pce set b

PCE PART (A&C)

Center for Learning Excellence – AT&D Dept 1

PCE A & CSET B

ENGLISH

AGENCY TRAINING & DEVELOPMENT DEPT.AIA CO. LTD

PCE PART (A&C)


PART A : The basic of insurance

1. An arrangement whereby individual losses are shared by members of a group facingsimilar risk exposure is called ________________.

A. Risk B. ContractC. Insurance D. Investment

2. Which of the following regarding insurance is wrong?

A. It is an economic institution.B. It is based on the principle of profit acquisitionC. Its objective is to accumulate funds to pay for claims.D. Only certain risks can be insured against.

3. Which of the following is NOT covered by General Insurance?

A. The value of life B. Motor VehiclesC. Marine and aviation D. Products or goods sold

4. The earliest beginning of insurance were in the field of _________.

A. Motor Insurance B. Life InsuranceC. Fire Insurance D. Marine Insurance

5. The insurance industry in Malaysia had been largely patterned on the ________system.

A. American B. BritishC. Indian D. Holland

6. In order to standardize and control the insurance business in Malaysia, the firstInsurance Act was introduced in ____________.

A. 1996 B.1957C. 1963 D.1972

7. Which of the following is not a method of handling risk?

A. Prevention B. RetentionC. Control D. Elimination

PCE PART (A&C)


8. ____________ refers to an area of study which measures the chance of occurrence ofa particular event.

A. Possibility B. ProbabilityC. Uncertainty D. Prediction

9. Empirical Probability is determined on the basis of ____________.

A. government date B. total number of possible eventC. historical data D. judgement of a person

10. The risk that affects the entire economy or large number of people / groups within theeconomy is called ______________.

A. Fundamental Risk B. Particular RiskC. Speculative Risk D. Major Risk

11. The situation where there is the possibility of profit, loss or no loss is _____________.

A. Pure Risk B. Speculative RiskC. Particular Risk D. Fundamental Risk

12. Loss Control measures handle risks by :

I. Loss PreventionII. Loss MinimisationIII. Loss PredictionIV. Loss Avoidance

A. I & II B. II & IIIC. I & IV D. III & IV

13. The systematic approach to dealing with risks that threaten assets and earnings of abusiness or enterprise is called ________________.

A. Risk Management B. Risk ConservationC. Risk Diversion D. Risk Avoidance

PCE PART (A&C)


14. The following arrangement of Risk Management is wrong, kindly rearrange themaccording to sequence.

I. evaluating potential lossesII. implementing the risk management programIII. selecting techniques of risk handlingIV. identifying loss exposures

A. I, III, II, IV B. IV, II, III, IC. IV, I, III, II D. III, II, I, IV

15. Which of the following is NOT the characteristics of insurable risk?

A. Involved losses with financial value.B. They must be a large number of similar risks.C. Concerned with speculative risk only.D. Must have insurable interest.

16. When a loss is one that is accidental and unintentional, it is ___________________.

A. Forfuitous losses B. Catastrophic lossesC. Containable losses D. Unintentional losses

17. There must be a large number of similar risk before any one of the risks is capable ofbeing insured, the reasons are :

I. To enable the insurer to predict losses more accurately.II. If there are only few risks, the principle of losses of a few to be borned by many cannot be applied.III. The insurance company can charge higher premium.IV. To enable the insurer to calculate a loading.

A. I, II & IV B. I & IIIC. II, III & IV D. I & II

18. ________________________ is to advise the takaful company on its operations inorder to ensure that it does not involve in any element which is not approved by theSyariah.

A. Takaful Supervisory CouncilB. Takaful Act 1984C. Syariah CouncilD. Syariah Supervisory Council

PCE PART (A&C)


19. The principle of subrogation arises out of the principle of ____________________.

A. Insurable InterestB. IndemnityC. Utmost Good FaithD. Assignment

20. What is the proximate cause?

A. least dominant cause attributed as the cause of loss.B. the most dominant cause attributed as the cause of loss.C. is not a cause for claims.D. not a cause for liability of the insurer.

21. Which of the following is NOT the special legal principles embodied in insurancecontract?

A. Insurable interestB. ContributionC. ClaimD. Indemnity

22. What is assignment?

A. is a transfer of rights or privilege of a property to another.B. is a transfer of rights and liabilities by one person to another.C. is a transfer of risk to another person.D. all of the above.

23. Utmost Good Faith is breached when the proposer who knows or is reasonablyexpected to know the material fact is ______________________.

I. Fails to discloseII. Been misrepresentsIII. Been disclose fully and accuratelyIV. Been loss by the company

A. I & II B. I & IIIC. I, II & III D. II & IV

24. Which of the following is NOT a payment method of indemnity?

A. Cash B. RepairC. Loss Retention D. Reinstatement

PCE PART (A&C)


25. “Mudharabah” is defined as a contractual agreement between _______________.

