pce life past questions

Part A

The Basics of Insurance

Page

1. Introduction to Insurance 1 2. Nature of Risk and its Management 3 3. The Basic Principles of Insurance and An 5 Introduction to Takaful 4. The Insurance Industry in Malaysia 7 5. Consumer Protection and Statutory Regulation 9 6. The Insurance Contract 11 7. Law of Agency 13 8. Marketing & After Sales Services 15

Chapter 1 Introduction To Insurance

1. Mankind has to face the consequences of misfortune which leads to some form of losses. Which of the following are the common losses?

I. Emotional II. Physical III. Financial

A. I B. II and III C. I and II D. I and III

2. An arrangement whereby individual losses are shared by members of a group facing similar risk exposure is called __________

A. Risk B. Contract C. Insurance D. Investment

3. The arrangement whereby the losses

experienced by the unfortunate few compensated by the contributions of many who are exposed to the same risk is called:

A. Pooling of risk B. Unfortunate fund C. Sources of income D. Loss-sharing arrangement

4. When buying life insurance, a fund is

collected to put into a common fund, this fund is called:

A. Shares B. Interest C. Premium D. Investment

Agency Training & Development Dept. 1999

5. Insurance as a device for spreading losses of a few among many can only work when insurers are able to ________ a large number of similar risks.

A. Undertake B. Underwrite C. Overtake D. Operate

6. The law of __________ states that as the

number of losses exposures increases, the predicted loss tends to approach the actual loss.

A. Small numbers B. Medium numbers C. Large numbers D. Even numbers

7. Which of the following regarding insurance

is wrong?

A. It is an economic institution B. It is based on the principle of profit

acquisition C. Its objective is to accumulate funds

to pay for claims D. Only certain risks can be insured

against 8. Which of the following are the function of

insurance?

I. Stimulates business enterprise II. Removes fear and worries III. Means of saving

A. I and III B. II and III C. I and II D. I, II and III

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9. Which of the followings are the risks covered by life insurance?

I. Premature death II. Continuos stream of income

during retirement III. Sickness and disability

A. I and II B. I and III C. II and III D. I, II and III

10. Which of the following is NOT covered by

General Insurance?

A. The value of life B. Motor vehicles C. Marine and aviation D. Products or goods sold

11. The earliest beginnings of insurance were in

the field of ________

A. Motor insurance B. Life insurance C. Fire insurance D. Marine insurance

12. Initially life insurance policies were sold as

________ policies

A. Short term B. Long term C. Mid term D. Variable term

13. Variable premium based on the age of the

life assured was fixed in:

A. 1756 B. 1807 C. 1915 D. 1797

14. The insurance industry in Malaysia had been largely patterned on the _________ system

A. American B. British C. Indian D. Holland

15. In order to standardize and control the

insurance business in Malaysia, the first insurance Act was introduced in

A. 1967 B. 1957 C. 1963 D. 1972

16. Which of the followings are the roles of an

insurance agent?

I. bring financial relief to aggrieved dependents of insured people who may meet with an untimely death

II. inculcate the discipline of savings amongst the working population

III. Encourage the policyholder to convert their policies


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Chapter 2 Nature of Risks and It’s Management

1. An uncertainty regarding loss is often termed as ________.

A. Risk B. Peril C. Hazard D. Possibility

2. _________ refers to an area of study

which measures the chance of occurrence of a particular event.

A. Possibility B. Probability C. Uncertainty D. Prediction

3. Which of the following is NOT an area of

probability study?

A. Priori Probability B. Empirical Probability C. Judgmental Probability D. Numerical Probability

4. When the total number of possible events

are known, it is a study of:

A. Empirical Probability B. Judgmental Probability C. Priori Probability D. Numerical Probability

5. Empirical Probability is determined on the

basis of _________ .

A. government data B. library data C. historical data D. police data


6. Which of the following are major type of Hazard?

I. Occupational Hazard II. Physical Hazard III. Moral Hazard

A. I and II B. II and III C. I and III D. I, II and III

7. The risk that effects the entire economy or

large numbers of person/groups within the economy is called:

A. Fundamental Risk B. Particular Risk C. Minor Risk D. Major Risk

8. The situation where there is the possibility

of profit, loss no loss is

A. Pure Risk B. Speculative Risk C. Particular Risk D. Fundamental Risk

9. Which of the following are the methods of

handling risk?

I. Risk Avoidance II. Loss Control III. Risk Retention IV. Risk Transfer

A. I, II and III B. I, III and IV C. II, III and IV D. I,II,III and IV

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10. Loss control measures handle risks by:

I. Loss Prevention II. Loss Minimisation III. Loss Prediction


11. The systematic approach to dealing with

risks that threaten assets and earnings of a business or enterprise is called:

A. Risk Management B. Risk Conservation C. Risk Diversion D. Risk Avoidance

12. The following arrangement of Risk

Management is wrong, kindly rearrange them according to sequence

I. evaluating potential losses II. implementing the risk

management program III. selecting techniques of risk

handling IV. identifying loss exposures

A. I, III, II, IV B. IV, II, III, I C. IV, I, III, II D. III, II, I, IV

13. Which of the following is NOT the

characteristics of insurable risk?

A. Involved losses with financial value

B. They must be a large number of similar risks

C. Concerned with speculative risk only

D. Must have insurable interest

14. When a loss is one that is accidental and

unintentional, it is

A. Fortuitous losses B. Catastrophic losses C. Containable losses D. Unintentional losses

15. A person who wishes to effect insurance

must have ___________ in the property, rights, interest, life, limb or potential liability to be insured.

A. Ownership B. Insurable interest C. Investment interest D. Unlimited interest

16. There must be a large number of similar

risk before any one of the risk is capable of being insured, the reasons are:

I. To enable the insurer to predict

losses more accurately II. If there are only few risks, the

principle of losses if a few to be borne by many cannot applied

III. The insurance company can charge higher premium


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Chapter 3 The Basic Principles of Insurance and an Introduction to Takaful 1. Which of the following is NOT the special

legal principles embodied in insurance contract?

A. Insurable Interest B. Contribution C. Claim D. Indemnity

2. When must Insurable Interest exist in Life

Policy ?

A. At the beginning and time of death B. At the beginning only C. At the time of death D. At the ttime of policy renewal

3. The best way to transfer rights and liabilities

by one person to another is through ____________

A. Prior Consent B. Assignment C. Trust D. Utmost Good Faith

4. Utmost Good Faith is breached when the

proposer who knows or is reasonably expected to know the materials fact is ____________

I. Fails to disclose II. Been misrepresents III. Been disclose fully and accurately IV. Been loss by the company

A. I & II B. I & III C. I, II & III D. II & IV

Agency Training & Development Dept. 1999 5. Which of the following is NOT a payment

method of indemnity ?

