Retentions MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Retentions, a fundamental topic in the field of IC85 Reinsurance Management. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Retentions 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 Retentions mcq questions that explore various aspects of Retentions problems. Each MCQ is crafted to challenge your understanding of Retentions principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC85 Reinsurance Management tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Retentions MCQs are your pathway to success in mastering this essential IC85 Reinsurance Management topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Retentions. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your Retentions knowledge to the test? Let's get started with our carefully curated MCQs!

Retentions MCQs | Page 15 of 24

Discover more Topics under IC85 Reinsurance Management

Q141.
What are the benefits of group underwriting arrangements and pooling arrangements for small and medium-sized companies?

a.

They enable individual freedom for companies

b.

They create technical expertise for special classes of business

c.

They enhance competition for business

d.

They limit retention capacity for insurers

Discuss
Answer: (b).They create technical expertise for special classes of business Explanation:Group underwriting arrangements and pooling arrangements enable small and medium-sized companies to create technical expertise for special classes of business.
Q142.
What is the percentage of the reinsurance premium in life business in India?

a.

Around 0.15% of the total written premium

b.

Around 1% of the total written premium

c.

Around 5% of the total written premium

d.

Around 10% of the total written premium

Discuss
Answer: (a).Around 0.15% of the total written premium Explanation:The reinsurance premium in life business constitutes around 0.15% of the total written premium in India.
Q143.
What is the purpose of Keyman insurance?

a.

To protect business debts of a firm dependent on a key individual

b.

To protect against accumulation losses

c.

To protect against natural disasters

d.

To protect against financial fraud

Discuss
Answer: (a).To protect business debts of a firm dependent on a key individual Explanation:Keyman insurance is used to protect business debts of a firm which is dependent on a key individual for continuing its business.
Q144.
What is accumulation in insurance?

a.

When several people are affected by a loss

b.

When several policies arranged in respect of one and the same individual are affected

c.

When several insurers participate in a reinsurance treaty

d.

Both a and b

Discuss
Answer: (d).Both a and b Explanation:Accumulation in insurance can refer to situations where several people are affected by a loss or where several policies arranged in respect of one and the same individual are affected.
Q145.
Why is accumulation control essential in insurance?

a.

To determine the need for reinsuring

b.

To increase competition among insurers

c.

To limit the retention capacity of insurers

d.

To reduce the spread of the insurer's net account

Discuss
Answer: (a).To determine the need for reinsuring Explanation:Accumulation control is essential in insurance to determine the need for reinsuring.
Q146.
ABC Company is seeking insurance for its tanker, an ocean going vessel. ABC Company will have to seek insurance under ___________

a.

Property insurance

b.

Marine hull insurance

c.

Marine cargo insurance

d.

Life insurance

Discuss
Answer: (b).Marine hull insurance Explanation:Marine hull insurance falls into two broad categories: ocean-going vessels and local crafts. The tanker mentioned in the question is an ocean-going vessel, so it would fall under the category of marine hull insurance. Therefore, option b is the correct answer. Options a, c and d are not relevant to the question as they refer to different types of insurance.
Q147.
What is the primary objective of quota-share and surplus treaties in fire reinsurance?

a.

To protect net retained business by appropriate working and catastrophe excess of loss covers

b.

To provide an effective means for stabilization of results for the portfolio

c.

To iron out the variation in results that occur from year to year

d.

To make a larger recovery from reinsurers in a year of higher than average fire losses in large risks

Discuss
Answer: (b).To provide an effective means for stabilization of results for the portfolio Explanation:The primary objective of quota-share and surplus treaties in fire reinsurance is to provide an effective means for stabilization of results for the portfolio. These treaties help in ironing out the variation in results that occur from year to year. In addition, the ceding reinsurance commission received on proportional treaties adds to the net results of the ceding insurer.
Q148.
What is covered under property reinsurance contracts?

a.

Financial consequences arising from physical loss or damage to real and personal property

b.

Personal injury arising from physical loss or damage to real and personal property

c.

Loss of business profits arising from physical loss or damage to real and personal property

d.

None of the above

Discuss
Answer: (a).Financial consequences arising from physical loss or damage to real and personal property Explanation:Property reinsurance contracts mainly deal with many different classes of original insurance business. They cover physical loss or damage to real and personal property and the financial consequences arising as a result of such loss or damage, as covered in the original policy.
Q149.
Which of the following is a class of property insurance?

a.

Life insurance

b.

Marine hull insurance

c.

Industrial All Risks insurance

d.

Health insurance

Discuss
Answer: (c).Industrial All Risks insurance Explanation:Industrial All Risks insurance is a class of property insurance. Other classes of property insurance include standard fire & special perils insurance, engineering insurance, machinery breakdown insurance, boiler explosion insurance, machinery loss of profits insurance, construction plant/machinery insurance, computers/electronic equipments insurance, theft & burglary insurance, and property all risks packages for high value/high exposure mega risks.
Q150.
Which type of treaty programme is well suited for fire insurance business?

a.

Excess of loss treaties

b.

Proportional treaties

c.

Quota-share treaties

d.

Surplus treaties

Discuss
Answer: (b).Proportional treaties Explanation:In view of a large number of risks usually involved in fire insurance business, it is well suited for protection by a proportional treaty programme. The primary objective of quota-share and surplus treaties is to iron out the variation in results that occur from year to year. Excess of loss treaties protect the net retained business by appropriate working and catastrophe excess of loss covers.
Page 15 of 24