I. InvestorII. TrusteeIII. EntrepreneurIV. Capital Provider

A. I & II B. II & IIIC. III & IV D. I, III & IV

26. The most accurate defination for “Tabaruk” is _________________.

A. To withdrawB. To donateC. To transferD. To contribute

27. In which part of The Takaful Act 1984 discuss about mode and conduct of Takafulbusiness such as restriction, operations, establishment and maintenance of Takafulfund and allocation surplus.

A. Part IB. Part IIC. Part IIID. Part IV

28. Perils which have been expressly excluded from the policy called _____________.

A. Unknown PerilsB. Excluded PerilsC. Insured PerilsD. Uninsured Perils

29. The principle requires the insurers to restore the insured to the same financial positionas he/she had enjoyed immediately before the loss called _______________________.

A. IndemnityB. Utmost Good FaithC. ContributionD. Subrogation

PCE PART (A&C)


30. Perils which is not mentioned in the policy and therefore not covered by the policyunless they occur as a result of an insured perils are known as ___________________.

A. Unknown PerilsB. Insured PerilsC. Excluded PerilsD. Uninsured Perils

31. When an insurance company organizes its department on a functional basis, the basicfunction and decision making tend to be centralized at the head office. What is thedisadvantage of centralization?

A. Faster in making quotation.B. Prompt service to the public.C. Delay in making quotation.D. Delay in prospecting.

32. Which of the following are the main components of insurance market?

I. BuyersII. SellersIII. BankersIV. Service Specialist

A. I & II B. I, II & IVC. I, II & III D. III & IV

33. The department involved in setting the selection criteria, selects the risk and determinethe premium, term and conditions of new business and renewal.

A. Audit DepartmentB. Underwriting DepartmentC. Policy Service DepartmentD. Actuarial Department

34. When action of insurance company is centralized, all the process are concentrated atthe ____________________.

A. branch officeB. head officeC. agents officeD. brokers office

PCE PART (A&C)


35. Which of the following is NOT the main objectives of the Malaysian InsuranceInstitute (MII)?

A. To provide and maintain central organization for promotion of efficiency, progress and general development among persons engaged in the insurance industry.B. To establish a library for the purpose of the institute.C. To under take research in field of insurance and other related subjects.D. To promote and represent the interests of the members companies and the life insurance industry.

36. What do u understand about insurance company in centralized?

A. All policy drafting, renewals and claims are handled by Director of Agency.B. All policy drafting, renewals and claims are handled by Director of Company.C. All policy drafting, renewals and claims are handled at Headquarters.D. There is no branches.

37. The surplus of a mutual insurance company are shared among __________ and theprofits made by the operations of the proprietary company are distributed among its____________.

A. Shareholders, policyholdersB. Policyholders, shareholdersC. Contract holders, shareholdersD. Policyholders, brokers

38. This party normally acts on behalf of the insured and normally not tied to any oneinsurer.

A. Universal AgentB. Insurance DealersC. Special AgentD. Insurance Broker

39. A cooperative society transacting insurance business may be termed as a __________.

A. Multi-Level InsurersB. International InsurerC. Mutual InsurerD. Universal Insurer

PCE PART (A&C)


40. Life Insurance Association of Malaysia (LIAM) was established in _______________.

A. 1981B. 1972C. 1963D. 1974

41. Which of the folllowing association paid compensation or allowance to victims ofmotor accidents where the ‘uninsured drivers’ are unable to meet their liability fromtheir own personal resources.

A. PIAMB. MIIC. MIBD. None of the above.

42. Insurers will share the burden of paying claims particularly those involving largeamount with _____________________.

A. LIAMB. AgentsC. PIAMD. Reinsurers

43. LIAM is the _______________________________________________.

A. representative body of life insurersB. representative body of life insurance agentsC. representative body of general insurance agentsD. representative body of brokers

44. The Code of Ethics was established by ___________________________________.

A. Insurance Act 1996B. PIAMC. LIAMD. ASM

45. Objective of self-regulation by the insurance industry are as follow, EXCEPT :

A. Provide some element of protection to insurance consumers.B. Instil discipline in the insurance industry.C. Promote healthy competition.D. Provide the larger market for insurers.

PCE PART (A&C)


46. The objective of the Insurance Mediation Bureau is to provide dispute resolutionprocedures for policyholder and _____________________.

A. InsurersB. AgentsC. BrokersD. Reinsurers

47. The Director General of Insurance (DGI) is empowered to supervise insurancecompanies and other things such as the following actions, EXCEPT :

A. Inspect books and other documents of the insurer.B. Investigate into the business of the insurer.C. Issue directions regarding the conduct of the insurer’s business.D. Control over the property, management, employees of the insurer.