A. Cash B. Repair C. Loss Retention D. Reinstatement

6. Subrogation may rise in the following ways

EXCEPT ______________

A. Contract B. Contribution C. Tort D. Subject Matter

7. “ Mudharabah” is defined as a contractual

agreement between ____________

I. Investor II. Trustee III. Entrepreneur IV. Capital Provider A. I & II B. II & III C. III & IV D. I, III & IV

8. The most accurate definition for “ Tabaruk”

is ______________

A. To withdraw B. To donate C. To transfer D. To contribute

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9. In which part of The Takaful Act 1984

discuss about mode and conduct of Takaful business such as restriction, operations, establishment and maintenance of Takaful fund and allocation of surplus.

A. Part I B. Part II C. Part III D. Part IV

10. Contribution will apply in the following

conditions _____________.

I. The policies must cover a specific peril which give rise to the loss.

II. The policies must cover a specific interest.

III. The loss involves a common subject matter covered by the policies.

IV. Two or more policies of indemnity must be in force.

A. I & II B. II & IV C. III & IV D. I, II & IV

11. The Takaful Act 1984 divides the Takaful

into two broad business categories which is _____________

A. Life & General B. Family & Business C. Family & General D. Business & General

12. Perils which have been expressly excluded

from the policy called ______________

A. Unknown Perils B. Excluded Perils C. Insured Perils D. Uninsured Perils

13. This principle requires the insurers to restore

the insured to the same financial position as he/she had enjoyed immediately before the loss called _________________

A. Indemnity B. Utmost Good Faith C. Contribution D. Subrogation

14. Perils which is not mentioned in the policy

and therefore not covered by the policy unless they occur as a result of an insured perils are known as _______________

A. Unknown Perils B. Insured Perils C. Excluded Perils D. Uninsured Perils

15. “ The life assured is greatly depressed and

throw himself over the balcony resulting in his death. This happens within 1 year of taking out the exclusion in the suicide clause, the insurer is not liable for the death by suicide” . The example describe _________________________

A. Excluded Perils B. Insured Perils C. Unknown Perils D. Known Perils

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Chapter 4 The Insurance Industry in Malaysia

1. Which of the following are the components

of insurance market ?

I. Buyers II. Sellers III. Bankers IV. Service Specialist

A. I & II B. I & III C. II & IV D. III & IV

2. _______________________ is owned by

shareholders and profits earned belong to them.

A. Multinational Company B. Co-operative Society C. Share Company D. Proprietary Company

3. Which of the following is not included

under service specialist ?

A. Doctor B. Lecturer C. Engineer D. Loss Assessor

4. This department involved in setting the

selection criteria, selects the risk and determines the premium, term and conditions of new business and renewals.

A. Audit Department B. Underwriting Department C. Policy Service Department D. Actuarial Department

Agency Training & Development Dept. 1999 5. In which year was the Motor Insurer’s

Bureau (MIB) establish ?

A. 1969 B. 1963 C. 1964 D. 1968

6. Which of the following is NOT the main

objectives of the Malaysian Insurance Institute (MII) ?

A. To provide and maintain central

organisation for promotion of efficiency, progress and general development among persons engaged in the insurance industry.

B. To establish a library for the purpose of the institute

C. To under take research in fields of insurance and other related subjects.

D. To promote and represent the interests of the members companies and the life insurance industry.

7. What is the advantages “ Decentralisation” ?

A. Branches will be granted authority to make decisions promptly.

B. Branches may be over-loaded with routine work.

C. Create uniformity in practice of administration.

D. The management have more authority to control over the company operations.

8. This department is charged with providing

assistance to the company’s policy holders and beneficiaries.

A. Actuarial Department

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B. Agency Service Department C. Customer Service Department D. Administration Department

9. This party normally acts on behalf of the

insured and normally not tied to any one insurer.

A. Universal Agent B. Insurance Dealer C. Special Agent D. Insurance Broker

10. Which of the following is the right

combination to describe about Malaysian insurance industry in 1995 ?

A. 5 life insurers, 28 general insurers

and 13 composite insurers. B. 5 life insurers, 40 general insurers

and 13 composite insurers. C. 18 life insurers, 40 general insurers

and 5 composite insurers. D. 13 life insurers, 40 general insurers

and 5 composite insurers. 11. A co-operative society transacting insurance

business may be termed as a ______________

A. Multi-Level Insurers B. International Insurer C. Mutual Insurer D. Universal Insurer

12. Association of Malaysian Loss Adjusters

(AMLA) was registered as society under __________________.

A. Section II of Societies Act 1966 B. Section 3A of Insurance Act 1997 C. Section 20 (i) of Insurance Act

1963 D. Road Traffic Ordinance 1958

13. In which year the Life Insurance Association

of Malaysia (LIAM) was establish ?

A. 1941 B. 1942

C. 1943 D. 1944

14. “ The main objectives are to establish a

sound insurance structure in Malaysia and to make rules, regulations, tariffs and by laws in consultation with the Director General of Insurance (DGI) for implementation by the members.”

A. Insurance Mediation Bureau (IMB) B. Persatuan Insurans Am Malaysia

(PIAM) C. Insurance Broker’s Association of

Malaysia D. Association of Malaysian Loss

Adjusters (AMLA) 15. Insurers will shared the burden of paying

claims particularly those involving large amount with ___________________.

A. LIAM B. Agents C. Policy Holders D. Reinsures

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Chapter 5 Consumer Protection and Statutory Regulation

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1. Objective of self-regulation by the insurance industry are as follows, EXCEPT: A. Provide some element of protection to insurance consumers. B. Instil discipline in the insurance industry. C. Promote healthy competition. D. Provide the larger market for insurers.

2. Advantages of self-regulation are as follows, EXCEPT:

A. Need to introduce legislation to regulate the industry. B. Helps to instill self-discipline among insurance companies. C. When laws are passed, bureaucratic back-up will be required to enforce them. D. Measures can respond to changing needs faster than legislation.

3. The purpose of PIAM established a “ Code of Ethics and Conduct” is :

A. To instil a better level of discipline and professionalism. B. Standardise remuneration and premium rate. C. To investigate into the business of the insurer. D. to wind up the insurer’s business.

4. The Insurance Guarantee Scheme Fund (IGSF) is financed through a levy imposed on all

_________________.

A. Life Insurers B. General Insurers C. Agents D. Re-insurers

Agency Training & Development Dept. 1999 5. For life insurance business, the main association is :

A. Association of Malaysia Loss Adjusters (AMLA) B. Insurance Brokers Association of Malaysia (IBAM) C. Life Insurance Association of Malaysia (LIAM) D. General Insurance Association of Malaysia (PIAM)

6. The objective of the Insurance Mediation Bureau is to provide dispute resolution

procedures for policyholder and ____________.

