Insurance & FM Awareness Quiz For LIC AAO Mains 2023-10th March

Q1. Dishonesty or character defects that increase the chance of loss is called?
(a) Moral Hazard
(b) Morale Hazard
(c) P&C
(d) Policy
(e) Physical Hazard
Q2. Carelessness or indifference to a loss because of the existence of insurance is called?
(a) Moral Hazard
(b) Morale Hazard
(c) P&C
(d) Policy
(e) Physical Hazard
Q3. A person who receives the payments from an annuity during his or her lifetime is called?
(a) Asset
(b) Liability
(c) Annuitant
(d) Adjuster
(e) Agent
Q4. A temporary insurance contract that provides proof of coverage until a permanent policy is issued is called a?
(a) Temp Float
(b) Floating Policy
(c) Insurance Interim
(d) Binder
(e) Carrier
Q5. A term used to describe avoidance of a contract from its inception or its beginning is called?
(a) a fortiori
(b) a mensa et thoro
(c) a posteriori
(d) Sin qua non
(e) Ab Initio
Q6. A system of deciding legal disputes between an insured and an insurer by use of a private tribunal outside of the court system.
(a) Arbitration
(b) Disagreement
(c) Animosity
(d) Judgment in rem
(e) Judgment in personam
Q7. The legal rule by which the words of an author are to be construed against the author is called?
(a) Insurable Interest Rule
(b) Contra Proferentum Rule
(c) Proximate Cause Rule
(d) Indemnity Rule
(e) Loss Minimization Rule
Q8. Which of the following wouldn’t come under Act of God?
(a) Earthquakes
(b) Tsunamis
(c) Road Rage
(d) Hurricanes
(e) Storms
Q9. An insurer who transfers all or part of a risk to a reinsurer is called?
(a) Cede
(b) Caveat Emptor
(c) Cession
(d) Cedant
(e) Claimant
Q10. The party asserting a right of recovery under a contract of insurance is called?
(a) Cede
(b) Caveat Emptor
(c) Cession
(d) Cedant
(e) Claimant

Solution

S1. Ans. (A)
Sol. Moral Hazard is dishonesty or character defects that increase the chance of loss.
S2. Ans. (B)
Sol. Morale Hazard is carelessness or indifference to a loss because of the existence of insurance.
S3. Ans. (C)
Sol. Annuitant – A person who receives the payments from an annuity during his or her lifetime.
S4. Ans. (D)
Sol. Binder – A temporary insurance contract that provides proof of coverage until a permanent policy is issued.
S5. Ans. (E)
Sol. Ab initio- A term used to describe avoidance of a contract from its inception or its beginning. The Insurance Contracts Act allows an insurer to avoid policy ab initio in situations where an insured fraudulently nondisclosed or fraudulently misrepresented information when applying for insurance.
S6. Ans. (A)
Sol. Arbitration- A system of deciding legal disputes between an insured and an insurer by use of a private tribunal outside of the court system.
S7. Ans. (B)
Sol. Contra Proferentum Rule – The legal rule by which the words of an author are to be construed against the author. Therefore, any ambiguity in an insurer’s proposal form or policy wording will be construed against the insurer. Note that this rule will only be applied where there is a real ambiguity
S8. Ans. (C)
Sol. Road Rage wouldn’t come in Act of God as it is a voluntary action. Common examples of acts of God include earthquakes, tsunamis, hurricanes, and storms.
S9. Ans. (D)
Sol. Cedant – An insurer who transfers all or part of a risk to a reinsurer.
S10. Ans. (E)
Sol. Claimant – The party asserting a right of recovery under a contract of insurance.