48. In some instances, the insurer may not accept a proposal on its original terms but mayoffer to provide insurance on different terms. This transaction called :

A. Offer and acceptanceB. Counter-offer from insurerC. Counter-offer acceptanceD. Counter-offer from insured

49. Insurance contract is a legally binding agreement between :

I. GovernmentII. InsuredIII. InsurerIV. Broker

A. I & II B. II & IIIC. III & IV D. I & IV

50. In general and life insurance contracts, the insured’s consideration is _____________.

A. to pay premium on timeB. to promise to accept the policyC. to submit the proposal formD. to promise to accept the loss

PCE PART (A&C)


51. The agreement are said to be “consensus ad idem”, that is:

A. Both parties are not in agreement.B. Both parties are in an agreement.C. Both parties are in total agreement.D. No agreement between both parties.

52. A ____________ contract will remain valid until the aggrieved party exercises theoption to treat it void.

A. VoidB. VoidableC. UnenforceableD. All of the above.

53. An insurance contract is a legally binding agreement between an insured and hisinsurer. The essentials of an insurance contract requirements are :

I. Intention to create legal relationshipII. Offer and acceptanceIII. Consent- consensus ad idemIV. Consideration

A. I & II B. II & IVC. I , II & III D. All of the above

54. The agent can act only within the authority granted to him by the principal. Thegranted authority may be ___________________.

A. ExpressedB. ImpliedC. ApparentD. All of the above

55. Agent is given authority which is expressly stated in writing, it is called :

A. Express authorityB. Implied authorityC. Apparent authorityD. Usual authority

PCE PART (A&C)


56. The relationship of principal and agent may be terminated by the following acts,EXCEPT :

A. by notice of revocationB. by notice of renunciationC. by mutual contractD. by mutual agreement

57. The functions of selecting market segments which have similar needs for policiesdeveloped by the company is called _____________________.

A. Market DiversificationB. Market IdentificationC. Market DevelopmentD. None of the above

58. A market-oriented agent will do the following, EXCEPT :

A. Satisfy the need of customers.B. Make profit for himself.C. Use a sales plan and coordinate it with market analysis, segmentation and targeting.D. Develop and design insurance products.

59. Please identify which of the following is NOT part of the customer buying decisionprocess.

A. Problem recognitionB. Information searchC. Handling objectionD. Post-purchase evaluation

60. Based on the studies conducted by U.S.A. indicating that the most important factor forthe selection of a particular insurer is ______________________.

A. The reputation of the agentB. The reputation of the insurerC. The products of the insurerD. The location of the insurer

PCE PART (A&C)


61. When selling is done indirectly by establishing goodwill between the agent and hiscustomer, it is called :

A. Order SellingB. Creative SellingC. Missionary SellingD. Massive Selling

62. Which of the following is the evidence of premium payment for the policyholder?

A. Official ReceiptB. Premium NoticeC. Policy RegisterD. Proposal Form

63. A due payment shall be paid on the date specified in the policy contract. However,most contracts provide that such payments can be made within 30 days from the duedate. It is called ________________________.

A. Lapse PeriodB. Grace PeriodC. Expiry PeriodD. Allowance Period

64. The agent is helping the customer to uncover his needs and recommend policies tomeet those needs. This selling techniques is called ____________________.

A. Order SellingB. Creative SellingC. Missionary SellingD. Massive Selling

65. Which of the following is NOT true for mode of payment?

A. Premium can be paid by yearly, half yearly, quarterly and monthly installment.B. Yearly premium is the lowest premium paid.C. Monthly premium can be collected through home service.D. Monthly premium involves the least administrative work.

PCE PART (A&C)


PART C : Life Insurance

66. When determine the premium rate, which of the following was not taken into accountby the insurance company?

A. MortalityB. ExpensesC. TaxD. Political fees

67. The term “Uberrima fides” is referring to :

A. Insurable InterestB. ClaimC. Utmost Good FaithD. Moral Hazard

68. A contract where one party provides something of value to another party in exchangefor a promise that the other party will perform a stated act if a specified, uncertainevent occurs is called an :

A. Investment contractB. Aleatory contractC. Unilateral contractD. Offering contract

69. Which of the following situation do not have insurable interest?

A. A person insuring his own life.B. A creditor insuring the life of his debtor.C. An employer insuring the life of his key employee.

D. A brother insuring the life of his sister.

70. Section _______ of the Insurance Act 1996 elaborates on the principle of insurableinterest.

A. 150B. 152C. 155D. 154

PCE PART (A&C)


71. For life insurance contracts, the risk to be insured _____________ with time.

A. decreasesB. increasesC. remainD. end

72. Which of the following parties need to observe the principle of Utmost Good Faith?

I. The insuredII. The agentIII. The insurerIV. The legislator

A. I, II & III B. I & IIIC. II & IV D. II, III & IV

73. In general insurance, the insured risk may not increase with duration, and in fact maydecrease due to ________________________________________.