A. Insurers B. Agents C. Brokers D. Re-insurers

7. The principle piece of legislation which the insurance companies have to abide by is :

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A. The Companies Act, 1965 B. The Insurance Act,1996 C. The Agreement on General Insurance Act, 1988 D. The Insurance Companies Act,1963

8. The overall purpose of regulation is to protect the ________________.

A. Policy holder’s interest B. Insurers C. Employees D. Agents

9. To protect the policy holder’s interest, the Insurance Act 1963 focuses on three main

areas:

I. Financial Solvency of insurers II. Fair Trade Practices III. Competence of brokers and loss adjusters IV. Management of Insurers.

A. II, III, IV B. I, II, III C. I, III, IV D. I, II, IV

10. The Director General of Insurance (DGI) is empowered to supervise insurance companies

and other things such as the following actions, EXCEPT :

A. Inspect books and other documents of the insurer. B. Investigate into the business of the insurer C. Issue directions regarding the conduct of the insurer’s business. D. Control over the property, management, employees of the insurer.

11. Every insurer (Life Insurance) is required at all time to maintain a surplus of assets over

liabilities of not less than :

A. RM 15 million B. RM 10 million C. RM 5 million D. RM 5 million or 20 % of net premium income in the preceding financial year,

whichever is greater. 12. Insurance business is considered to be affected with ____________ interest because it

plays an important role in society.

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A. Company B. Public C. Individuals D. Families

13. Every insurer must place a cash deposit of not less than _____________ with the

Accountant General.

A. $ 300,000 B. $ 500,000 C. $ 700,000 D. $ 900,000

14. The insurance business is largely controlled by ___________ regulation and to a lesser

extent, by consumers and self-regulation.

A. company B. estate C. financial D. government

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Chapter 6 The Insurance Contract 1. In some instances, the insurer may not

accept a proposal on its original terms but may offer to provide insurance on different terms. This transaction called :

A. Offer and acceptance B. Counter-offer from insurer C. Counter-acceptance D. Counter-offer from insured

2. Offer and acceptance can be expressed

in several ways, they are:

I. Implied from conduct II. Writing III. Orally IV. Voluntary

A. I, II and III B. II, III and IV C. II and IV D. All of the above

3. Insurance contract is a legally binding

agreement between:

I. Government II. Insured III. Insurer IV. Broker

A. I and II B. II and III C. III and IV D. I and IV

4. In general and life insurance contracts,

the insured’s consideration is ___________.

A. To pay or promise to pay

premium B. To promise to accept the policy C. To submit the proposal form D. To promise to accept the loss

Agency Training & Development Dept. 1999 5. The agreement are said to be “

consensus ad idem”, that is :

A. Both parties are not in agreement

B. One party is in agreement C. Both parties are in total

agreement D. No agreement between both

parties 6. Who does not have the legal capacity to

enter into a contract?

A. Minor B. Employer C. Employee D. Public

7. Section 41 of the Insurance Act 1963

provides that a minor above age __________ can enter into a legally binding insurance contract.

A. 21 B. 18 C. 16 D. 15

8. A ____________ contract will remain

valid until the aggrieved party exercises the option to treat it void.

A. Void B. Voidable C. Unenforceable D. All of the above

9. When contracts are tainted by defects at

the time when they are being made, their validity may be ___________.

A. Void

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B. Voidable C. Unenforceable D. All of the above depending on

the nature of the defects 10. If an agreement is to commit robbery

and share the lost; or an insurance policy effected on a ship engaged in smuggling or a person insuring on the life of another for wagering, this contracts is:

A. Void Contracts B. Voidable Contracts C. Unenforceable Contracts D. Illegal Contracts

11. Parties must give consideration before

an agreement can be legally binding. What is consideration meant by the above statement?

I. A benefit which one party

gives to another. II. A burden which one

undertakes for the other. III. A promise which one party

agreed on.

A. I B. I, II C. I, II & III D. None of the above

12. An insurance contract is a legally

binding agreement between an insured and his insurer. The essentials of an insurance contract requirement are:

I. Intention to create legal

relationship II. Offer and acceptance III. Consent-consensus ad idem IV. Consideration

A. I, II B. II, IV C. I, II, III D. All of the above

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Chapter 7 Law of Agency

1. The middle-man or intermediary of the insurance market is termed as:

A. Principal B. Agent C. Agency D. Policy Owner

2. Which of the following is an agent’s most

important function on behalf of the principal ?

A. Making investments B. Making sales C. Making contracts D. Making memorandum

3. Which of the following agency

relationships are NOT relevant?

A. The relationship between principal and agent

B. The relationship between principal and a third party

C. The relationship between agent and intermediaries

D. All of the above 4. The agent can act only within the

authority granted to him by the principal. The granted authority may be _________.

A. Expressed B. Implied C. Apparent D. All of the above

5. Agent’s given authority is expressed

stated in writing, it is called

A. Express authority B. Implied authority C. Apparent authority D. Usual authority

Agent Training & Development Dept. 1999

6. Which of the following is NOT true regarding apparent authority?

A. Apparent authority is an

representation made by the principal to induce a third party reasonable believe that a particular person is an agent of the principal.

B. Apparent authority is based on the belief that the agent had the authority.

C. Apparent authority is also known as usual authority.

D. All of the above 7. The principal may _________ an act

which is not within the agent’s actual authority, as he agrees to accept the act which later become binding on the principal.

A. Ratify B. Improve C. Revoke D. Authorise

8. Agents are classified in accordance with

the authority provided to them. An agent who is appointed to do a specific act or transaction is under this category:

A. General agent B. Special agent C. Universal agent D. Professional agent

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9. The duties of the agent are as follows,

EXCEPT

A. To render accounts to the principal as required

B. Not to conflict his own interest with his obligations to the principal

C. To disclose confidential information obtained during the course of his duties to family.

D. Not to take any bribe from any party.

10. Agents receive their remuneration from

the principal usually in the form of _________.

A. Salary B. Ex-gratia C. Commission D. Bonus

11. The relationships of principal and agent

may be terminated by the following acts, EXCEPT

A. By notice of revocation B. By notice of renunciation C. By mutual disagreement D. By mutual agreement

12. The major characteristic of an agent is

that he has the legality to establish contractual relations between

A. The agent and the policy holder B. The agent and the recruiter C. The insurance company and the

agent D. The insurance company and the

policy holder

13. If the agent helps the policy holder to fill

up the proposal form, he is acting on behalf of ____________.

A. The policy holder B. The insurance company C. The agent himself D. The policy holder’s family

14. When the policy holder makes premium

payment to the agent, such payment is deemed to be payment to ____________

A. The insured B. The insurance company C. The agent himself D. The referral

15. Under the common agency system, an

agent is only allowed to represent ___________ life insurance company.

A. One B. Two C. More than Two D. More than Three

16. Under Insurance Act Section 16A, a

person shall be guilty if he includes or attempts to induce another person to enter an insurance contract by

A. Making statement which he

knows to be misleading B. Concealing material facts C. Making promises that is false and

deceptive D. All of the above

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Chapter 8 Marketing and After Sales Services

1. The functions of an marketing department in a insurance company cover all of the followings EXCEPT

A. Planning B. Purchasing C. Promotion D. Pricing

2. The function of selecting market segments

which have similar needs for policies developed by the company is called __________.

