Application of General Insurance

Assignment A

1. Discuss Principle of Insurable Interest.

    
2. Definition of Accident.

3. What is Material Fact?

Assignment B

Case Detail:

Radhey Shyam insured his car for IDV of Rs. 4 Lac under Motor Package Policy. His car got damaged in an accident.  Surveyor assessed following expenses in getting his car repaired before depreciation:

1. Tyre Replacement - Rs.2000/-
2. Door Replacement - Rs.6000/-
3. Wind Screen Glass - Rs.1500/-
4. Head Lights ( Both) Plastic Made) - Rs.2000/-
5. Bumper Replacement ( Fibre Make) - Rs.2200/-
6. Painting Charges - Rs.1200/-
7. Bonnet Replacement - Rs.4500/-
8. Towing Charges - Rs.500/-
9. Labour Charges Rs. 3000/-

Depreciation Rate on Metal Parts    - 15%
Excess Clause       - Rs. 500

You are required to specify the amount admissible after depreciation in respect of following items:

1.    For Tyre replacement    :          Rs.................. 

2.    For Bonnet Replacement    :          Rs.................. 

3.    For replacement of Windscreen Glass    :          Rs..................

Assignment C

Question No.  1    Marks - 10
‘Moral Hazard’ refers to    
 
Options    
 Conduct of the surveyor    
 Physical features of the property    
 Conduct of the insurer    
 Conduct of the insured

Question No.  2    Marks - 10
Subject matter of Insurance is    
 
Options    
 Property which may suffer damage    
 Consequences of occurrence of an event    
 An event which may cause damage to property    
 Circumstances which aggravate the event

Question No.  3    Marks - 10
Presently In India, Non-Life Insurance Premium is substantially    
 
Options    
 Non-tariff    
 Regulated by GIC    
 Under market agreement    
 Tariff

Question No.  4    Marks - 10
Insurance Underwriter is a person who    
 
Options    
 Purchases insurance products    
 Sells the insurance products    
 Decides whether to accept the insurance proposal or not    
 Inspects the risks before acceptance of proposal

Question No.  5    Marks - 10
Insurable interest may exist in Fire Policy    
 
Options    
 Throughout currency of the policy    
 Only at the beginning    
 Both at the beginning and at the time of loss    
 Only at the time of loss

Question No.  6    Marks - 10
Insurance Agent’ represents    
 
Options    
 GIC    
 Insured’s    
 Insurers    
 Insurance broker

Question No.  7    Marks - 10
Disadvantage of Self Insurance Is    
 
Options    
 Capital is held up    
 The basic insurance law of large number if not adopted    
 In catastrophic events financial condition of insured will be jeopardized    
 All of above

Question No.  8    Marks - 10
Insurance Covers    
 
Options    
 Business risks    
 Pure risks    
 Gambling risks    
 Speculative risks

Question No.  9    Marks - 10
Risk from Insurer’s point of view is    
 
Options    
 Circumstances which aggravate the event    
 Consequences of occurrence of an event    
 An event which may cause damage to property    
 Property which may suffer damage

Question No.  10    Marks - 10
Principle of utmost good faith means    
 
Options    
 Buyer should be careful    
 Proposer cannot mislead the insurer    
 Both proposer and insurer must disclose the material facts    
 Seller cannot mislead the buyer

Question No.  11    Marks - 10
Self Insurance is advantageous because    
 
Options    
 Interest on the investment of funds belongs to the insured    
 No disputes will arise with insurers over claims    
 There is a direct incentive to control and minimise the risk    
 All of the above

Question No.  12    Marks - 10
Risk Manager is a person who    
 
Options    
 Inspects risks proposed for insurance    
 Looks after insurers underwriting department    
 Looks after the risk profile of an entrepreneur    
 Takes risks in business

Question No.  13    Marks - 10
Bancassurance Means    
 
Options    
 Bank account opened by an insurance company    
 Banks selling insurance on behalf of their clients    
 Banks purchasing insurance cover for their property    
 Banks selling insurance products on behalf of insurers

Question No.  14    Marks - 10
‘Re-Insurance’ means    
 
Options    
 Taking two insurance policies on one’s life    
 Taking two insurance policies on one  property    
 Insurance of insured business    
 Taking more than one insurance policy on two or more properties

Question No.  15    Marks - 10
Insurable Interest must exist in Marine insurance policy    
 
Options    
 Not necessary to exist at any time    
 At the time of the loss    
 At the inception of the policy.    
 Both at the time of inception of the policy and at the time of loss

Question No.  16    Marks - 10
‘Risk Transfer’ means    
 
Options    
 Transfer of insurance policy from original insured to new insured    
 Purchasing insurance cover for premises    
 Shifting of location of premises    
 Transfer of ownership of premises

Question No.  17    Marks - 10
Non-Disclosure of material facts by the insured may render the insurance contract    
 