A. the age of the insured decrease.B. the value of the property depreciates.C. better safety measures taken by insurer.D. better safety measures taken by insured.

74. Employer of ABC company purchased a group insurance for his employees. What willhappen to the group insurance if one of his employee leaves the company?

A. The group policy will be terminated.B. The group policy will be continue as usual.C. The premium will be reduced accordingly.D. The benefits for the group policy will be increased for each existing employees.

75. Participants in Family Takaful Plans may elect to incorporate any of the followingsupplementary benefits :

I. Permanent Total DisabilityII. Critical Illness BenefitIII. Personal AccidentIV. Hospitalization Benefit

A. I, II & III B. I, III & IVC. II, III & IV D. All of the above

PCE PART (A&C)


76. “This contract is mainly for protection purpose and the main benefit is generallyguaranteed.” Which of the following contract describe the above statement?

A. Participating ContractB. Non – participating ContractC. EndowmentD. Annuities

77. Level Life Annuity Contract can be defined as a ___________________.

A. Chooseable mode of payment by survival within a fixed period of time.B. Lump sum payment made during a fixed period of time.C. Periodic payment made during a fixed period of time or for the duration of the survival of a designated life or lives.D. Lum sum payment made during a variable period of time.

78. Which of the following policies would you recommend to a customer who needs toprepare an education fund for their children. (Choose the BEST answer)

A. Whole Life PolicyB. Investment-Linked PolicyC. Group PolicyD. Endowment Policy

79. What is the minimum age limit required to participate in Takaful Plan?

A. 16B. 18C. 15D. 17

80. In Takaful, a person who joins any of the Family Takaful Plan become a __________.

A. ParticipantB. PolicyholderC. InsuredD. Contributor

81. Mr. Lim bought a life insurance of RM100 000 and RM50 000 accident benefit. If hedied due to accident, how much can he claim from the insurance company?

A. RM100 000 B. RM50 000C. RM150 000 D. Nothing

PCE PART (A&C)


82. Which of the following is true about the group insurance?

I. It cannot issued to unions, trust and other entitiesII. Group insurance may extend to cover employee’s spouse and eligible children.III. The employee does not need to go for medical check up.IV. Group insurance must be a monthly renewable contract.

A. I, II & III B. II & IVC. II & III D. II, III & IV

83. Which of the following policy generally utilise to cover loans which is graduallybeing repaid?

A. Level Term InsuranceB. Convertibility FeaturesC. Renewable Term InsuranceD. Decreasing Term Insurance

84. Family Takaful benefits are divided into three (3) main portion as below EXCEPT :

A. Permanent Disability BenefitB. Death BenefitC. Maturity BenefitD. Surrender Value Benefit

85. Endowment insurance can be used as ________________________.

A. An incentive to save in a systematic manner.B. A mean of accumulating a fund for specific purposes.C. A mean of hedging against the possibility of untimely death.D. All of the above.

86. A convertible term is a term where ___________________________.

A. it can be converted to any sum assured at the client’s choice.B. it can be converted to another term insurance and whole lifeC. it can be converted to any permanent plan such as term plan or endowment plan.D. it can be converted to any permanent plan such as whole life or endowment plan.

PCE PART (A&C)


87. Which type of policy is the purest form of permanent contract, can be issued withor without participating and provides larger amount of life cover than any otherpermanent type of life insurance?

A. Limited Payment Whole Life PolicyB. Ordinary Life PolicyC. Whole Life Endowment PolicyD. Anticipated Endowment

88. For Deferred Annuity, if death occurs before the annuity payment commences ______.

A. the annuity will be terminatedB. the premium paid are returned to the deceased’ s family.C. the premium will be forfeited to the company.D. the company will pay the sum assured to the nominee.

89. Which of the following statements are false?

I. Renewable term can be renewed with evidence of continued good health.II. At the time of renewal, increased premium will be charged based on the attained age of the life assured.III. An annuity certain is a life annuity where in the return for the payment of a certain sum, known as the purchase money , the office makes a series of yearly, half

yearly or quarterly payments for a specified number of years.IV. The joint life annuity promises to pay the sum assured in the event of the death of the last survivor.

A. I , II & III B. I, II & IVC. II, III & IV D. I, III & IV

90. The Contract of Group Insurance is solely between the insurance company and theemployer who is named in ____________ as the _______________.