A. Market Diversification B. Market Identification C. Market Development D. None of the above

3. Which of the following is the most

important channel of distribution for insurance products?

A. Agent B. Bank C. Employee D. Vending machine

4. A market-oriented agent will do the

followings, EXCEPT

A. Satisfy the need of customers B. Make profit for ownself C. Use a sales plan and coordinate it

with market analysis, segmentation and targeting

D. Develop and design insurance products

5. What are the basic skills an agent requires as he engages in personal selling?

A. Product knowledge B. Selling process knowledge C. Selling techniques D. All of the above

6. Please identify which of the following is

NOT part of the customer buying decision process.

A. Problem Recognition B. Information search C. Handling objection D. Post-Purchase Evaluation

7. Based on the studies conducted by U.S.A.

indicating the most important factor for the selection of a particular insurer is __________

A. The reputation of the agent B. The reputation of the insurer C. The products of the insurer D. The location of the insurer

8. One of the major factors that effect

customer’s information search for fulfilling his/her need is _____________

A. Consumer’s experience in

purchasing B. Consumer’s eating habits C. Consumer’s weight and height D. None of the above

9. Prospects are salesperson’s _________

A. Potential employers B. Potential employees C. Potential customers D. Potential partners

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10. When selling is done indirectly by establishing goodwill between the agent and his customers, it is called:

A. Order Selling B. Creative Selling C. Missionary Selling D. Massive Selling

11. The agent is helping the customer to

uncover his needs and recommending policies to meet those needs. This selling techniques is called _______________

A. Order Selling B. Creative Selling C. Missionary Selling D. Massive Selling

12. The benefit of after sale services are

stated as follows, EXCEPT

A. Minimise lapsed policy B. Maintain mode of payment C. Enhance the agent’s business D. Enhance the insurer’s reputation

13. Which of the following is NOT true for

mode of payment?

A. Premium can be paid by yearly, half yearly, quarterly or monthly instalment.

B. Yearly premium is the lowest premium paid

C. Monthly premium can be collected through home service

D. Monthly premium involves the least administrative work

14. A due payment shall be paid on the date

specified in the policy contract. However, most contracts provide that such payments can be made within 30 days from the due date. It is called ____________

A. Lapse period B. Grace period C. Expiry date D. Allowance period

15. Which of the following is the evidence of premium payment for the policy holder?

A. Official receipt B. Premium notice C. Policy Register D. Proposal form

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Part C Life Insurance

Page 16. Life Insurance Preliminaries 18 17. Life Insurance Products 20 18. Policy Conditions 22 19. Practice of Life Insurance 24 --New Business --Selection of Lives and Other Issues 20. Practice of Life Insurance 26 --New Business --Premium Rating 21. Practice of Life Insurance 28 --Monitoring the Insurance Fund 22. Practice of Life Insurance 30 --Policy Documents 23. Practice of Life Insurance 32 --Claims 24. Some Mathematics 34 25. Practice of Life Insurance 36 --Ethics & Code of Conduct

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Chapter 16 Life Insurance Preliminaries

1. The first case of life insurance was on the life of William Gybbon from England in the year:

A. 1683 B. 1583 C. 1863 D. 1368

2. Life insurance contracts are long-term

contracts with usually _______ premiums.

A. High B. Low C. Level D. Variable

3. When determining the premium rate,

which of the following was not taken into account by the insurance company:

A. mortality B. Expenses C. Tax D. Political stability

4. The term “ Uberrima fides” is referring

to:

A. Insurable interest B. Claim C. Utmost good faith D. Moral hazard

5. A contract where one party provides

something of value to another party in exchange for a promise that the other party will perform a stated act if a specified, uncertain event occurs is called an:

A. Investment contract B. Aleatory contract C. Unilateral contract D. Offering contract

6. Which of the following situation do not have insurable interest:

A. a person insuring his own life B. a creditor insuring the life of his

debtor C. an employer insuring the life of

his key employee D. a brother insuring the life of his

sister 7. Insurable interest needs to exist at

_______ of the insurance.

A. the inception B. the time of making a claim C. all time D. the point of applying

8. Section _______ of the Insurance Act,

1963 elaborates the principle of insurable interest.

A. 39 B. 40 C. 47 D. 48

9. In life insurance, except Permanent health

insurance policies, the settlement of a claim __________ the contract.

A. renew B. terminates C. extend D. revised

10. For life insurance contracts, the risk to be

insured __________ with time.

A. decreases B. increases C. remain D. end

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11. Which of the following risks is not covered by life insurance?

A. Premature Death B. Permanent Disability C. Damage of Property D. Retirement Benefits

12. Which of the following parties need to

observe the principle of utmost good faith?

I. The insured II. The agent III. The insurer IV. The legislator

A. I, II and III B. I and III C. II and IV D. II, III and IV

13. With the passage of time, reliable

_________ tables based on assured lives were obtained and mathematical techniques were developed to deal with life insurance on a scientific basis.

A. Mobidity B. Mortality C. Statistical D. Historical

14. Which of the followings are the

disadvantages of issuing life insurance policies on a short term basis when it was first introduced:

I. cover was often denied when it

was most needed II. the insurer do not have to bare

the risk for long time III. the premiums tended to

increase with duration to reflect the increasing risk undertaken

A. I and II B. II and III C. I and III D. I, II and III

15. In life insurance contracts, there is

generally no obligation on the part of the ___________ to report any changes of circumstances once the contract has been in force, except in respect of occupation and change of address.

A. agent B. insurer C. insured D. legislator

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Chapter 17 Life Insurance Products

1. “ This contract is mainly for protection purpose and the main benefit s generally guaranteed.” Which of the following contract describe the above statement ?

A. Participating Contract B. Non-Participating Contract C. Endowment D. Annuities

2. The earliest and simplest form of life

insurance contract is called ________

A. Level Term Insurance B. Ordinary Life Policy C. Decreasing Term Insurance D. Renewable Term Insurance

3. Level Life Annuity Contract can be defined

as a __________________

A. Chooseable mode of payment by survival within a fixed period of time.

B. Lump sum payment made during a fixed period of time.

C. Periodic payment made during a fixed period of time or for the duration of the survival of a designated life or lives.

D. Lump sum payment made during a variable period of time.

4. What is the best policy to be recommended

to cover the life assured if he / she should sustain any bodily injury due solely and directly caused by external violent and visible means ?

A. Endowment B. Personal Accident Benefit C. Permanent Disability Benefit D. Hospitalisation Benefit

5. Which of the following are the different kinds of life insurance contract ?

I. Marine Insurance II. Ordinary III. Home Services IV. Group Insurance

A. I, II & IV B. III & IV C. II & III D. II, III & IV

6. Which of the following policies would you

recommend to a customer who needs to prepare an education fund for their children or to make an investment ?

