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Basic Insurance Concepts & Principles (Fourth Edition - 2013) Mock Paper

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Basic Insurance Concepts & Principles (Fourth Edition - 2013) from SCI website

Questão 1 de 40

1

________ are set up primarily to insure the risks of their parent and related companies.

Selecione uma das seguintes:

  • Reinsurers

  • Direct insurers

  • Captive insurers

  • Composite insurers

Explicação

Questão 2 de 40

1

Insurers are using alternative distribution channels to market their insurance products. Which one of the following is NOT an alternative distribution channel?

Selecione uma das seguintes:

  • Post offices

  • The Internet

  • Credit card providers

  • Marketing staff of the insurer.

Explicação

Questão 3 de 40

1

A vehicle collision that causes a driver to suffer personal injury and physical damage to his vehicle is an example of a:

Selecione uma das seguintes:

  • pure risk

  • speculative risk

  • non-financial risk

  • fundamental risk

Explicação

Questão 4 de 40

1

________ is NOT a speculative risk.

Selecione uma das seguintes:

  • Running in a marathon

  • Betting on a horse race

  • Venturing into a food business

  • Investing in stocks and securities

Explicação

Questão 5 de 40

1

________ are uninsurable.

Selecione uma das seguintes:

  • Pure risks

  • Financial risks

  • Particular risks

  • Speculative risks

Explicação

Questão 6 de 40

1

The potential loss of an insurable risk must be:

Selecione uma das seguintes:

  • caused intentionally

  • indefinite in terms of time and amount

  • large enough to create a financial burden for the insured

  • certain to happen to a large number of insureds at the same time

Explicação

Questão 7 de 40

1

The lightning that caused the factory owned by Adrian to be burnt down is referred to as the:

Selecione uma das seguintes:

  • peril

  • hazard

  • damage

  • non-financial risk

Explicação

Questão 8 de 40

1

Betsy has a fear of drowning, so she chooses not to swim. This is an example of risk:

Selecione uma das seguintes:

  • transfer

  • control

  • phobia

  • avoidance

Explicação

Questão 9 de 40

1

Strict enforcement of safety rules in construction sites is an example of loss:

Selecione uma das seguintes:

  • transfer

  • reduction

  • avoidance

  • prevention

Explicação

Questão 10 de 40

1

As specified in Session 57(1)(b) of the Insurance Act (Cap. 142), insurable interest is NOT present when the:

Selecione uma das seguintes:

  • husband purchases insurance on the life of his wife

  • creditor purchases insurance on the life of his debtor

  • grandmother purchases insurance on the life of her grandson

  • father purchases insurance on the life of his son below 18 years old

Explicação

Questão 11 de 40

1

Which one of the following insurance policies does NOT require proof of insurable interest in the event of a claim?

Selecione uma das seguintes:

  • Life Insurance policy

  • Marine Insurance policy

  • Liability Insurance policy

  • Property Insurance policy

Explicação

Questão 12 de 40

1

Under the doctrine of utmost good faith, the parties to an insurance contract have the duty to disclose all:

Selecione uma das seguintes:

  • commonly known facts

  • facts only when asked for

  • material facts relating to the risk being proposed

  • material assumptions relating to the loss reduction

Explicação

Questão 13 de 40

1

In his proposal form for Fire Insurance, Donald states that his warehouse is installed with fire extinguishers when it is not. This is an example of ________ misrepresentation.

Selecione uma das seguintes:

  • innocent

  • negligent

  • fraudulent

  • speculative

Explicação

Questão 14 de 40

1

Under the principle of indemnity, there are a number of methods by which an insurer can provide the necessary indemnity to the insured in the event of a loss. Which one of the following is NOT a method of providing indemnity?

Selecione uma das seguintes:

  • Replacement

  • Cash payment

  • Reinstatement

  • Policy renewal discount

Explicação

Questão 15 de 40

1

The principle of indemnity applies to ________ Insurance policies.