A. Master Policy ; OwnerB. Master Piece ; OwnerC. Master Policy; GranteeD. Master Piece; Owner

PCE PART (A&C)


91. Premium paid by the client is divided into the following components,

I. Expense relatedII. Investment relatedIII. Benefit chargesIV. Mortality cost related

A. II, III & IV B. I, II & IIIC. I, II & IV D. All of the above

92. One of the Children’s Insurance is Protected Educational Policies. In this form ofinsurance, the policy is issued on the life of the ___________. The _________ isdesignated as the beneficiary.

A. Child ; MotherB. Child ; ParentC. Child ; ChildD. Parent ; Child

93. In Group Insurance, if the employer pays all the cost or in other words, the plan is___(I)____, __(II)___ of all the eligible employees must join.If the employer and employees share the cost, the plan is ____(III)______, at least__(IV)___ of all eligible employees must join.

A. (I) Master Plan, (II) 90%, (III) Non-Master Plan, (IV) 100%B. (I) Master Plan, (II) 100%, (III) Non-Master Plan, (IV) 75%C. (I) Non-Contributory, (II) 100%, (III) Contributory, (IV) 75%D. (I) Non-Contributory, (II) 75%, (III) Contributory, (IV) 100%

94. Which are the true statements regarding Guaranteed Immediate Annuity?

I. This contract provides guaranteed payments over a fixed period before the death of the annuitant.II. This is a normal life annuity.III. The annuity payment will cease on death of the annuitant.IV. The annuity payment will continue to be paid till the end of the guaranteed period.

A. I, II, III B. I & IIC. II, III & IV D. II, IV

95. _______ days of grace are allowed for the payment of yearly, half-yearly, quarterlyand monthly premiums.

A. 14 B. 15C. 30 D. 45

PCE PART (A&C)


96. When a policy in force for ______ years or more, the ordinary policy becomes entitledto a surrender value.

A. 6B. 2C. 3D. 5

97. Section ______ of the Insurance Act 1996 regulates the basis of surrender values.

A. 154B. 155C. 145D. 156

98. Which of the following regarding policy loans is NOT true?

I. The governing rate of interest on the loan shall be fixed by the company granting the loan.II. The policy loans must be repaid within 3 years after the issuance of such loan.III. The policyholder entitles to loan anytime in their life time.IV. The amount of loan available will be quoted on application to the government.

A. I, II & III B. II, III & IVC. I, II & IV D. All of the above.

99. __________ policy is a policy under which, the cash value available is used as a singlepremium to provide for an insurance on the original terms, but for a reduced sumassured.

A. Extended TermB. Paid-upC. Reducing TermD. Reducing Sum Assured

100. Which of the following is NOT under the non-forfeiture provision ?

A. Automatic Premium LoanB. Paid-up PolicyC. Extended Term AssuranceD. Decreasing Term Assurance

PCE PART (A&C)


101. Which of the following are the criteria of Automatic Premium Loan?

I. It provides a continuation of the insurance cover when the assured fails to pay a premium.II. The assured must provide evidence of insurability when bringing the policy back to its original status.III. Premiums shall be thus paid until the cash value has been entirely utilized.IV. The use of Automatic Premium Loan allows continuity of supplementary benefits.

A. II, III & IV B. I, II & IVC. I, III & IV D. All of the above

102. Which of the following regarding Paid-up policy is NOT true?

I. Once the policy is converted into Paid-up policy, no further premiums are payable.II. All riders and supplementary benefits such as for disability and accidental death shall remain in force.III. Generally a participating policy will cease to participate in future benefits after

such conversion.IV. The length of the term insurance depends on the available amount of the cash value applied as a gross single premium at the time of conversion.

A. I & II B. II, III & IVC. II & III D. II & IV

103. Which of the following cannot be the only basis for an insurance contract to be void?

A. no insurable interestB. non-disclosure of material factsC. misrepresentation of ageD. illegality of subject matter

104. Which of the following is NOT considered when applying for reinstatement?

A. Medical evidenceB. Non-forfeiture periodC. Days of graceD. Insurable Interest

105. ____(I)_____ is the written document which embodies that agreement is in concrete form. ___(II)____ is an intangible thing, a legally binding agreement between the

concerned parties.