A. Endowment Policy B. Whole Life Policy C. Investment Linked Policy D. Group Policy

7. What is the minimum age limit required to

participate inTakaful Plan ?

A. 16 B. 18 C. 15 D. 17

8. Family Takaful Plan participants may elect

to incorporate ant of the following supplementary benefits EXCEPT :

A. Permanent Total Disability B. Personal Accident C. Hospitalisation Benefit D. Child Education Benefit

22

9. In Takaful, a person who joins any of the Family Takaful Plan become a __________________ .

A. Participant B. Policy Holder C. Contributor D. Client

10. Each Takaful instalment made by the

participants shall be divided and credited by the company into two separate account namely _____________________ .

A. Investment Account & Participant’s

Account B. Risk Account & General Account C. Participant’s Account &

Participant’s Special Account D. Special Participant’s Account &

Risk Account 11. Family Takaful Plan benefits shall be paid to

participants depending on the following cases except _____________________

A. The participants dies before the

term of the plan,’ B. The participant survives to the end

of the term of the plan. C. The participant terminates the

contract. D. The participant has been diagnosed

of dread diseases within the term of the plan.

12. Which of the following is true about group

insurance ?

A. It cannot be issued to unions, trust and other entities.

B. Group insurance may extend to cover employee’s spouse and eligible children.

C. The employee has to go for medical examination.

D. Group term life insurance is a monthly renewable contract.

13. Which of the following policy generally utilised to cover loans which is gradually being repaid.

A. Level Term Insurance B. Convertibility Feature C. Renewable Term Insurance D. Decreasing Term Insurance

14. Family Takaful benefits are divided into

three (3) main portion as below EXCEPT

A. Permanent Disability Benefit B. Death Benefit C. Maturity Benefit D. Surrender Value Benefit

15. Endowment insurance can be used as

________________

A. An incentive to save in a systematic manner.

B. A mean of accumulating a fund for specific purposes.

C. A mean of hedging against the possibility of untimely death

D. All the above

23

Chapter 18 Policy Conditions 1. ______________ days of grace are allowed

for the payment of yearly, half-yearly, quarterly and monthly premiums.

A. 15 B. 20 C. 30 D. 45

2. Which of the following regarding days of

grace is NOT true?

A. Coverage will still be given, during the days of grace.

B. 15 days of grace are allowed for monthly premiums

C. If renewal premium is not paid within the days of grace, the policy ceases.

D. If the policy has non-forfeiture provisions, the policy shall not lapse even after the grace period.

3. When a policy is inforce for

_________years or more, the ordinary policy becomes entitled to a surrender value.

A. 6 B. 2 C. 3 D. 5

4. Section ___________ of the Insurance Act,

1963 regulates the basis of surrender values.

A. 39 B. 43 C. 34 D. 50


5. Which of the following regarding policy loans is NOT true?

A. The governing rate of interest on

the loan shall be fixed by the company granting the loan.

B. The policy loans must be repaid within 3 years after the issuance of such loan.

C. The policyholder becomes entitled to loan only after his policy has acquired a cash value.

D. The amount of loan available will be quoted on application to the company.

6. _________ policy is a policy under which,

the cash value available is used as a single premium to provide for an insurance on the original terms, but for a reduced sum assured.

A. Extended term B. Paid-up C. ReducingTerm D. Level term

7. Which of the following is NOT under the

non-forfeiture provision:

A. Automatic Premium Loan B. Paid-up Policy C. Extended Term Assurance D. Reducing Term Assurance

24

8. Which of the following are the criteria of

Automatic Premium Loan?

I. It provides a continuation of the insurance cover when the assured fails to pay a premium.

II. The assured must provide evidence of insurability when bringing the policy back to its original status.

III. Premiums shall be thus paid until the cash value has been entirely utilized.


9. Which of the following regarding paid-up

policy is NOT true:

A. Once the policy is converted into paid-up policy, no further premiums are payable.

B. All riders and supplementary benefits such as for disability and accidental death shall remain in force.

C. Generally a participating policy will cease to participate in future benefits after such conversion.

D. This may be attractive for assured approaching retirement.

10. The length of extended term assurance

depends on the available amount of _________

A. Cash Value B. Bonus Value C. Premium Payable D. Cash Dividend

11. Which of the following is NOT considered

when applying for reinstatement:

A. Medical evidence B. Non-forfeiture period

C. Days of grace D. Insurable interest

12. When the insured commits suicide within a

stated period of time

I. The policy becomes void II. The insurer shall pay the claim III. All premiums paid shall be

refund


13. The insurer cannot deny liability on a policy

after ________ years of its issue on the grounds of misrepresentation or non-disclosure alone unless he can prove that such misrepresentation or non-disclosure was made fraudulently by the insured.

A. 3 B. 2 C. 6 D. 5

14. The following documents are generally

acceptable as proof of age EXCEPT :

A. Official certificate of birth B. School leaving certificate C. Police report of missing I.C. D. International Passport

15. An ________ is one which does not leaves

any right with the assignor except paying of premiums if he chooses to pay.

A. Conditional Assignment B. Absolute Assignment C. Transferable Assignment D. Revocable Assignment

25

Chapter 19 Practice of Life Insurance - New Business -Selection of Lives and Other Issues

1. In calculating risks, the insurer have to consider a few factors that may affect the policy condition which is ____________.

I. Avocation II. Education III. Occupation IV. Ethnicity

A. I & II B. II & IV C. II & III D. I, III & IV

2. Which of the following statement is not

true?

A. Female mortality is lower than male mortality.

B. Lower premium for female. C. Male morbidity is lower than

female morbidity. D. Female mortality is higher than

male mortality. 3. The insurer usually employs any one of the

following methods to deal with sub-standard lives EXCEPT :

A. Reduce the coverage as well as the premium

B. Decline or postpone the coverage C. Offer an alternate form of contract D. Charge a debt or lien

4. Financial underwriting seeks to discover the following EXCEPT :

A. Insurable Interest B. Physical Hazard C. Financial Status D. Moral Hazard

5. When the proposal being approved without

premium payment, company will issue a letter of acceptance to the proposer required to make a payment within ________ days.

A. 15 B. 30 C. 60 D. 90

6. “ The insured within 14 days of receipt of the policy can return the policy with a notice in writing objecting to a term or condition of the policy and the insurer then has to refund the premium. This is known as _________

A. Consideration Period B. Cooling-Off Period C. Non-Confirmation Period D. Probation Period

7. When there is an extra loading on the proposal, a letter indicating the loading is issued to the proposer as a _________ .

A. Rejection B. Postpone coverage C. Counter-offer D. Confirmation

26

8. Commencement of the policy may be back dated to an earlier date for a maximum of up to __________ months.

A. 2 B. 4 C. 6 D. 8

9. The insurer will issue a/an ___________

upon receiving the premiums.

