| Re: Sample paper for ICFAI Univ MBA Group C
You are looking for ICFAI University MBA Group C exam question paper, i am giving here:
1. Which of the following is not true with regard to payment of expenses under Overseas
Medical Policy?
(a) Expenses for physicians’ service, hospitalization, physician-ordered medical
services and local emergency medical transportation
(b) Expenses for physician-ordered emergency, medical evaluation, including medically
appropriate transportation and medical care
(c) Expenses of treatment in respect of a medical condition that was known by the
insured person to exist and/or had been treated in the year immediately preceding the
effective date of the policy, which commences on the day and time of boarding the
aircraft from India
(d) In the event of death of the insured person outside India, expenses for repatriation of
the remains to India or up to an equivalent amount for local burial or cremation
(e) Expenses of dental services for the immediate relief of dental pain only limited to
US $ 225 per occurrence.
2. Which of the following is/are false procedure(s) under Consumer Protection Act, 1986?
(a) Legal formalities not required
(b) Engaging an advocate is compulsory
(c) Filing of complaint requires no legal fee
(d) The party can appear in person or send the application by post
(e) (a), (c) and (d) above.
3. Tariff rates or guideline rates are applicable to the policies mentioned below. Which of the
following is true?
(a) Personal Accident policies
(b) Janata Personal Accident policies
(c) Extension of motor policies to cover P A to third party/passengers
(d) Policy issued by the Department of Aviation
(e) School children P A Group policies.
4. The waiting period of 30 days provision shall not apply,
I. If in the opinion of the panel of medical practitioners constituted by the company for
the purpose, the insured person could not have known of the existence of the disease
or any symptoms or complaints there of at the time of making the proposal for
insurance.
II. In the event of this policy being renewed after its expiry by means of a fresh
document.
III. Any sudden illness like heart attack, food poisoning or accident.
(a) Only (I) above
(b) Both (I) and (II) above
(c) Both (I) and (III) above
(d) Both (II) and (III) above
(e) All (I), (II) and (III) above.
i. e x e
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5. Which one of the following salient feature of Janata Personal Accident Policy is not true?
(a) Any number of policies can be issued to a person
(b) Attractive cost effective premium rates
(c) No pre-medical examination
(d) No service tax on this policy
(e) Group discount is available.
6. Which of the following is not true about package policies?
(a) There is a better spread of business as well as risks in package policies
(b) More administrative expenses such as policy preparation expenses including stamp
fee
(c) As far as the insurer is concerned, it means selling more insurance products under
one policy and earning more premium
(d) To the insured, the policy provides a comprehensive cover in one single policy.
Other wise, the insured has to take a number of individual policies to cover all these
perils
(e) Since the insured is taking a number of covers under one umbrella policy, the insurer
will be able to give substantial discount in the premium though tariff rates are
required to be charged in case of tariff sections.
7. Which of the following is false under Farmer’s Package Insurance Policy?
(a) Policy contains 15 sections including tariff and market agreement sections
(b) Sections A and B, that is, fire and allied perils and terrorism cover on contents are
compulsory
(c) Minimum number of sections to be opted are 3
(d) A family discount of 5% on premium under the sections is allowed for a family
comprising a minimum of two persons
(e) Discount will be allowed only if a minimum of 4 sections are opted for.
8. Which of the following is not true about exclusions under professional indemnity policy?
(a) Infringement of plans, copy right, patent, trade name, trade mark, registered design
(b) Infringement of patents and copy-rights or arising from the granting of licenses by
the insured as a party to the construction project
(c) Insured will be indemnified as a result of claims arising out of all personal injuries
such as libel, slander, false arrest, wrongful eviction, wrongful detention, defamation
etc., and mental injury, anguish, or shock resulting there from
(d) Any dishonest, fraudulent or malicious act or omission
(e) Liabilities assumed by the insured by agreement and which would not have attached
in the absence of such agreement.
9. Under Money Insurance Policy, the company shall not be liable with respect to:
I. Loss of money where an employee of the insured or member of the insured’s family is
concerned as principal / accessory or arising out of or attributable to act of fraud or
dishonesty committed by one or more of the employees carrying the money.
II. Shortage due to error or omission.
III. Loss of money abstracted from safe, following the use of key to the said safe or any
duplicate thereof belonging to the insured unless such key has been obtained by
assault or violence or any threat.
(a) Only (I) above
(b) Only (II) above
(c) Only (III) above
(d) Both (I) and (II) above
(e) All (I), (II) and (III) above.
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10. Which of the following is not a general exception where company shall be held liable?
(a) Loss or damage, whether direct or indirect, occasioned by happening through or
arising from any consequence of war etc.