A. (I) Contract ; (II) Policy B. (I) Agreement ; (II) ContractC. (I) Policy ; (II) Contract D. (I) Contract ; (II) Clause

PCE PART (A&C)


106. An ________ is one which does not leave any right with the assignor except paying ofpremiums if he chooses to pay.

A. Conditional AssignmentB. Absolute AssignmentC. Transferable AssignmentD. Revocable Assignment

107. The insurer cannot deny liability on the policy after 2 years of its issue on the groundsof misrepresentation or non-disclosure alone unless he can prove that suchmisrepresentation or non-disclosure was made fraudulently by the insured.This statement is referring to :

A. Free look provisionB. Cooling off periodC. Incontestability PeriodD. Reinstatement Clause

108. The most common forms of policy alterations are :

I. Change the mode of paymentII. Decrease the sum assuredIII. Change the class of policyIV. Removal of extra premium

A. I, II & III B. II, III & IVC, I, II & IV D. All of the above

109. Section 156 of the Insurance Act 1996 provides that where a life policy has been inforce for three (3) years or more, it shall not lapse by reason of non-payment ofpremiums but shall have effect subject to such modification as to the period for whichthe policy is to be in force, or of the benefit receivable under it , or both.This statement is referring to :

A. Automatic Premium LoanB. Incontestability ClauseC. Non-forfeiture BenefitD. Reinstatement Condition

PCE PART (A&C)


110. In calculating risks, the insurer have to consider a few factors that may affect thepolicy condition which is _____________________.

I. AvocationII. EducationIII. OccupationIV. Ethnicity

A. II, III & IV B. I, II & IVC. I & III D. I, III & IV

111. Which of the following is false ?

A. Female’s mortality is higher than male’s mortality.B. Lower premium for female in life policy.C. Male’s morbidity is lower than female’s morbidity.D. Female’s mortality is lower than male’s mortality.

112. The insurer usually employs any one of the following methods to deal with sub-standard lives EXCEPT :

A. Decline or postpone the coverage.B. Offer an alternate form of contract.C. Reduce the coverage as well as the premium.D. Charge a debt or lien.

113. Financial underwriting seeks to discover the following :

I. Insurable InterestII. Physical HazardIII. Financial StatusIV. Moral Hazard


114. When there is an extra loading on the proposal, a letter indicating the loading is issuedto the proposer as a _____________.

A. Consideration LetterB. Counter-offerC. Probation Period LetterD. Postpone Coverage

PCE PART (A&C)


115. When the proposal being approved without premium payment, company will issue aletter of acceptance to the proposer required to make a payment within _______ days.

A. 15B. 30C. 90D. 60

116. Commencement of the policy may be back dated to an earlier date, usually up to amaximum of ____________.

A. 30 daysB. 60 daysC. 90 daysD.180 days

117. Which of the following statements are true?

I. Cooling off period is 14 daysII. Medical Underwriting seeks to assess the extent of physical hazard in connection with the applicant when providing insurance coverage.III. Bonus adjustment is one of the treatment of sub-standard lives.IV. Rural area’s mortality rate is lower than the urban area.

A. I & II B. II & IIIC. I & IV D. II & IV

118. For those in employment, taxable / assessable income constitutes such items as :-

I. leave payII. commissionsIII. gratuityIV. allowance


PCE PART (A&C)


119. The premium is allowable when life insurance or deferred annuity is __________.

I. on the individual’s lifeII. on the joint lives of the individual and his/her spouseIII. on the life of the spouse of the individualIV. on the life of the individual’s parents

A. I, II & III B. I, III & IVC. I, II & IV D. All of the above

120. The ________________ serves as an official record of policies issued by the insurer.

A. Policy RecordB. Policy RegisterC. Policy ReceiptD. Policy Letter

121. For participating policies, they are charged a slightly higher premium than their non-participating counterparts and this additional premium is known as _______________.

A. Bonus AdditionalB. Bonus LoadingC. Cash BonusD. Additional Premium

122. Two types of periodical premiums : -

I. Installment PremiumII. True PremiumIII. Consistent PremiumIV. Level Term Premium

A. II & III B. I & IIC. I & IV D. III & IV

123. The charge for covering the cost of mortality alone is called the ________________.

A. Net PremiumB. Gross PremiumC. Risk PremiumD. Interest Premium

PCE PART (A&C)


124. Under this type of regular premiums, the premium payments cease on death and nodeduction is made from the claim amount.

A. True PremiumB. Installment PremiumC. Pure PremiumD. Level Term Premium

125. What is Gross Premium?

A. Net premium plus Loading for expenses plus Loading for profits & contingenciesB. Net premium minus loading for expenses plus loading for profits & contingenciesC. Net premium minus all the expensesD. Gross premium minus all the profits & contingencies

126. Liability = The present value of the benefits payable _______ The present value ofexpenses ______ The present value of the future premium receivable.

A. plus, plusB. plus, lessC. less, plusD. less, less

127. The assets may be valued in several ways, depending on the purpose of the valuation.Some of the common methods of valuing assets are :-

I. Cost PriceII. Book PriceIII. Market ValueIV. Cash Value

A. I, II & III B. I, II & IVC. II, III & IV D. I, III & IV

128. _____________ is only paid on policies resulting into claims either by maturity ordeath, provided the policies concerned had been kept fully inforce by payment ofpremium until such date of claim.