A. Confirmation letter B. Official receipt C. Policy D. Agreement

10. “ The insurer shall maintain an up to date

register of all policies issued and none of these policies shall be removed from the register as long the insurer is still liable for these policies.” This instruction falls under ____________ .

A. Section 9, Insurance Act 1963 B. Section 14 (A) , Insurance Act 1963 C. Section 3, Income Tax Act 1967 D. Section 2, Societies Act 1966

27

Chapter 20 Practice of Life Insurance - New Business - Premium Rating

1. Principle of insurance is when a group of people facing similar risks are combined into a group there will be less uncertainty about the amount of loss likely to be insured within a certain period. This principle is called :

A. Law of large numbers B. Moral Hazard C. Mortality Rates D. Costing Risks

2. Additional premium will be charged in the

following cases, EXCEPT :

A. Sporting activities involved additional risk of death

B. Hazardous health C. Change of address D. Sub-standard health

3. For sub-standard life, the underwriter

usually will

A. Increase the cash value in the policy B. Increase the premiums C. Reduce the premium D. Increase the bonus.

4. Most of the individual insurance policies

sold nowadays provide for the payment of a ___________ over predetermined term.

A. Net premium B. Gross premium C. Bonus Loading D. Level premium

5. The basic principle of the risk premium varying with ____________ is behind the concept of the level premium.

A. Age B. Sex C. Investment returns D. Occupation

6. Participating policies enjoy the right to share

in the profits of the operation of a life insurance company in the form of bonuses called:

A. Bonus Link B. Bonus Loading C. Cash bonus D. Bonus Profits

7. Gross premium = Net Premium + Loading

for _________________

A. Bonus B. Bonus and Profits C. Expenses, Profits and

Contingencies D. Interest, Bonus and Profits

8. Two types of periodical premiums:

I. Instalment premium II. True Premium III. Consistent Premium IV. Level term Premium

A. I and II B. I and III C. II and III D. III and IV

28

9. Under this type of periodical premium, in the event of death occurring before all the premium payments for that particular policy year have been paid, the remaining instalments of that year are deducted from the claim amount payable under the policy.

A. Instalment Premium B. True Premium C. Consistent Premium D. Level Term Premium

11. Under this type of regular premiums, the

premium payments cease on death and no deduction is made from the claim amount as in the instalment premium

A. Pure Premium B. True Premium C. Consistent Premium D. Level Term Premium

12. What type of policies enjoy the right to

share in the profits of the operations of a life insurance company in the form of bonuses?

A. Gross Premium B. Net Premium C. Loading for expenses D. Risk Premium

13. When the premium charge is computed after

taking into account the elements of mortality and interest, it is called the _________.

A. Gross Premium B. Net Premium C. Loading for expenses D. Risk Premium

14. In the determining the gross premium for participating policies, the corresponding elements are:

I. Mortality II. Interest III. Expenses IV. Bonus loading

A. I, II and III B. I, II and IV C. I, III and IV D. I, II, III and IV

29

Chapter 21 Practice of Life Insurance – Monitoring The Insurance Fund 1. Liability = The present value of the benefits

payable ______ . The present value of expenses _______. The present value of the future premium receivable.

A. Plus, Plus B. Less, Less C. Plus, Less D. Less, Plus

2. Under this methods of Distributing Surplus,

the bonus allotted is in proportion to the sum assured and the bonuses accumulated under the policy.

A. Compound Reversionary Bonus B. Cash Bonus C. Interim Bonus D. Guaranteed Bonus

3. ___________ is only paid on policies

resulting into claims either by maturity or death, provided the policies concerned had been kept fully inforce by payment of premiums until such date of claim.

A. Cash Bonus B. Terminal Bonus C. Interim Bonus D. Guaranteed Bonus

4. The assets may be valued in several ways,

depending on the purpose of the valuation. Some of the common methods of valueing assets are:-

I. Cost Price II. Book Value III. Market Value IV. Cash Value

A. I, II and III B. I, II and IV C. II, III and IV D. I, III and IV

5. Which among the following are NOT a form of bonus?

A. Simple Reversionary Bonus and

Compound Reversionary Bonus B. Cash Bonus and Maturity Bonus C. Interim Bonus and Guaranteed

Bonus D. Mortality Bonus and Cash Value

Bonus 6. The portion of the surplus that may be

passed to the shareholders in the form of individuals is normally stated in the company’s memorandum of Articles of Association or by registration and is in the region of _________ of the divisible surplus.

A. 10% - 25% B. 10% - 30% C. 20% - 40% D. 15% - 25%

7. What type of the value which the assets can

be sold in the open-market?

A. Cash Value B. Book Value C. Market Value D. Cost Value

8. Surplus is the difference between the value

placed on the _________ and the value of the ________. It will vary according to the bases chosen for these valuations.

A. mortality, interest B. assets, liabilities C. expenses, asset D. mortality, asset

30

9. Which of the value placed on the assets in the company’s accounts books?

A. Book Value B. Cost Value C. Market Value D. Cash Value

10. Under current conditions, the main sources

of surplus are:

I. Interest II. Mortality III. Expenses

A. I and II B. II and III C. I, II and III D. None of the above

11. This is the price at which the asset was

acquired. This is :

A. Retail Price B. Cost Price C. Market Price D. Fix Price

31

Chapter 22 Practice of Life Insurance – Policy Documents

1. Generally, information necessary for the proper assessment of risk obtained from different sources as below, EXCEPT:

A. Pay slip B. Physician’s Statement C. Medical Report D. Proposal Form

2. What type of form need applicant to fill-up

major portion of the information relating to the applicant himself?

A. Proposal Form B. Medical Form C. Declaration Form D. Payment Form

3. The proposal form completed by the

applicant contains:

I. Personal Particulars II. Details of Insurance III. Occupation, residence, travel and

hazardous pursuits. IV. Personal and family history.

4. In general, which special conditions need

endorsement?

I. Those affecting the premium. II. Those affecting the sum insured

or its mode of payment III. Those incorporating special

benefits. IV. Those incorporating special

restrictions.

A. I and II B. I, II and III C. I, II and IV D. All of the above

5. “ This section includes a declaration that answers given in the proposal and medical report forms shall form the basic of the contract.” The above portion found in which section in the policy structure?

A. The Preamable B. The Proviso C. The Operative Clause D. The Schedule 6. The standard policy documents are often

endorsed to take into account the differing aspects of individual circumstances and needs. Endorsements can be done at the:

I. Time of issue of policy II. After issue of the policy III. Before issue of the policy

A. I and II B. I and III C. II and III D. All of the above

7. The proposal form completed by the applicant contains as below, EXCEPT: A. Details of liabilities

B. Personal particulars C. Details of insurance D. Personal and family history

8. Endorsement during the issue of a policy

mainly is to change the following, EXCEPT:

A. Those affecting the premium or its frequency of payment

B. Those affecting the sum insured C. Those incorporating special restriction D. Surrender of bonus

32

9. Besides recording the applicant’s answers

concerning medical history, the reports of examining doctor include:

I. Height and weight II. Pulse and blood-pressure

readings III. Chest and abdomen

measurements IV. Condition of the heart, lungs,

nervous system.

