Advanced Wealth Management Course (IIBF) - Paper 4
Part I: Ch 8: The Theory and Practice of Rating
Q1.
Effective 22/07/1998 the TAC Board had been reconstituted with ________ members representing the general insurance industry and ________ members from Government and industry.
Q2.
(I) A loading element that is paid to cover the cost of claims incurred. (II) A pure premium that is added to cover expenses and a provision for profits of the insurer.
Q3.
(I) Premium adequacy means that the premium should be enough to pay the claims and meet other costs. (II) Deductibles which makes insurance affordable.
Q4.
In a re-insurance contract the insurer pays a premium to the re-insurer for agreeing to pick up the whole or part of the insurer’s risk.
Q5.
(I) The TAC regulates the rates, advantages, terms and conditions offered by the insurers. (II) The principle of loading arises from the principle of equitable premium.
Q6.
(I) Deductibles implies that the insurance buyer would agree to share a part of the risk in exchange for a reduction in the premium. (II) Equity means that the contribution of each insured should be as far as possible in accordance with expected claim costs of his risk.