(b) Loss or damage not caused by depreciation or wear and tear
(c) Consequential loss of any kind or description
(d) Loss, destruction of or damage to any property, whatsoever, or any loss or expenses,
whatsoever, resulting or arising there from or any consequential loss
(e) Any liability of whatsoever nature directly or indirectly caused by or contributed to
by arising from ionizing radiations of or contamination by radioactivity from any
nuclear fuel or from any waste from combustion of nuclear weapons material.
11. No claim bonus has been a subject of controversy. Which of the following is a false
argument either for or against no claim bonus?
(a) It creates no extra work to the work force of insurers in calculation of premiums and
operation of renewal notices
(b) It leads to many disputes between the insured and insurers
(c) The discount acts as an effective incentive to the insured to exercise care
(d) Indirectly, the discount helps contribute towards the objective of road safety
(e) The disputes between the insured and the insurers are not common as are thought of.
At any rate, the tariffs permit discretion to the insurers to allow no claim discount
when they are satisfied that the claim is being made solely by virtue of the Knockfor-
Knock agreement and that the insured was free of blame for the accident.
12. Which of the following special conditions related to baggage insurance policy which has a
bearing on underwriting is false?
(a) Baggage must be insured for its full value. In the event of under-insurance, condition
of average will apply
(b) The purpose of the policy is to cover baggage i.e. personal effects whilst on travel.
The cover starts from the time the travel begins and continues during the stay even at
intermediate places and destination and ends when the insured returns to his original
place or when the period expires whichever is earlier
(c) Notice to police in case of theft is not a must
(d) If baggage policy is to cover objects which are fragile in nature, such other special
items which have high value, will have to be specifically declared and value stated
thereof. If percentage of such items is large the premium rate is loaded
(e) Since the cover is valid during the journey the loss can take place anywhere within
the geographical area covered. Hence it is necessary that notice of claim has to be
sent to the nearest office of the company so that prompt action is possible.
13. Which of the following is false with reference to principle of good faith?
(a) The special facts upon which the contingent chance is to be computed lie more
commonly in the knowledge of the insurer only
(b) The underwriter trusts the insured’s representations and proceeds with confidence
that the latter does not keep back any circumstance in his knowledge, to mislead the
underwriter into a belief that the particular circumstance does not exist, and induce
him to estimate the risk as if it did not exist
(c) Hiding such circumstance is deemed a fraud and therefore the policy is voidable
(d) Although the suppression should happen by mistake without any fraudulent
intention, the underwriter is deceived and the policy is void because the risk run is
really different from the risk understood and intended to be run at the time of
agreement
(e) Good faith forbids either party by concealing what he alone knows, to draw the other
into a bargain exploiting his ignorance.
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14. Based on the survey report which of the following is false with regard to settlement of cla
ims?
(a) The insurer decides whether they are settling the claim and if so for what amount
(b) The recommendations of the surveyor are binding on the insurer
(c) The insurer’s decision has to be communicated to the claimant
(d) A discharge certificate is obtained from the claimant that he is accepting the amount
in full and final settlement of his claim
(e) A letter of subrogation duly executed by the insured/claimant is also obtained.
15. Which one of the following is false with reference to loss prevention measures?
(a) Loss prevention measures tend to be profit-makers for the insurers
(b) Loss prevention measures are aimed primarily at reducing the insurance companies
losses
(c) Another effect of loss prevention is the leveling of risks
(d) Creating less homogeneous portfolios require less extensive reinsurance
arrangements
(e) Loss prevention promotes a true premium justice; good risks pay lower premium
and bad risks pay higher premium.
16. Which one of the following features of a warranty is false?
(a) It is an unconditional promise by the assured
(b) It need not relate to the material fact
(c) It can be withdrawn during the currency of the policy
(d) It must be adhered to exactly
(e) The assured cannot remedy a breach of warranty, as the fact of breach determines
the insurer’s liability.
17. Which of the following is a true benefit of Industrial All Risks Policy?
(a) The policy covers all risks including petrochemical risks having sum insured of
Rs.100 crores
(b) Premium is charged only for flood and cyclone and earthquake perils. All other
special perils under the fire portfolio are inbuilt covers and no additional premium
charged
(c) Loss of profits for special perils under fire (except storm, tempest, flood, inundation
and earthquake) is optional with extra premium
(d) The Industrial All Risks Policy is a policy with warranties
(e) Under the policy, fire loss of profits is optional whereas machinery loss of profits is
built-in.
18. Which of the following causes are excluded under Industrial All Risks Policy?
I. Collapse or cracking of buildings.
II. Nuclear group of perils.
III. War group of perils.
IV. Larceny, fraud or dishonesty.
V. Willful negligence on the part of the insured.
(a) (I), (II) and (III) above
(b) (II), (III) and (IV) above
(c) (III), (IV) and (V) above
(d) (I), (II), (III) and (IV) above
(e) All (I), (II), (III), (IV) and (V) above.