A. I and II B. I, II and III C. II, III and IV D. All of the above

10. Two main forms of policy are in use the

________ type and the ________type.

I. Narrative II. Schedule III. Preamble IV. Conditions

A. I & II B. II & III C. III & IV D. I & IV

11. Which section is the final portion of the

policy and is signed by certain authorized officers of the company?

A. Conditions and privileges B. Attestation C. The proviso D. The Schedule

12. Which report furnishes the agent’s

impression about the applicant’s habits, appearance, character and financial status.

A. Previous Report B. Physician’s Report C. Agent’s Report D. Company’s Report

13. Which form of policy is very simple, readily

understood and elastic in adaptability ?

A. Schedule type B. Narrative type C. Preamble type D. Conditions type

14. This section contains the applicant’s

declaration, to the best of his knowledge, true and complete and permission authorizing the insurer to seek information from any doctor who has ever attended to him and any life office. Which section is these ?

A. Personal and family history B. Declaration and authorization C. Details of insurance D. Personal particulars

33

Chapter 23 Practice of Life Insurance – Claim

1. Under which circumstances, a claim may arise ?

A. When the insured make a will B. When the insured died C. When the insured make a policy

loan D. When the insured stop premium

payment 2. Which of the following statement is NOT

true ?

A. The life insurance contract terminates when a claim is settled.

B. The insured may make a claim upon the maturity of the insurance policy.

C. The reputation of an insurer lies in the sum of claims to be settled.

D. None of the above 3. When a death claim is made, the insurer

need to obtain the following documentary evidences from the claimant, EXCEPT

A. Proof of survival B. Proof of death C. Proof of age D. Proof of title and ownership

4. Which of the following is accepted by the

insurer as a proof of death?

A. A report from a dentist B. A report from a coroner C. A report from an architect D. A report from a lawyer

5. When the claimant notify the insurance

company that he want to make a death claim, he need to provide the insurer information on

A. The policy holder’s name B. The spouse’s date of death C. The doctor’s name

D. All of the above 6. The following documents are proof of title

and ownership of an insurance policy, EXCEPT

A. A deed of assignment B. A probate of the will from a court

of law C. A note from the insured’s family D. A letter of administration issued by

a court of law 7. The maturity claims will be paid

A. At the beginning of policy term B. At the middle of the policy term C. At the end of the policy term D. None of the above’

8. In settling a maturity claim, the insurer

require this document:

A. Proof of death B. Proof of survival C. Medical certificate D. A letter of administration

9. Which of the following is NOT relevant to

the common settlement option for an endowment plan?

A. Convert the maturity proceeds into

annuity B. Continue deposit the maturity

proceed with the insurer C. Withdraw 90% of the proceed

without the letter of probate D. Withdraw the proceed by

instalments

34

10. Doctrine of ____________ is important to claims for personal accident policies because there may be more than one conditions leading to the claim.

A. Contribution B. Proximate Cause C. Subrogation D. Indemnity

11. The insurer will pay the claim amount under

all these situation, EXCEPT

A. All documents required are valid B. No breach of various policy

conditions C. In doubt of the legitimacy of the

claimant D. Insurer is satisfied with all inquiries

conducted 12. If the proper claimant has no letters of

probate or administration, under section 44 of the Insurance Act 1963, the insurer may

A. Pay the full amount if the policy

proceeds are below RM20,000 B. Pay 50% of the policy proceed if

it exceeds RM20,000 C. Pay maximum up to RM70,000 if

it exceed RM20,000 D. None of the above is correct

35

Chapter 24 Some Mathematics

1. En Ahmad was born in May 2, 1970. I submitted his proposal on October, 1996, if the insurer used age last birthday as basis, what is En Ahmad’s age in his proposal?

A. 26 B. 27 C. 28 D. 29

2. What is En Ahmad’s age if he submitted his

proposal on Feb 3, 1998 and the insurer used age next birthday as basis?

A. 26 B. 27 C. 28 D. 29

3. What is En Ahmad’s age if he submitted his

proposal on Dec 3, 1996 and the insurer used age nearest birthday as basis?

A. 26 B. 27 C. 28 D. 29

4. Premium rate for life insurance policies

usually vary with the following factors in relation to the proposer.

I. Age II. Sex III. Health IV. Height

A. I & II B. I, II & III C. I, II & IV D. All of the above

5. Interest charged will incur when the policy holder ____________ .

A. Reinstate a lapsed policy B. Repay the outstanding premium C. Repay a policy loan D. All of the above

6. Policies which accumulate ___________-

often carry the right to a policy loan.

A. Bonus B. Cash values C. Premium D. Surrender value

Please refer to Table I and II for question 7 – 10. Table I : Premium Rate for 25-year endowment insurance on male lives Treat female lives as 3 years younger Age (Next birthday) Premium per RM

1,000 sum assured 25 39.50 26 40.00 27 40.50 28 41.25 29 42.00 30 42.80 31 43.60 Table II : Discounts for large sums assured Sum assured (RM) Discount Per RM

1,000 Sum Assured 10,000 – 24,999 RM1.00 25,000 – 39,999 RM2.00 40,000 – 54,999 RM3.00 55,000 – 69,999 RM4.00 Above 70,000 Special Quotation

36

7. Calculate the premium for the following policyholder,

Policyholder : Victor Sex : Male Age : 26 Sum Assured : RM 10,000

A. RM 390 B. RM 395 C. RM 400 D. RM 405

8. Calculate the premium for the following

policyholder, Policyholder : En Mat Sex : Male Age : 30 Sum Assured : RM 45,000

A. RM 1,755 B. RM 1,791 C. RM 1,890 D. RM 1,926


policyholder and determination of age is next birthday.

Policyholder : Mr Chan Sex : Male Date of birth : July 25, 1970 Cover to commence : January 26, 1998 Sum Assured : RM 50,000

A. RM 1,875.00 B. RM 1,912.50 C. RM 2,025.00 D. RM 2,062.50


policyholder, determination of age is next birthday.

