Risk Management MCQs Quiz Multiple Choice Questions & Answers

1. In ...............or ............... method a fixed share or quota of the risk is reinsured

1. Quota or fixed share treaty
2. excess of loss or quota
3. fixed share or surplus treaty
4. none of above

2. ...............happen when an insurance company has undertaken more risk burden on its shoulders than its bearing capacity. ................... is a device to reduce the risk

1. reinsurance, reinsurance
2. double insurance, reinsurance
3. double insurance , double insurance ,
4. reinsurance, double insurance

3. ...............refers to the cause of loss or the contingency that may cause a loss

1. Risk
2. Peril
3. Danger
4. Hazards

4. When a jewelry store locks its merchandise in a vault at the end of the day, it is practicing

1. risk reduction
2. risk avoidance
3. risk assumption
4. risk shifting

5. Which risk-management technique does self-insurance satisfy?

1. Risk reduction
2. Risk assumption
3. Risk avoidance
4. Shifting risks

6. A broken window pane is evidence of a

1. robbery
2. larceny
3. burglary
4. theft

7. Choosing not to ride in a car is an example of

1. shifting risks
2. risk reduction
3. risk avoidance
4. risk assumption

8. A consumer disputes redressal forum to be known as the ...............to be established by the ...............with the prior approval of the central government in each district of the state

1. state consumer protection , state government
2. District forum, district government
3. central council, local government
4. district forum, state government

9. Insurance that provides protection for a stated period of time is defined as ..................insurance

1. straight life
2. single-payment
3. term
4. limited-payment

10. ...............risk is defined as the relative variation of actual loss from expected loss

1. Subjective risk
2. Pure loss
3. Objective risk
4. Expected risk

11. What type of life insurance policy would you recommend for a young couple, with no children, that would provide the most protection for the smallest premium?

1. Term
2. Single-payment life
3. Whole life
4. Endowment

12. ...............is an essential part of the bailor-baliee relationship

1. The delivery of goods
2. The utmost good faith
3. The duty of full disclosure
4. All of above

13. According to ...............model, an insurance company markets its products almost exclusive through the distribution channel of its banking parents

1. the partnership model
2. the joint venture model
3. the captive model
4. none of above

14. which of the following is the main objective of IRDA

1. To take care of the policy holder interest
2. To open the insurance sector for private sectors
3. to supervise the activities of intermediaries
4. all of above

15. When a firm buys insurance to cover losses caused by riots, the firm is

1. transferring
2. using risk
3. avoiding risk
4. assuming risk

16. A physical hazard is a condition stemming from the material characteristics of an object

1. True Statement
2. False Statement

17. Risk management is synonymous with Insurance mangement

1. True Statement
2. False Statement

18. ACV stands for actual cash value

1. True Statement
2. False Statement

19. The first insurance was established in Anthens

1. True Statement
2. False Statement

20. A risk manager can ignore those pure risk that are not insurable

1. True Statement
2. False Statement

21. There is no hazards of direct competition to conventional banking products

1. True Statement
2. False Statement

22. Without the payment of premium, the insurance contract cannot start

1. True Statement
2. False Statement

23. To be insurable, a risk must have potential losses that are

1. under the control of the insured
2. centrally located
3. predictable
4. unmeasurable

24. Risks that insurance firms will not assume are called

1. uninsurable risks
2. insurable risks
3. endorsements
4. pure risks

25. Which of the following is not a condition for an insurable loss?

1. Using accurate and effective accounting and financial controls to protect the firms inventories and cash from pilfering
2. Establishing a self-insurance health program that covers all employees
3. Installing burglar alarms, security guards, and even guard dogs to protect warehouses from burglary
4. Purchasing and using safety equipment, from hand guards on machinery to goggles and safety shoes for individuals