19. Which one of the following risks is not covered under Motor Package Policy?
(a) Riot and strike, malicious or terrorist acts
(b) Earthquake, flood, inundation, cyclone etc
(c) Damage to tyres
(d) Damages to vehicle by accidental external means, fire, lighting, explosion, selfignition,
burglary and housebreaking
(e) Landslide/rockslide while in transit by rail, road, air, inland waterways, lift or
elevator.
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20. Which one of the following is not a basis for premium rating in motor insurance?
(a) Cubic capacity of engine
(b) Insured’s declared value
(c) Driver’s age
(d) Geographical zone
(e) Age of the vehicle.
21. Which of the following is not true with regard to the details that need to be submitted for
the purpose of rating and underwriting of Boiler and Pressure Plant Insurance Policy?
(a) Description, maker’s name, capacity and year of manufacture
(b) Type of the boiler
(c) Working pressure and the minimum load on safety valve
(d) Inspection report conducted by professional surveyors
(e) Details of people who operate the boilers.
22. The farmers should follow certain procedures to ensure smooth processing of the claim
settlement. Which of the following procedures is false?
(a) Adequate records should be maintained by the farmer regarding the production of
crops
(b) The farmer should have a clear idea about his policy and should clarify his doubts
with his agent
(c) The samples of the crops should be available with the farmer, if possible
(d) The grains from different units can be mixed freely
(e) Avoid making false claims as it is a criminal offense.
23. The concept of orphan claim exists in
(a) Aviation insurance
(b) Marine insurance
(c) Burglary insurance
(d) Motor insurance
(e) Fire insurance.
24. Which of the following is not true about Marine Cargo Policy?
(a) The policy is issued covering individual shipments from a named starting point to a
named final destination point
(b) The policy document must be stamped as per the Indian Stamp Act
(c) Sum insured is based on unvalued policy
(d) The policy document contains the name of the insurer and a clause binding the
insurer to the performance of contract
(e) The schedule of policy shows the type of cover granted and any special conditions
or warranties.
25. Which of the following implied warranties under marine insurance policy is not true?
(a) There is an implied warranty in every marine policy that the marine adventure
insured is lawful and, in so far as the insured has control will be carried out in a
lawful manner
(b) There is an implied warranty in marine policy as to the nationality of a ship or that
the nationality of a ship will not be changed during the risk period
(c) Warranty of neutrality
(d) Warranty of seaworthiness of ship in voyage policy and warranty of fitness for each
stage of voyage
(e) Warranty of fitness against perils of the port.
26. A doctor, during the course of treating a patient caused death because of his carelessness.
This liability is covered under which policy?
(a) Directors and Officers Liability
(b) Professional Indemnity Insurance policy
(c) Golfers and Sportsmen policy
(d) Product Liability policy
(e) Personal Accident policy.
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27. Which of the following data mining techniques used by the insurers is not true?
(a) Forecasting frauds in claims
(b) Customer life cycle analysis
(c) Profile customer base
(d) Buying patterns
(e) Enhance overall productivity.
28. Generally the services value chain comprises of the following stages. Which of the
following is not a stage?
(a) Developing the opportunity
(b) Defining the solution
(c) Service delivery
(d) Administration
(e) Market research.
29. Which one of the following is not the duty of an insurance agent towards his customers?
(a) Choose a suitable policy
(b) Fill up the proposal papers
(c) Submission of proposal papers in the office and delivery of policy document to the
policyholder
(d) Collection of premiums from the policyholder as and when they fall due
(e) Look after the formalities of claims settlement.
30. Which one of the following is not a reason for purchasing reinsurance?
(a) Limiting liability on specific risks
(b) Stabilizing loss experience
(c) To earn more ceding commission and profit commission
(d) Increasing capacity
(e) Protection against catastrophes.
Section B : Problems/Caselets (50 Marks)
A warranty is defined as an “undertaking by the insured that a certain state of affairs
will, or will not, continue, or that something shall, or shall not be done, throughout
the duration of the contract”. For example, in fire insurance there will be a warranty
on a policy to the effect that no liquids with flash point below a specific level are
stored. This
ensures that extremely hazardous inflammable liquids are not kept and
so this warranty obviously maintains a reduced fire risk.
a. In what way the warranties in fire insurance differ from the concept applicable
in the law of contract? ( 5 marks)
1.
b. Explain the features of warranties in fire insurance. ( 7 marks)
2. The tariff advisory committee has laid down rules, regulations, rates, terms and
conditions, for transaction of fire insurance business in India, in accordance with the
provisions of the Insurance Act, 1938, as amended. The tariff is effective from 1st
January, 2000. The tariff is binding on all industries and any breach of tariff shall be
seriously dealt with as per relevant provisions of the Insurance Act, 1938, as
amended. Based on these regulations explain the following issues:
a. Coverage and benefits of the fire insurance policy. ( 6 marks)
b. General rules and regulations of the fire insurance policy. ( 7 marks)
Over the past few years there has been a steady rise in the number of insurance
claims made. Managing each claim based on its own merits is vital to ensure that
claims are handled quickly and efficiently. The procedures that must be followed
when handling a claim are generally strict, so workflow automation is vital to ensure
that the claim is processed correctly. Developing a solution from scratch to support
this specific requirement is expensive and complex.