Policyholder : Puan Salmah Sex : Female Date of birth : December 25, 1970 Cover to commence : January 26, 1998 Sum Assured : RM 30,000

A. RM 1,125.00 B. RM 1,185.00 C. RM 1,177.50 D. RM 1,237.50

11. Mr Tan made the last premium payment for his lapsed policy on 30 January, 1997. He would like to reinstate his policy on 30 January 1998. What is his interest charge for reinstating the policy? Detail of Mr Tan’s policy: Policy type : Whole life Sum assured : RM 150,000 Annual premium : RM 850 Interest charges : 6 % per annum

A. RM 41 B. RM 51 C. RM 410 D. RM 510

11. En Ahmad would like to find out how much

he need to pay for his outstanding premium and accumulated interest charges for reinstating his lapsed policy, the details of the policy is as follows:

Policy type : Whole life Sum Assured : RM 100,000 Annual premium : RM 600 Last premium paid : 15 January 1996

Application for reinstatement : 15 January 1998 Interest charges : 6% per annum A. RM 636.00 B. RM 1,200.00 C. RM 1,236.00 D. RM 1,310.16

37

Chapter 25 Practice of Life Insurance – Ethics & Code of Conduct

1. The guidelines for Code of Conduct, which are abided by all employees of insurers operating in Malaysia at all times, are formulated by

A. Life Insurance Association of

Malaysia (LIAM) B. The Actuarial Society of Malaysia

(ASM) C. The Malaysian Insurance Institute

(MII) D. National Association of Malaysian

Life Insurance Agents (NAMLIA) 2. Which of the following is NOT true for the

statement of philosophy concerning the guidelines on the Code of Conduct ?

A. The life insurance business is based

on the philosophy of risk sharing. B. Life insurance is a business based

on trust and honesty C. Life insurer should manage their

business soundly as to ensure the safety of the agent’s savings.

D. Life insurers shall maintain a policy of efficient and prompt service to policy owners with the aim of promoting goodwill.

3. the objectives of the Code of Conduct is to

provide a guide for

A. Promotion of proper standards of conducts

B. Maintaining ethical standards C. Upholding the trust and welfare of

policyholders D. All of the above

4. Who is the supervisory authority for

insurance companies?

Agent Training & Development Dept. 1999

A. Bank Negara B. Audit/ Disciplinary committee C. Board of Director D. Insurers

5. Which of the following are parts of the

seven principles underlying the guidelines on Code of Conduct ?

I. To avoid conflict of interest II. To ensure confidentiality of

communication and transactions between the policy holders and Bank Negara.

III. To conduct business with the utmost good faith and integrity.

A. I only B. I and II C. I and III D. I, II and III

6. The insurer is required to establish a

minimal procedures to ensure the guidelines on Code of Conduct are abided by at all times, the procedures included

A. I only B. II only C. I and II D. I, II and III

7. The term life insurance used in the Code of

Ethics and Conduct covers:

I. Home service II. Ordinary Life Insurance III. Pension Contracts

A. I only B. II and III

38

C. I and II D. I, II and III

8. The life insurance’s Code of Conduct

applies to all the following persons, EXCEPT

A. Life insurer’s employees B. Registered insurance brokers C. Insurance agents D. None of the above

9. As an insurance agent, he/she SHALL NOT

A. Make inaccurate or unfair criticisms of any insurers

B. Produce his registered intermediary authorisation card to identify himself when he makes contact with the prospective policyholder

C. Ensure the policy proposed is suitable to the needs of the prospective policyholder

D. Render continuous service to the policyholder

10. In explaining the contract to prospect

policyholder, the insurance agent SHALL NOT

A. Explain all the essential provisions

of the contracts B. Conceal as far as possible any

restrictions applying to the policy C. Draw attention to the consequent

effects of early discontinuance and surrender

D. All of the above 11. All of the following are not correct,

EXCEPT

A. The agent shall influence the proposer’s answers in completing the proposal form

B. The agent shall keep the money received from the policyholder for one month before forward it to the concerned insurance company

C. The agent shall ensure that the proposer aware of the consequences of non-disclosure and inaccuracies in the proposal form

D. The agent shall make it clear that all the answers or statements in the proposal form are the agent’s own responsibility

12. The _____________Committee of the

insurer is responsible for monitoring compliance to the guidelines by the insurer.

A. Underwriting B. Account and Finance C. Audit/Disciplinary D. Claims

13. Which of the following is NOT true in

relation to claim?

A. Insurer shall collect a claim processing fees from the policyholder

B. The guidelines require that an insurer may not unreasonably reject a claim

C. The claim has to be settled without undue delay if the insured event was proved by the claimant

D. None of the above 14. The proposal form shall include statements

that

A. Draw attention to the consequences of non disclose of all material facts

B. Warn the proposer to disclose all the material facts even it is in doubt

C. State that a copy of the policy form is available from the agent for viewing on request

D. All of the above

39

ANSWERS________________________________________ PART A 1 1. D 2. C 3. A 4. C 5. B 6. C 7. B 8. D 9. D 10. A 11. D 12. A 13. B 14. B 15. C 16. A 2 1. A 2. B 3. D 4. C 5. C 6. B 7. A 8. B 9. D 10. A 11. A 12. C 13. C 14. A 15. B 16. A 3 1. C 2. B 3. B 4. A 5. C 6. B 7. C 8. B 9. B 10. C 11. C 12. B 13. A 14. D 15. A 4 1. A 2. D 3. B 4. B 5. C 6. D 7. A 8. C 9. D 10. B 11. C 12. A 13. D 14. B 15. D 5 1. D 2. A 3. A 4. B 5. C 6. A 7. D 8. A 9. B 10. D 11. C 12. B 13. A 14. D 6 1. B 2. A 3. B 4. A 5. C 6. A 7. C 8. B 9. D 10. D 11. B 12. D 7 1. B 2. C 3. C 4. D 5. A 6. C 7. A 8. B 9. C 10. C 11. C 12. D 13. A 14. B 15. A 16. D 8 1. B 2. B 3. A 4. D 5. D 6. C 7. B 8. A 9. C 10. C 11. B 12. B 13. D 14. B 15. A

40

ANSWERS_______________________________________ PART C 16 1. B 2. C 3. D 4. C 5. B 6. D 7. A 8. B 9. B 10. B 11. C 12. B 13. B 14. C 15. C 17 1. B 2. A 3. C 4. B 5. D 6. A 7. B 8. D 9. A 10. C 11. D 12. B 13. D 14. D 18 1. C 2. B 3. C 4. B 5. B 6. B 7. D 8. B 9. B 10. A 11. D 12. B 13. B 14. C 15. B 19 1. D 2. D 3. A 4. B 5. D 6. B 7. C 8. C 9. B 10. A 20 1. A 2. C 3. B 4. D 5. A 6. B 7. C 8. A 9. A 10. B 11. C 12. D 13. B 14. D 21 1. C 2. A 3. B 4. A 5. D 6. A 7. C 8. B 9. A 10. C 11. B 22 1. A 2. A 3. D 4. D 5. B 6. A 7. A 8. D 9. D 10. A 11. B 12. C 13. A 14. B 23 1. B 2. C 3. A 4. B 5. A 6. C 7. C 8. B 9. C 10. B 11. C 12. A 24 1. A 2. C 3. B 4. B 5. D 6. B 7. A 8. B 9. B 10. A 11. B 12. C 25 1. A 2. C 3. D 4. A 5. C 6. D 7. D 8. B 9. A 10. B 11. C 12. C 13. A 14. D

41