26. A type of insurance that combines protection with an investment plan is called

1. whole life
2. endowment
3. limited-pay
4. universal

27. The general insurance corporation is holding company, which has ...............subsidiary companies

1. 10
2. 12
3. 4
4. 6

28. LIC (Mauritius) ltd. Was set in ...............

1. 1990
2. 2001
3. 2009
4. 1998

29. The idea of insurance ombudsman was mooted in the year

1. 1998
2. 1938
3. 1986
4. 1990

30. Insurance Ombudsman is open to all individuals whose claim amount is less than

1. 1 Crore
2. 20 crores
3. 20 lakhs
4. 10 lakhs

31. 1) Active risk retention means that the firm is aware of the loss exposure and plans to retain a part or all of it. 2) Passive retention however is the failure to identify a loss exposure, failure to act. Which of the above statement is not correct.

1. 1,2
2. only 2
3. only 1
4. none of the above

32. Which of the following are the principles of Risk Manangement. 1. Principle of risk identification 2. Principle of risk ananlysis 3. Principle of Risk assessment 4. Principle of Risk Control.

1. 1,2,3
2. 1,4
3. 1,3,4
4. 1,2,3,4

33. Which type of insurance policy will protect a business from theft and forgery by its employees?

1. a fidelity bond
2. burglary insurance
3. robbery insurance
4. indemnity insurance

34. A method for reducing the cost of health care by offering the services of doctors and hospitals at discount rates or giving breaks in co-payments and deductibles is offered by

1. a health maintenance organization
2. a major medical plan
3. Medicare
4. a preferred provider organization

35. Higher the percentage of ...............in GDP , lower the insurance penetration

1. agriculture
2. insurance
3. banking
4. all of above

36. ...............contract means that only one party makes a legally enforceable promise

1. aleatory contract
2. unilateral
3. conditional
4. personal

37. Purchasing insurance is a technique used to

1. assume risk
2. shift risk
3. reduce risk
4. avoid risk

38. Dr. Robins chose to stop practicing when malpractice insurance premiums became too high for him to afford. He is managing risk by .................. risk

1. assuming
2. reducing
3. avoiding
4. transferring

39. Collision insurance is a type of

1. automobile physical damage insurance
2. bodily injury liability coverage
3. property damage liability coverage
4. comprehensive insurance

40. Bailment is an agreement between a person ...............who owns or lawfully possesses goods and another person ,............... who is given possession of the goods for a specific purpose

1. baliee, bailor
2. endorser, endorsee
3. bailor, bailee
4. none of above

41. Upon the death of the insured, who receives the proceeds of the life insurance policy?

1. beneficiaries
2. actuaries
3. policyholders
4. recipients

42. ...............is a memorandum specifying some of the details of the property or liability policy to be issued by the company

1. binder
2. subrogation
3. indemnity
4. endorsement

43. 1) One of the most important reason for considering bancassurance by bank is increased ROA. 2) Insurers operate through bansassurance, own and control relationships with customers.Which of the above two statement is not correct.

1. both 1 & 2
2. only 1
3. only 2
4. none of the above.

44. Unemployment can result from:

1. Business cycle downsizing
2. Seasonal factors
3. Imperfection in Labor market
4. All of the above

45. Most firms shift their risks by

1. buying an insurance policy
2. establishing a self-insurance fund
3. establishing a safety program
4. installing smoke alarms

46. Which of the following is the challenge for bancassurance in India

1. challenge in work culture
2. effective mining of the database
3. threat of cannibalization
4. all of above

47. The consent will be free when it is not caused by

1. coercion
2. undue influence
3. fraud
4. all of above

48. Which type of insurance covers damage or injury caused by a vehicle with no liability insurance coverage?

1. comprehensive insurance
2. uninsured motorists insurance
3. no-fault automobile insurance
4. property damage liability coverage

49. A contract of ............... means the insured must accept the entire contract, with all of its items and conditions

1. conditional
2. adhesion
3. unilateral
4. personal

50. ...............helps lower the cost of insurance as well as increase its availability

1. deductible decisions
2. objective decision
3. selective decisions
4. all of the above