I , . f,, ..'
tr"~vAII BMP .',. ;.',1 Marks
fM . ...~
-r""~f-.ab.~>' '
,~"~~~I~l T. 7' ,
(iv). Till when under the whole life insurance policy is the policy coverage
available?
.
(a) Up to a certain age of the policyholder
~
(b) For a tenure of twenty years
(c) Till the death of the insured
(d) Till the retirement of the insured.
(v) provides that the validity of an insurance contract may not be
con.tested after .it has been in effect for a certain period of time.
(a) Grace period provision
(b) Non -forfei ture provision
(c) Reinstatement clause
(d) Incontestable clause
(e) All of the above.
(vi) Selection and classification of risks are the part of in the
Insurance company operations.
(a) Underwriting
(b) Investment management
(c) Claims management
(d) All of the above.
(vii) The acceptance of substandard exposure in return for other more profitable
bu~iness is generally described as
(a) Underwriting audit
(b) Underwritingguide
(c) Policy statement
(d) Accommodation.
4; BMP
"-- ---
( 3 )
BMP Marks
(viii) Policies cover only the outstanding risk amount.
(a) Whole life
.
(b) Endowment
I
(c) Unit linked
(d) Mortgage Redemption Insurance.
(ix) Economic concept of endowment Insurance is basically a combination of
(a) Decreasing term insurance and increasing savings
(b) Increasing term insurance and increasing savings
(c) Decreasing term insurance and decreasing savings
(d) Increasing term insurance and decreasing savings.
(x) Professional indemnity insurance does not cover
. (a) Acts of Commission and Omission
(b) Acts of Negligence
(c) Liability arising out of failure of doctors' treatment
(d) Criminal act.
(xi) What is the exemption under the condition of automatic renewal available to
the insured?
(a) The insured need not have to pay the premium
(b) 'The insured need not have to put his consent again.
(c) The insured need not have to undergo any medical test
(d) The insured need not have to pay any extra premium for the higher
attained age.
BMP P.T. O.
4, '-
J
(4 ) }
BMP Marks
(xii). Which of the following statement(s) is/are true regarding the amount of annuity
instalment payable by the insurer?
(a) It is not related to the entry age of the insured
-
..
(b) It increases with the entry age of the insured
(c) It decreases with the entry age qf the insured
(d) It cannot be predicted so easily.
(xiii) Investment outflows generally result due to
(a) initial investments
(b) trading losses
(c) transaction costs
(d) All the above.
(xiv) The regulations restricting the investment quantum of an insurer in a particular
company/group/industry is expressed in
(a) Solvency norms
(b) Exposure/prudential norms
(c) Liquidation norms
(d) Capital norms.
(xv) Collateral assignment implies
(a) Temporary/conditional transfer
(b) Absolute transfer
(c) Transfer of only obligations
(d) Transfer of all rights.
BMP
J
...-
( 5 )
BMP Marks
15
2. Fill up the blanks:
(i) makes the proposal in an insurance contract.
4
(ii) risks may have happy or favourable outcomes in addition to
loss or break even situations.
(iii) means the insured is restored to his or her approximate
financial position prior to the occurrence of the loss.
(iv) In the discussion about cost of doing insurance business, ............................
is refe:r:red to as ~he amount needed to pay all expenses, including
commissions, general administrative expenses and an allowance for
contingencies and profit.
(v) A representation need only be substantially correct while a,...........................
must strictly and literally be complied with.
(vi) Except the proponent and his own life, as well as husband and wife, no other
emotional relationship leads to any............................
(vii) Substitution of the insurer in place of the insured for the purpose of
claiming indemnity from a third person for a loss covered by insurance is
called as ............................
(viii) A contract of means the insured must accept the entire
contract, with all its terms and conditions which are fixed by the Insurer.
(ix) Excluded perils, excluded losses and excluded form three
"""""""""""".""
types of exclusions in insurance contracts.
(x) When a reinsurance company shares its loss exposures with other reinsurer(s),
it is referred to as ............................
(xi) Direct losses, indirect losses and losses are three categories
of losses that arise due to natural disasters.