Especially in health insurance, rampant malpractices are bleeding public sector
insurance companies and they need to restructure their activities so as to bring about
change in the sector. The claims ratio in the health insurance is as high as 150
percent and rampant malpractices are bleeding public sector health insurance
companies and added to that the structural inefficiencies are hampering development
of the sector.
Nowhere is the mantra of customer-centricity, cost-control, and competitiveness
more prevalent than in the property and casualty (P&C) sector. With the cost of
claims contributing up to 80 percent of the total costs of P&C insurers, improved
management of claims processing and expenses is a strategic focus for these
enterprises.
Equally important is the role claims processing plays in customer satisfaction,
renewal, and retention. Claims processing and handling have always represented the
key touch-point where customers are most likely to be retained or lost depending
upon the quality of customer service rendered – whether by the insurer or third-party
service provider. This translates into a dual challenge to reduce loss expenses while
at the same time improving customer satisfaction. Now the expectations of
consumers of claims services, which include both claimants and business partners,
have changed dramatically. This is due in part to exposure to new business models
featuring premium claims service as well as exposure to service events across other
industries.
“Rampant malpractices are bleeding public sector insurance companies.” What are
the ethical aspects of claims management? What are the procedures followed by the
insurance companies in close proximate claims cases? ( 10marks)
Read the caselet carefully and answer the following question:
4. After analyzing the liability insurance concepts, determine whether the farm owner
is justified in claiming compensation for the loss of income due to crop failure. ( 5 marks)
Raja Reddy, a farm owner holds 30 acres of land at Patancheru, an industrial area in
Hyderabad. The main cultivation was paddy for which there was separate irrigation
facility. A fertilizer factory is situated adjacent to the land. The waste products from
the factory flow to the nearby lake through a cement pipe. The pipe runs through the
land owned by Raja Reddy. The waste products are originally the chemicals used for
the manufacturing process and are poisonous. The farm owner identified that the
cement pipe used by the factory for carrying the waste products has cracked and as a
result the waste products are accumulated in his land resulting in poor yield from his
land in that year.
Read the caselet carefully and answer the following question:
5. Comment whether the engineering group is able to get indemnity from the insurance
company. ( 5 marks)
The Metro Engineering Pvt. Ltd., has forayed into the manufacturing of engineering
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equipment which cater to the construction industry. It imports certain materials used
for the manufacturing purpose from Brazil. The shipment of the materials, from
Brazil to Chennai, is usually made through Marine Shippers, a renowned marine
transport company As the imported material is costlier, the group decided to buy a
marine insurance policy to protect the company from any loss of material during
shipment. The policy subscribed covers maritime perils, and was issued by the
insurance company. During one such shipment, it was found at the Chennai port that
a substantial part of the material was damaged. The materials were identified as not
useful for the production purpose. The company preferred a claim from the
insurance company stating that the damage was due to rough weather. The company
lacked enough evidence to prove the same.
Read the caselet carefully and answer the following question:
6. Considering the concepts learned in workmen’s compensation insurance, ascertain
whether Naganna will receive compensation from his employer. ( 5 marks)
Naganna is a daily laborer working in the production department of a factory which
manufactures automobile springs. He is the sole earning member of his family. The
workers come in shifts and thus the production process goes on throughout the day.
Once, when he was on leave, he was helping his friend who is in another
department. An accident occurred there and fractured his both arms. He was not able
to work any more in the factory. Naganna claimed compensation as the accident
occurred with in the factory even though he was not performing his duty. He argued
that the employer is responsible to compensate him.
Section C : Applied Theory (20 Marks)
• This section consists of questions with serial number 7 - 8.
• Answer all questions.
• Marks are indicated against each question.
• Do not spend more than 25 -30 minutes on Section C.
7. What legal aspects should be looked into by the claims management (manager)? ( 10 marks)
8. New product development is one of the important and riskiest techniques for the
corporate success. It drives the market shares and revenue profits, and also share
prices. With the increasing customer focus, it is necessary for the insurer to
design and offer new products that will suit the needs of the customer. In this
context, explain the following:
a. Key steps involved in the product development process. ( 5 Marks)
b. The role of market research in the product development process. ( 5 Marks)
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