Exam (elaborations)
ISR3701 TEST BANK 2024/2025
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ISR3701 TEST BANK 2024/2025 QUESTIONS WITH RESPECTIVE ANSWERS.
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lOMoAR cPSD| 48047628, lOMoAR cPSD| 48047628
Q1
A strike in the mining industry in South Africa is a typical example of a _________ risk.
a. dynamic
b.
particular
c. speculat
ive
d.
fundamental
Q2
In an insurance policy, the cancellation clause will be reflected under the __________.
a.
operative clause
c.
general exemptions
d. recital
clause
Q3
An organisational chart may assist the risk manager in identifying __________.
b.
possible bottlenecks in the production process
c.
supplier risks
d. process type risks
, lOMoAR cPSD| 48047628
Q4
Lloyd’s ___________.
a) has underwritten the voice of Bruce Springsteen
b) is not an insurance company
c) operates worldwide
d) invented the term underwriting Choose the correct combination:
b.
a) b) c
c.
a) c
d.
a) c) d
Q5
Examples of post-loss minimisation of losses include:
a) Hiring of security guards to protect premises after a fire.
b) Training in the use of dangerous substances.
c) Activation of sprinkler systems with the outbreak of a fire.
d) Fire drills.
Choose the correct combination:
a.
a) b) c
b.
a) c
c.
b) c) d
d.
a) b) c) d
, lOMoAR cPSD| 48047628
Q6
Self-insurance may result in _________. a) lower
investment income.
b) lower premiums.
c) less focused risk control programmes.
d) a smaller statistical base for premium calculations.Choose the correct combination:
a.
b) c) d
b.
a) b) c) d
c.
b) d
d.
a) b) c
Q7
Indicate the correct statement:
b.
Insurable interest is not a requirement for taking out a life insurance policy on another person’s life.
c.
Insurable interest enforces the principle of indemnity.
d.
The principle of indemnity applies to all insurance contracts.
Q8
An underwriter is requested to underwrite a tyre manufacturing plant. The sums insured are: Fire R50 000 000
Loss of profit R30 000 000.
The underwriter has a net line of R2 000 000 and can take an additional 50% if the risk involves Fire and Loss of
profit. The underwriter has a nine-line surplus treaty. Under the above scenario _________.
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