(xii) The basic objective of is to develop a rate structure that
"""",""""""""""
will enable the insurer to c9mpete effectively for business while earning
a reasonable profit.
BMP
P.T.O.
~,
0:;
(6 )
.t
BMP Marks
(xiii) During determination of cumulative bonus in a health insurance cover, the
sum insured under the policy shall be progressively increased by............................
percent in respect of each claim free year of insurance, subject to a maximum
accumulation of ten. claim free years of insurance.
.
..
(xiv) Liability insurance is also known as Insurance.
(xv) Insurance company's assets are classified according to the nature of the
for which the assets are held and invested.
3. Select True or False from the following: 10
(i) An individual's indifference to the risk because of the existence of insurance
cover constitutes morale hazard. (T/F)
(ii) Transfer of property in a life insurance policy cannot be done simply by an
endorsement on the back of the policy document. (T/F)
(iii) One can buy a life insurance policy for any unlimited amount at any point of
time. (T/F)
(iv) Mr. James has taken life insurance policy in 2005 and is regularly paying
premiums, in 2010 he has committed suicide. Sum assured is payable to the
nominees in this case. (T/F)
(v) Loss prevention measures are intended to lower frequency of losses. (T/F)
(vi) Liability insurance policies are generally expressed as providing indemnity
against liability in law. (T/F)
(vii) Subject-matter of contract of insurance is the physical object or property of
the assured. (T/F)
.
(viii) Traditional term premiums are based on aggregate mortality experience.
. (T/F)
Ox) Investment management is a process involving asset liability management,
integration of investment management and product design management.
(T/F)
(x) One of the functions of Ombudsmen is to settle disputes between insurers and
intermediaries or insurance intermediaries. (T/F)
BMP
.--
~
"
( 7 )
BMP Marks
5
4. (i) Discuss the Pricing objectives in life and health insurance.
, "
5
(ii) Briefly discuss about Settlement options in Life insurance.
~
5. (i) Define Fidelity Guarantee Insurance. Briefly discuss about any two policies 4
available under it.
6
(ii) Define Maritime Perils and discuss about Insured perils or Uninsured perils
in detail.
Case Studies (Questions 6 & 7)
20
6. Dr. Das Biswas of 45 years age is practising as a physician, he had worked
earlier with various hospitals for the last twenty odd years. Since past four
years he is on his own and runs a clinic almost round the clock. He maintains
his health and fitness very well and wants to practice till his last day.
Dr. Biswas was quite successful as a self employed person as he is malfing out
not -less than Rupees two lakhs per month, in that rural area. He has under
him three nurses, two compounders and two substaff, who were drawing salaries
in the range of Rs. 6,000 to Rs. 18,000 per month. One Mr. Pranav, an in,surance
agent, has approached Dr. Biswas and tried to impress upon the importance
of insurance to everyone over there. Subsequently, Mr. Pranav had the following
information from the interaction with members in the clinic.
.
Dr. Biswas says that he himself is a doctor and maintains very good
health, hence there is no need for insurance, as long as he, is alive.
.
Even though Dr. Biswas was confident about his incom~/savings when he
is alive', however, he was slightly skeptical about the fu:ture of his family
after his demise.
.
Employees with relatively higher salary are keen to take insurance which
offers flexibility in premium payments, sought to explore the opportunities
in the stock market, simultaneously having insurance protection.
BMP P.T.O.
",
VI
( 8 )
BMP Marks
.
Employees in lesser salary range, shown keen interest in providing financial
security to their respective families in their absence, however said that
they cannot afford a bigger 'premium.
Questions:
..
(a) Suggest suitable insurance products to the prospective customers in "the
above case.
(b) Discuss the unique characteristics of these products.
7. Hyderabad Air Show turns tragic: 20
"In March, 2010, an Air show was undertaken at Begumpet in Hyderabad
which turned out to be very tragic for some people. Two pilots of naval aircraft
and a civilian were killed after an aircraft crashed on a nearby residential
building. Seven others were also injured. in the mishap."
Questions:
~a) What are the risks involved in the above event?
(b) Identify and discuss, how such risks can be managed by insurance and.
who should be' taking insurance.
BMP