Selecione uma das seguintes:

  • Life

  • Pecuniary

  • Critical Illness

  • Personal Accident

Explicação

Questão 16 de 40

1

Max Hardware Storage, a warehouse, caught fire recently. Its owner claimed a loss of S$80,000 (hardware stock) against its Fire Insurance policy that included an Average Clause. The loss adjuster appointed by the insurer was satisfied that the quantum of loss claimed was correct. However, the lost adjuster was of the opinion that there was at least S$160,000 in stock, but only S$120,000 was insured. As such, on application of average, the insurer's liability for loss under the policy amounts to

Selecione uma das seguintes:

  • S$30,000

  • S$60,000

  • S$90,000

  • S$120,000

Explicação

Questão 17 de 40

1

An explosion at his neighbour's factory caused a fire which spread to Calvin's factory and caused extensive damage. The insurer having paid the claim to Calvin under his Fire Insurance policy assumes his rights to recover the loss from his neighbour, who was responsible for the fire. This legal doctrine is known as:

Selecione uma das seguintes:

  • excess

  • average

  • indemnity

  • subrogation

Explicação

Questão 18 de 40

1

The principle of contribution arises when there is a loss that involves two or more insurance policies covering:

Selecione uma das seguintes:

  • different perils

  • the common interests

  • different subject matters

  • the same amount of sum insured

Explicação

Questão 19 de 40

1

Which one of the following statements about a general insurance agent is NOT correct?

Selecione uma das seguintes:

  • He procures new business for the insurer.

  • He services his existing business for the insurer.

  • He is also the principal party in an agency agreement.

  • He is essentially an intermediary acting for the insurer.

Explicação

Questão 20 de 40

1

________ authority is the power that is granted to an agent by the principal in specific terms in the agency agreement.

Selecione uma das seguintes:

  • Usual

  • Actual

  • Implied

  • Apparent

Explicação

Questão 21 de 40

1

The situation where the principal accepts its agent's actions that are made outside the scope of the agency agreement is known as:

Selecione uma das seguintes:

  • estoppel

  • ratification

  • reinstatement

  • ostensible authority

Explicação

Questão 22 de 40

1

Which of the following statements relating to the Law of Contract is CORRECT?

Selecione uma das seguintes:

  • Undischarged bankrupts have the legal right to enter into contracts.

  • Mutual agreement of a contract can be evidenced by the making of an offer either orally or in writing.

  • A contract is enforceable by law without a consideration being passed from the promisee to the promisor.

  • All of the others.

Explicação

Questão 23 de 40

1

Which one of the following insurance policies is an example of a "master contract" that is effected by a company to offer optional employee benefits?

Selecione uma das seguintes:

  • Marine Hull

  • Building and Contents

  • Group Personal Accident

  • Directors' and Officers' Liability

Explicação

Questão 24 de 40

1

Which one of the following documents does NOT form part of an insurance contract?

Selecione uma das seguintes:

  • Declaration

  • Cover Note

  • Claim Form

  • Certificate of Insurance

Explicação

Questão 25 de 40

1

In the proposal form for Fire Insurance, the information that has a material bearing on the potential hazards of the risk is the:

Selecione uma das seguintes:

  • insured's address

  • period of insurance cover

  • insurer's warning statement

  • insured's means of identification

Explicação

Questão 26 de 40

1

Which one of the following statements BEST describes a cover note?

Selecione uma das seguintes:

  • It can be used as a renewal notice.

  • It replaces the lost policy document.

  • It has the same legal status as the actual policy.

  • It forms the basis of risk assessment by the insurer.

Explicação

Questão 27 de 40

1

A Certificate of Insurance is typically NOT required for ________ Insurance.

Selecione uma das seguintes:

  • Liability

  • Marine Cargo

  • Private Motor Car

  • Commercial Vehicle

Explicação

Questão 28 de 40

1

An implied condition is one that must be complied with, but does not appear in the policy document. Which one of the following is an example of an implied condition?

Selecione uma das seguintes:

  • Warranties

  • Subrogation of rights

  • Notification of claims

  • Existence of subject matter

Explicação

Questão 29 de 40

1

Which one of the following question is NOT usually included in a check list used to perform a preliminary validation of a Property Insurance claim by an insurance company?