A. Cash BonusB. Terminal BonusC. Interim BonusD. Guaranteed Bonus

PCE PART (A&C)


129. Which among the following are NOT a form of bonus ?

A. Cash BonusB. Maturity BonusC. Guaranteed BonusD. Mortality Bonus

130. What is Cost Price?

A. This is the value for which the assets can be sold in the open-market.B. This is the value placed on the assets in the company’s accounts books.C. This is the price determine by the manufacturer.D. This is the price at which the asset was acquired.

131. The main sources of surplus are :

I. ExpensesII. MortalityIII. New BusinessIV. Interest

A. I, II & III B. I, II & IVC. II, III & IV D. All of the above.

132. What type of value which the assets can be sold in the open market?

A. Book ValueB. Cost ValueC. Market ValueD. Open value

133. What is the purpose of a Valuation Exercise ?

I. To comply with the statutory requirement.II. To test the adequacy of the previous premium scale.III. To test whether the company is solvent.IV. To determine if any changes in the company’s operation are necessary.

A. I, II & III B. II, III & IVC. I, III & IV D. All of the above.

PCE PART (A&C)


134. Under this method, the bonus allotted is in proportion to the sum assured and thebonuses accumulated under the policy.

A. Simple Reversionary BonusB. Compound Reversionary BonusC. Interim BonusD. Maturity Bonus

135. The portion of the surplus that may be passed to the shareholders in the form ofindividuals is normally stated in the company’s memorandum of Articles ofAssociation or by registration and is in the region of ___________ of the divisiblesurplus.

A. 10% - 20%B. 10% - 30 %C. 10% - 25%D. 15% - 25%

136. What type of form need applicant to fill-up major portion of the information relatingto applicant himself ?

A. Proposal FormB. Medical FormC. Declaration FormD. Payment Form

137. “This section includes a declaration that answers given in the proposal and medicalreport forms shall form the basis of the contract”

A. The PreambleB. The ProvisoC. The Operative ClauseD. The Schedule

138. The proposal form completed by the applicant contains as below, EXCEPT :

A. Personal particularsB. Details of liabilitiesC. Details of insuranceD. Personal and family history

PCE PART (A&C)


139. Generally, information necessary for the proper assessment of risk obtained fromdifferent sources as below, EXCEPT :

A. Pay SlipB. Physician’s StatementC. Medical ReportD. Proposal Form

140. Besides recording the applicant’s answer concerning medical history, the reports ofexamining doctor include :

I. Height and weightII. Pulse and blood-pressure readingsIII. Chest and abdomen measurementsIV. Condition of heart, lungs, nervous system

A. I & II B. I, II & IIIC. II, III & IV D. All of the above

141. Two main forms of policy are in use the ___________ type and the _________ type.

I. NarrativeII. ScheduleIII. PreambleIV. Condition

A. I & II B. II & IIIC. III & IV D. I & IV

142. Which report furnishes the agent’s impression about the applicant’s habits,appearance, character and financial status?

A. Previous ReportB. Physician’s ReportC. Agent’s ReportD. Company’s Report

143. Which form of policy is very simple, readily understood and elastic in adaptability?

A. Schedule TypeB. Narrative TypeC. Preamble TypeD. Condition Type

PCE PART (A&C)


144. This section contains the applicant’s declaration, to the best of his knowledge, true andcomplete and permission authorizing the insurer to seek information from any doctorwho has ever attended to him and any life office. Which section is these?

A. Personal and family historyB. Declaration and authorizationC. Details of insuranceD. Personal particulars

145. The standard policy documents are often endorsed to take into account the differingaspects of individual circumstances and needs. Endorsements can be done at the :

I. Time of issue of policyII. After issue of policyIII. Before issue of policyIV. During the issue of policy

A. I & II B. I & IIIC. II & III D. I, II & III

146. The main sections found in the policy are, EXCEPT :

I. The Operative ClauseII. ConditionIII. EndorsementIV. The Preamble

A. I, II & IV B. I, II, IIIC. I, III & IV D. All of the above

147. Which of the following statement is NOT true ?

A. The life insurance contract terminates when a claim is settled.B. The insured may make a claim upon the maturity of the insurance policy.C. The reputation of an insurer lies in the sum of claims to be settled.D. Non of the above.