Options    
 Void    
 Voidable    
 Void-Ab-Initio    
 Valid

Question No.  18    Marks - 10
Principle of Indemnity is strictly applicable in    
 
Options    
 Fire insurance    
 Personal accident insurance    
 Valued policy    
 Life insurance

Question No.  19    Marks - 10
Insurable interest may arise in the property when a person    
 
Options    
 Finances the property    
 Becomes owner of the property    
 Becomes lessee of the property    
 All of the above

Question No.  20    Marks - 10
‘Insurance Broker’ represents    
 
Options    
 LIC    
 Insured’s    
 Insurers    
 IRDA

Question No.  21    Marks - 10
Insurance    
 
Options    
 Protects the assets    
 Reduces possibilities of loss    
 Prevents the loss    
 Pays when there is loss of assets

Question No.  22    Marks - 10
Principle of subrogation means    
 
Options    
 Transfer of insured’s rights to insurer    
 Transfer of insurer’s rights to insured    
 Transfer of one insurer’s rights to another insurer    
 Transfer of one insured’s rights to another insured

Question No.  23    Marks - 10
Principle of contribution is applicable where there    
 
Options    
 Exists one insurance policy on one subject matter    
 Exist two or more policies on one subject matter    
 Exists one insurance policy on more than one subject matter    
 Exist two or more insurance policies on more than one subject matter

Question No.  24    Marks - 10
Proposal Form Is filled and signed by    
 
Options    
 Insurer    
 Insurance Agent    
 Insured    
 Insurance Surveyor

Question No.  25    Marks - 10
Insurers may assume risks    
 
Options    
 Only on receipt of premium in advance    
 By providing credit facility    
 Without receipt of premium    
 On personal surety

Question No.  26    Marks - 10
Insurance Survey Report findings are taken as    
 
Options    
 Mandatory    
 Indicative    
 Recommendatory    
 Of No Importance

Question No.  27    Marks - 10
Co-Insurance means    
 
Options    
 Husband and wife life cover jointly    
 Insurance of one property by two or more insurers under one policy    
 Insurance of more than one property under two policies    
 Insurance of more than one property under one policy

Question No.  28    Marks - 10
Insurance contracts are subject to the principle of    
 
Options    
 Utmost good faith    
 Insurable interest    
 Indemnity    
 All of the above

Question No.  29    Marks - 10
‘Bad Risk’ from Insurer’s point of view is    
 
Options    
 Less hazardous    
 Moderately hazardous    
 Highly hazardous    
 None of the above

Question No.  30    Marks - 10
‘Franchise’ Clause Refers that    
 
Options    
 Full amount of assessed loss will be borne by the insurer    
 Full amount of assessed loss will be borne by the insurer if it exceeds a specified amount    
 Specified amount of the loss shall be borne by the insured    
 No amount of loss shall be borne by the insured

Question No.  31    Marks - 10
 Personal Accident Insurance falls under    
 
Options    
 Life insurance    
 Self insurance    
 Mediclaim insurance    
 Misc insurance

Question No.  32    Marks - 10
 In Motor Own Damage Accident Claim on metal  parts, the depreciation is deducted @    
 
Options    
 As per the age of the vehicle    
 0.5    
 0.25    
 0.3

Question No.  33    Marks - 10
 The subject matter of ‘Standard Fire And Special Perils Policy Is    
 
Options    
 Human beings    
 Cattles    
 Liability    
 Property

Question No.  34    Marks - 10
 In India, Insurance business is conducted by    
 
Options    
 Private sector units only    
 Both public and private sector units    
 IRDA    
 Public sector units only

Question No.  35    Marks - 10
“Excess” Clause is inserted in insurance contract to avoid    
 
Options    
 High value claims    
 Trivial claims    
 Fraud claims    
 Frequent claims

Question No.  36    Marks - 10
Motor Insurance claims are paid    
 
Options    
 Before loss is  occurred    
 After surveying the loss    
 Without surveying the loss    
 None of the above

Question No.  37    Marks - 10
‘Householders Insurance Policy falls under    
 
Options    
 Commercial insurance category    
 Personal insurance category    
 Life insurance    
 Self insurance

Question No.  38    Marks - 10
In Motor Insurance, in the event of total loss policy    
 
Options    
 Is cancelled    
 Premium is loaded    
 Continues    
 Is re-instated by charging prorate premium    

Question No.  39    Marks - 10
‘Salvage’ In Fire Claim is deducted because of application of principle of    
 
Options    
 Close proximity    
 Utmost good faith    
 Indemnity    
 Insurable interest    

Question No.  40    Marks - 10
Which of the following is not an implied condition under insurance contracts    
 
Options    
 Pro-rata average    
 Utmost good faith    
 Existence of subject matter    
 Insurable interest