Selecione uma das seguintes:

  • Is the claimant entitled to the payment?

  • Is the property covered under the policy?

  • Did the loss occur in a place covered by the policy?

  • Is the loss the indirect result of a hazard covered under the policy?

Explicação

Questão 30 de 40

1

In the event of a loss or damage, the onus of proving that the loss has occurred rests solely with the:

Selecione uma das seguintes:

  • agent

  • insured

  • lawyers

  • reinsurer

Explicação

Questão 31 de 40

1

A "Sue and Labour" clause enables the insured to recover expenses incurred in averting or minimising a loss under a policy. This clause is commonly found in a/an ________ Insurance policy.

Selecione uma das seguintes:

  • Marine Cargo

  • Product Liability

  • Commercial Vehicle

  • Errors and Omissions

Explicação

Questão 32 de 40

1

________ are independent intermediaries who can help policyholders to ensure that the eventual claim settlement recommended to the insurers is fair to both parties within the terms of the policy.

Selecione uma das seguintes:

  • Enginners

  • Risk surveyors

  • Loss adjusters

  • Forensic scientists

Explicação

Questão 33 de 40

1

In Singapore, Section 24A of the Limitation Act (Cap. 163) provides for legal actions pertaining to damages for negligence, nuisance or breach of duty in respect of personal injuries to commence before the expiration of a certain limitation period from the date on which the course of action accrued. The limitation period in Singapore is ________ years.

Selecione uma das seguintes:

  • one

  • three

  • six

  • nine

Explicação

Questão 34 de 40

1

The common method of settlement of the loss of a jewellery under a Theft Insurance policy is by:

Selecione uma das seguintes:

  • repair

  • avoidance

  • replacement

  • reinstatement

Explicação

Questão 35 de 40

1

________ is a risk transfer mechanism whereby the reinsurer transfers part of a risk to another reinsurer.

Selecione uma das seguintes:

  • Insurance

  • Contribution

  • Retrocession

  • Co-insurance

Explicação

Questão 36 de 40

1

Which one of the following regarding treaty reinsurance is FALSE?

Selecione uma das seguintes:

  • It may be placed on a proportional basis.

  • The reinsurers are obliged to accept all risks ceded.

  • Surplus Reinsurance is one example of treaty reinsurance.

  • It is more costly to administer as compared to facultative reinsurance.

Explicação

Questão 37 de 40

1

A contract of reinsurance is strictly between the ________ and the reinsurer.

Selecione uma das seguintes:

  • direct insurer

  • original insured

  • insurance agent

  • reinsurance broker

Explicação

Questão 38 de 40

1

After retaining S$3,000,000 on a risk with an original sum insured of S$5,000,000, Gold Insurer reinsured the balance with Silver Reinsurer on a Proportional Facultative Reinsurance basis.
If there is a loss of S$2,000,000 on the risk, Silver Reinsurer will be liable to pay its share of loss amounting to:

Selecione uma das seguintes:

  • S$200,000

  • S$400,000

  • S$600,000

  • S$800,000

Explicação

Questão 39 de 40

1

The Monetary Authority of Singapore (MAS) Guideline No: FSG-G01 sets out fit and proper criteria applicable to all relevant persons in relation to the carrying out of any activity regulated by MAS. Examples of relevant persons are:

Selecione uma das seguintes:

  • director of a registered insurer

  • broking staff of a registered insurance broker

  • substantial shareholder of a registered insurer

  • all of the others

Explicação

Questão 40 de 40

1

Which of the following statements relating to the Singapore General Insurance Code of Practice ("The Code") is FALSE?

Selecione uma das seguintes:

  • The objective of the Code is to ensure that the general insurance customer is treated fairly.

  • The Code covers how an insurance agent should maintain confidentiality of information relating to any of his customers.

  • The Code covers all types of general insurance products (including commercial lines) which are sold to corporate clients.

  • All of the others.

Explicação