1. Sample GEN 1A Questions

2. Insurance operates by paying the claims of the few from the premiums of many. This is known as : This is known as : A actuarial rating A actuarial rating B indemnity B indemnity C pooling of risk C pooling of risk D underwriting Sample Question

3. Answer Insurance operates by paying the claims of the few from the premiums of many. This is known as : This is known as : A actuarial rating A actuarial rating B indemnity C pooling of risk C pooling of risk D underwriting ANSWER : C

4. Sample Question An insurer is able manage high severity, low frequency risk in its property account by implementing a programme of : A loss prevention A loss prevention B loss reduction B loss reduction C risk retention C risk retention D risk transfer

5. Answer An insurer is able manage high severity, low frequency risk in its property account by implementing a programme of : A loss prevention A loss prevention B loss reduction B loss reduction C risk retention C risk retention D risk transfer ANSWER :D

6. Sample Question How does the provision of insurance help the cash flow of a business ? How does the provision of insurance help the cash flow of a business ? A It lessens the need for the business to keep cash reserves A It lessens the need for the business to keep cash reserves B It prevents losses occurring which could interrupt the business operation operation C It provides for the payment of cash if the business makes a trading loss trading loss D It underwrites the debts owed by the business

7. Answer How does the provision of insurance help the cash flow of a business ? How does the provision of insurance help the cash flow of a business ? A It lessens the need for the business to keep cash reserves A It lessens the need for the business to keep cash reserves B It prevents losses occurring which could interrupt the business operation operation C It provides for the payment of cash if the business makes a trading loss trading loss D It underwrites the debts owed by the business ANSWER:A

8. Sample Question When the insured has effected two policies which cover the same risk, this is known as : A co-insurance A co-insurance B dual insurance B dual insurance C mutual insurance C mutual insurance D reinsurance

9. Answer When the insured has effected two policies which cover the same risk, this is known as : A co-insurance A co-insurance B dual insurance B dual insurance C mutual insurance C mutual insurance D reinsurance ANSWER :B

10. Sample Question Which type of insurance policy is designed with the specific knowledge that a valid claim will occur ? A Comprehensive motor insurance A Comprehensive motor insurance B Household buildings insurance B Household buildings insurance C Professional indemnity insurance C Professional indemnity insurance D Whole of life insurance

11. Answer Which type of insurance policy is designed with the specific knowledge that a valid claim will occur ? A Comprehensive motor insurance A Comprehensive motor insurance B Household buildings insurance B Household buildings insurance C Professional indemnity insurance C Professional indemnity insurance D Whole of life insurance ANSWER :D

12. Sample Question A direct insurance company transacts business through their contact with : A Insurance brokers A Insurance brokers B Private individuals B Private individuals C Shareholders C Shareholders D Tied agents

13. Answer A direct insurance company transacts business through their contact with : A Insurance brokers A Insurance brokers B Private individuals B Private individuals C Shareholders C Shareholders D Tied agents ANSWER:B

14. Sample Question Insurance may only be places at Lloyd’s via a Lloyd’s : A Agent A Agent B Broker B Broker C Name C Name D Syndicate

15. Answer Insurance may only be places at Lloyd’s via a Lloyd’s : A Agent A Agent B Broker B Broker C Name C Name D Syndicate ANSWER:B

16. Sample Question A reinsurance company will cover risks : A already insured by insurance companies A already insured by insurance companies B directly from individuals B directly from individuals C from individuals via a broker C from individuals via a broker D on a co-insurance basis with an insurer

17. Answer A reinsurance company will cover risks : A already insured by insurance companies A already insured by insurance companies B directly from individuals B directly from individuals C from individuals via a broker C from individuals via a broker D on a co-insurance basis with an insurer ANSWER:A

18. Sample Question Who has the responsibility for providing advice to customers concerning loss control and loss prevention ? A An actuary A An actuary B A reinsurer B A reinsurer C A risk manager C A risk manager D An underwriter

19. Answer Who has the responsibility for providing advice to customers concerning loss control and loss prevention ? A An actuary A An actuary B A reinsurer B A reinsurer C A risk manager C A risk manager D An underwriter ANSWER:C

20. Sample Question Why is the principle of utmost good faith applied to insurance contracts ? A The proposer has more knowledge of the risk than the underwriter A The proposer has more knowledge of the risk than the underwriter B The underwriter has more knowledge of the risk than the proposer B The underwriter has more knowledge of the risk than the proposer C The proposer and the underwriter have equal knowledge of the risk C The proposer and the underwriter have equal knowledge of the risk D The proposer and the underwriter need to increase their knowledge of the risk the risk

21. Answer Why is the principle of utmost good faith applied to insurance contracts ? A The proposer has more knowledge of the risk than the underwriter A The proposer has more knowledge of the risk than the underwriter B The underwriter has more knowledge of the risk than the proposer B The underwriter has more knowledge of the risk than the proposer C The proposer and the underwriter have equal knowledge of the risk C The proposer and the underwriter have equal knowledge of the risk D The proposer and the underwriter need to increase their knowledge of the risk the risk ANSWER:A