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Mark, trying to analyse ABC insurance company came across loss ratio of the company as 60%. He concluded for every $100 of premium received company’s pay-out are of $60 in claimsCorrectIncorrect
Which of the following can cause increase in health insurance premiums?CorrectIncorrect
Defined benefit plans, in order to fulfil their obligations, use bonds to match their assets with liabilities.CorrectIncorrect
Under Solvency II, if capital falls below SCR, insurance company is prevented to take any new business & existing policies might be transferred to another insurance company.CorrectIncorrect
Capital requirement for property insurance underwriting is lower than life insurance underwriting?CorrectIncorrect
In order to reduce exposure to catastrophe risks, companies can
- Pay a reinsurance company to take them
- Use CAT bonds
- Use longevity derivatives
- Stop selling casualty insurance
Accounting standards require pension plan obligations to be discounted at yield of AAA rated bonds?CorrectIncorrect
Which of the following statements are correct regarding pension plans?
Statement 1: Every year PV of benefit plan’s obligations is equated to its assets to check for any shortfall.
Statement 2: In case of shortfall in a defined benefit plan, company must make contribution equal to shortfall.CorrectIncorrect
Which of the following statements is/are incorrect?
Statement 1: Whole life business of an insurance company cannot completely offset exposure to annuity business.
Statement 2: Longevity derivatives cannot be used to manage longevity riskCorrectIncorrect
Which of the following statement is/are correct?
Statement 1: Premiums of a group life insurance company are only paid by employers?
Statement 2: Life insurance division of insurance company welcomes longevity risk, as it leads to more premiums?CorrectIncorrect
Which policy has a feature of pay-out only if policyholder dies within the policy period otherwise there is no pay-out?CorrectIncorrect
Kenny is finding her whole life insurance premiums much high after a recent salary cut at her workplace. She does not want the policy to get lapse completely but wishes to pay less premium than today. Which product is best suited for her needs of whole life insurance?CorrectIncorrect
Which of the following is an insurance policy which allows policyholders to decide how the funds are to be invested?CorrectIncorrect
Mark & Merry are planning to opt for whole life insurance. While understanding about what all they will get in a whole life cover they wrote the following statements. Which of the following statement/s is/are correct about the insurance?
Statement 1: In a whole life insurance, payout to be made by insurance company to policyholder is certain.
Statement 2: Date of payment is uncertain to insurance company
Statement 3: Payment & face value of the policy remains constant over time.CorrectIncorrect
AG – Ins Insurance company is planning to come up with new term insurance policy for women oncoming women’s day. A standard $1000000 term insurance. Two-year term is being proposed. What should be the premium charged by the insurance company considering following information and assumptions?
- Age 40 years
- The applicable interest rate of 3%.(Semi-Annual)
- Earning rate on Breakeven premium is 6%
- The payoff in mid-year
- Use the following mortality table
Age Probability of Death Survival Life Expectancy 40 0.001287 0.97753 42.43 41 0.001393 0.97627 41.48 42 0.001517 0.97491 40.54CorrectIncorrect
Premiums are paid annually and at beginning of year. Interest rate is 4% with semi-annual compounding. A $10M term insurance is being taken by a 50 years old male. Probability of death at age of 50 is 0.005038 and at age of 51 is 0.00552. Calculate expected payout for 1 year and 2 year insurance term, assuming payout occurred halfway throughout the year.CorrectIncorrect
Table below shows ratio for a home insurance company:
Loss Ratio 80% Expense Ratio 25% Combined Ratio ? Dividends 2% Investment Income 15% Operating Ratio ?
Calculate values for missing ratio?CorrectIncorrect
All contributions go into one pooled account and all payments comes out of the one account is a feature of?CorrectIncorrect
Plan in which employer and employee contribution is known and no risk is borne by employer is knows are defined contribution plans?CorrectIncorrect
Which of the following is incorrect about mortality & longevity risk?CorrectIncorrect
Insurer is unable to differentiate between good & bad risk, this is an example of?CorrectIncorrect
Co-insurance provisions is a method mitigate risk arising of?CorrectIncorrect