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Insurance Questions Daily-37

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Q-11- The formula for Credibility is

Z= credibility factor

  1. Expected Claim cost=Experienced Claim cost+(1-Z) x similar group’s Claim Cost
  2. Expected Claim cost=Experienced Claim cost-(1+Z) x similar group’s Claim Cost
  3. Expected Claim cost=Experienced Claim cost+(1-Z) / similar group’s Claim Cost
  4. Expected Claim cost=Experienced Claim cost/(1-Z) x similar group’s Claim Cost

Option-1 The formula for credibility is Expected Claim cost=Experienced Claim cost+(1-Z) x similar group’s Claim Cost.

Q-12- Which is the most appropriate reference w.r.t. a ‘Claim’?

  1. a loss/damage occured
  2. a probability of loss/damage occured
  3. an estimation of loss/damage occurred
  4. a demand of loss/damage to recover that loss

Option-4 A Claim is a demand by an individual or toher entity to recover for that loss/damage.

Q-13- What is Loss adjustment expenses(LAE)?

  1. LAE = total profit- actual loss
  2. expenses associated with settling of claim
  3. expenses added to reach a desired loss figure
  4. none of above

Option-2 Loss adjustment expenses(LAE) are expenses associated with settling of claim.

Q-14- Reported losses are

  1. sum of payments – case reserves
  2. sum of payments x case reserves
  3. sum of payments + case reserves
  4. sum of payments / case reserves

Option-3 Reported losses are sum of payments + case reserves.

Q-15- Unreported losses are

  1. case reserve development – unreported occurences/claim reserves
  2. case reserve development + unreported occurences/claim reserves
  3. case reserve development x unreported occurences/claim reserves
  4. case reserve development / unreported occurences or claim reserves

Option-2 Unreported losses are case reserve development + unreported occurences/claim reserves. 

Q-16- Formula for Frequency is

Fk=frequency per k exposure units, k= scale factor, C=claim count, E=exposure units

  1. Fk=kXC/E
  2. Fk=k+C/E
  3. Fk=kC/E
  4. Fk=k-C/E

Option-3 Formula for Frequency is Fk=kC/E.

Q-17- Which of the following is a disadvantage of Free cover limit(FCL) provided under Group insurance?

  1. Saves time
  2. Anti-selection
  3. Cost reduction
  4. Spread of mortality risk

Option-2 The disadvantage of Free cover limit(FCL) provided under Group insurance is Anti-selection.

Q-18- The method of Pension Scheme is

  1. Fully funded pension scheme
  2. Pay as you go pension scheme
  3. both above
  4. none of above

Option-2 Both above are the methods of Pension Schemes.

Q-19- Which of the below section of The Income Tax Act deals with the ‘Charge of Income Tax’?

  1. Section 4
  2. Section 5
  3. Section 10
  4. Section 17

Option-1 Section-4 of the Income Tax Act deals with the ‘Charge of Income Tax’.

Q-20- Which of the following is deal by Section-17 of the Income Tax act.

  1. Salary
  2. perquisite
  3. Profits in lieu of Salary
  4. all above

Option-4 Section-4 of the Income Tax Act deals with all of the above,

These Insurance GK questions are based on Reinsurance and Risk factors in form of Insurance quiz and answers.

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