Types of Insurance Products Group MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Types of Insurance Products Group, a fundamental topic in the field of IC 92 Actuarial Aspects of Product Development. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Types of Insurance Products Group MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of Types of Insurance Products Group mcq questions that explore various aspects of Types of Insurance Products Group problems. Each MCQ is crafted to challenge your understanding of Types of Insurance Products Group principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 92 Actuarial Aspects of Product Development tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Types of Insurance Products Group MCQs are your pathway to success in mastering this essential IC 92 Actuarial Aspects of Product Development topic.

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Types of Insurance Products Group MCQs | Page 11 of 13

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Q101.
How often is profit sharing allowed according to IRDA guidelines?

a.

Quarterly

b.

Annually

c.

Biannually

d.

Irregularly

Discuss
Answer: (b).Annually Explanation:Profit sharing is allowed on a scheme year basis, according to the guidelines set by IRDA of India.
Q102.
What is the maximum percentage of profit sharing allowed if the number of life years for a scheme is less than one lac?

a.

50%

b.

75%

c.

80%

d.

90%

Discuss
Answer: (b).75% Explanation:If the number of life years for a scheme is less than one lac, the maximum percentage of profit sharing allowed is 75%, as per the guidelines issued by IRDA of India.
Q103.
What mortality assumption is specified by IRDA guidelines for profit sharing purposes?

a.

At least 50% of the rates under the standard mortality table

b.

At least 60% of the rates under the standard mortality table

c.

At least 70% of the rates under the standard mortality table

d.

At least 80% of the rates under the standard mortality table

Discuss
Answer: (b).At least 60% of the rates under the standard mortality table Explanation:For profit sharing purposes, the mortality assumption specified by IRDA guidelines should not be lighter than 60% of the rates under the standard mortality table prescribed for the pricing assumptions.
Q104.
When should the experience rating profit sharing formula and related assumptions be furnished according to IRDA guidelines?

a.

At the end of the scheme year

b.

During the profit sharing meeting

c.

At the time of filing the product with the authority

d.

When requested by the insured group

Discuss
Answer: (c).At the time of filing the product with the authority Explanation:The experience rating profit sharing formula and related assumptions should be furnished at the time of filing the product with the authority, as per the guidelines issued by IRDA of India.
Q105.
What is the primary reason for offering prospective experience rating in group insurance?

a.

To minimize insurer profitability

b.

To encourage group loyalty to the insurer

c.

To quote a more accurate insurance premium for the group

d.

To provide investment opportunities to policyholders

Discuss
Answer: (c).To quote a more accurate insurance premium for the group Explanation:The primary reason for offering prospective experience rating in group insurance is to quote a more accurate insurance premium for the group, ensuring that the premium reflects the group's past experience to the extent it is credible.
Q106.
What disadvantage might an insurer face if it fails to incorporate a group's positive past experience into its premium?

a.

Losing a disproportionate number of poorer-risk groups

b.

Facing a portfolio consisting of worse risks

c.

Attracting groups with favorable past experience

d.

Offering inaccurate premium quotes

Discuss
Answer: (b).Facing a portfolio consisting of worse risks Explanation:If an insurer fails to incorporate a group's positive past experience into its premium, the insurer may find that its portfolio of groups consists of worse risks than can be supported by its premium rates.
Q107.
Why is it important for insurers to correctly assess the extent to which a group's past experience should be reflected in the premium?

a.

To maximize insurer profits

b.

To minimize group losses

c.

To maintain competitiveness and accuracy in premium pricing

d.

To comply with regulatory guidelines

Discuss
Answer: (c).To maintain competitiveness and accuracy in premium pricing Explanation:It is important for insurers to correctly assess the extent to which a group's past experience should be reflected in the premium in order to maintain competitiveness and accuracy in premium pricing, ensuring that premiums are both competitive and accurately reflect the risks associated with the group.
Q108.
Why might the assumption of independence of claims be less valid for group insurance compared to individual life insurance?

a.

Due to the lack of morbidity experience in group insurance

b.

Because group members may face common hazards specific to the group

c.

Because group insurance typically covers fewer individuals than individual life insurance

d.

Due to the lack of mortality experience in group insurance

Discuss
Answer: (b).Because group members may face common hazards specific to the group Explanation:The assumption of independence of claims might be less valid for group insurance compared to individual life insurance because group members may face common hazards specific to the group, such as poor workplace safety or strenuous job conditions, leading to correlated claims within the group.
Q109.
What factor should be considered when calculating exposures for group insurance?

a.

Year-end number of employees

b.

Mid-year number of employees

c.

End-of-year number of employees

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:When calculating exposures for group insurance, factors such as year-start, mid-year, or end-of-year number of employees should be considered to ensure accurate assessment of claims rates and premium pricing, as the group's size may vary throughout the year.
Q110.
Why is it important to establish the validity of past claims experience in group insurance?

a.

To determine the profitability of the insurer

b.

To assess the credibility of the group's own experience

c.

To calculate the expected claim cost accurately

d.

To adjust premiums based on similar groups' claim costs

Discuss
Answer: (b).To assess the credibility of the group's own experience Explanation:It is important to establish the validity of past claims experience in group insurance to assess the credibility of the group's own experience, which influences the adjustment of file and use rates for similar groups.
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