148. Under which circumstances, a claim may arise?

A. When the insured make a willB. When the insured diedC. When the insured make a policy loanD. When the insured stop premium payment

PCE PART (A&C)


149. When a death claim is made, the insurer need to obtain the following documentaryevidence from the claimant :

I. Proof of SurvivalII. Proof of DeathIII. Proof of AgeIV. Proof of Title and Ownership

A. II, III & IV B. I, II & IVC. I, III & IV D. All of the above.

150. The following documents are proof of title and ownership of an insurance policy,EXCEPT :

A. A deed of assignmentB. A probate of the will from a court of lawC. A note from the insured’s familyD. A letter of administration issued by a court of law

151. For maturity claim, the policyholder needs to complete 3 forms which are :

I. Identity FormII. Discharge FormIII. Survival FormIV. Maturity Form

A. II, III & IV B. I, II & IVC. I, II & III D. I, III & IV

152. Which of the following is NOT relevant to the common settlement option for anendowment plan?

A. Convert the maturity proceeds into annuityB. Continue deposit the maturity proceed with the insurerC. Withdraw 90% of the proceed without the letter of probateD. Withdraw the proceed by installments

153. Doctrine of __________ is important to claims for personal accident policies, as morethan one condition can operate leading to a claim.

A. ContributionB. Proximate CauseC. Subrogation RightD. Indemnity

PCE PART (A&C)


154. En. Ahmad was born in May 2, 1970. He submitted his proposal on October 3, 1996,if the insurer used age last birthday as basis, what is En. Ahmad’s age in his proposal ?

A. 26B. 27C. 28D. 29

155. What is En. Ahmad’s age if he submitted his proposal on Feb 3, 1998 and the insurerused age next birthday as basis ?

A. 26B. 27C. 28D. 29

156. What is En. Ahmad’s age if he submitted his proposal on Dec 3, 1996 and the insurerused age nearest birthday as basis ?

A. 26B. 27C. 28D. 29

157. Interest charge will occur when the policy holder _____________________.

A. Reinstate a lapsed policyB. Repay the outstanding premiumC. Repay a policy loanD. All of the above

158. Policies which accumulate _________ often carry the right to a policy loan.

A. BonusB. Cash valuesC. PremiumD. Surrender Value

PCE PART (A&C)


Please refer to Table I & II for question 159 – 162.

Table I : Premium Rate for 25- year endowment insurance on male lives treat the female lives as 3 years younger.

Age (Next Birthday) Premium per RM1000 sum assured25 39.5026 40.0027 40.5028 41.2529 42.0030 42.8031 43.60

Table II : Discounts for large sum assured

Sum Assured (RM) Discount Per RM 1000 Sum Assure (RM)10,000 – 24,999 1.0025,000 – 39,999 2.0040,000 – 54,999 3.0055,000 – 69,999 4.00Above 70,000 Special Quotation

159. Calculate the premium for the following applicant,

Applicant : DarrenSex : MaleAge : 26Sum Assured : RM 10,000

A. RM 390B. RM 395C. RM 400D. RM 405

160. Calculate the premium for the following applicant,

Applicant : SimonSex : MaleAge : 30Sum Assured : RM 45,000

A. RM 1755B. RM 1791C. RM 1890D. RM 1926

PCE PART (A&C)


161. Calculate the premium for the following applicant and determination of age is nextbirthday.

Applicant : Chris TanSex : MaleDate of Birth : July 25, 1970Cover to commence : January 26, 1998Sum Assured : RM 50,000

A. RM 1875.00B. RM 1912.50C. RM 2025.00D. RM 2062.50

162. Calculate the premium for the following applicant, determination of age is nextbirthday.

Applicant : AngelineSex : FemaleDate of Birth : December 25, 1970Cover to commence : January 26, 1998Sum Assured : RM 30,000

A. RM 1125.00B. RM 1185.00C. RM 1177.50D. RM 1237.50

163. Guidelines on Code of Conduct, which are abided by all employees of insurersoperating in Malaysia at all times, are formulated by _______________

A. Life Insurance Association of Malaysia (LIAM)B. The Actuarial Society of Malaysia (ASM)C. The Malaysian Insurance Institute (MII)D. Persatuan Insurance Am Malaysia (PIAM)

164. Who is the supervisory authority for insurance company?

A. Board of Director of Insurance CompanyB. Bank NegaraC. Audit/Disciplinary CommitteeD. LIAM

PCE PART (A&C)


165. The Audit/Disciplinary Committee of the insurer is responsible for _______________.

A. monitoring compliance of the life insurance insurerB. monitoring compliance of the intermediariesC. monitoring compliance of the life insurance insuredD. monitoring compliance of the life insurance associations

166. The term life insurance used in Code of Ethics and Conduct covers :

I. Home ServiceII. Ordinary Life InsuranceIII. Pensions ContractIV. Permanent Disability Insurance

A. I, III & IV B. II, III & IVC. I, II & III D. All of the above

167. The life insurance’s Code of Conduct applies to all the following persons, EXCEPT :

I. Life insurer’s employeeII. Insurance agentsIII. Registered Insurance BrokersIV. Registered Insurance Consultants

A. I & II B. II & IIIC. II & IV D. III & IV

pce set b

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