Practice Questions – Commercial Lines
QUESTIONS
Storm, wind and water damage includes cover for: / True / False1. Damage by water leaking from a burst pipe
2. Clothes shrinking when you wash them
3. Damage due to lack of maintenance
Ordinary Theft policies cover: / True / False
4. Theft by the insured’s staff
5. Financial loss due to dishonesty by the insured’s staff
6. Damage done by thieves to the building
7. Property your neighbour borrowed, and forgot to return
MULTIPLE TRUE / FALSE QUESTION
For a “fire” in terms of the policy, it must involve: / True / False8. Actual ignition
9. An accidental cause
10. Something that ought to be on fire
11. A deliberate act by the insured
12. Usually a flame
13. Something not meant to be on fire
ANSWERS
1. Damage by water leaking from a burst pipe / X
2. Clothes shrinking when you wash them / X
3. Damage due to lack of maintenance / X
Ordinary Theft policies cover: / True / False
4. Theft by the insured’s staff / X
5. Financial loss due to dishonesty by the insured’s staff / X
6. Damage done by thieves to the building / X
7. Property your neighbour borrowed, and forgot to return / X
MULTIPLE TRUE / FALSE QUESTION
For a “fire” in terms of the policy, it must involve: / True / False8. Actual ignition / X
9. An accidental cause / X
10. Something that ought to be on fire / X
11. A deliberate act by the insured / X
12. Usually a flame / X
13. Something not meant to be on fire / X
QUESTIONS
A within 30 days of the month in which cover incepted
B within 60 days of the end of the month in which cover began
C twice yearly
D annually
MULTIPLE TRUE / FALSE QUESTION
1. SASRIA policies: / True / FalseA are issued on an annual basis only
B cover both political and non-political riot and strike
C all have a prescription period of 12 months, during which claims must be submitted
D include a VAT component
E may be cancelled, but no premium is refundable
ANSWERS
A within 30 days of the month in which cover incepted / X
B within 60 days of the end of the month in which cover began / X
C twice yearly / X
D annually / X
MULTIPLE TRUE / FALSE QUESTION
1. SASRIA policies: / True / FalseA are issued on an annual basis only / X
B cover both political and non-political riot and strike / X
C all have a prescription period of 12 months, during which claims must be submitted / X
D include a VAT component / X
E may be cancelled, but no premium is refundable / X
QUESTIONS
A are set as a flat rate per insured person and do not vary
B are individually set according to the specifics of the insured
C vary between minima and maxima within occupational classes or industry
D vary according to the insured’s income (salary) category
2. Claims under COIDA must be submitted within / True / False
A one month
B six months
C twelve months
D twenty four months
3. Compensation under COID for temporary total disability is paid for 12 months at the rate of / True / False
A 0% of earnings
B 25% of earnings
C 75% of earnings
D 100% of earnings
4. Which one of the following correctly defines the formula used to determine a business’ claims ratio under COIDA? / True / False
A Total claims paid in the year/total premiums paid x 100
B Total premiums paid in the year/total claims paid x 100
C Total claims paid in the year/total claims paid in the previous year
D Total claims paid in the year/number of employees insured under the scheme
5. Arnold suffered the loss of three of the toes on his right foot when a piece of heavy machinery fell on his foot at work. Which one of the following best describes the claim for benefits under COID? / True / False
A He will not be paid a benefit as this would not significantly affect his ability to work
B He will be paid a monthly amount based on his earnings for up to 12 months
C He will be paid a monthly pension for life based on the degree of disability deemed to exist
D He will be paid a lump sum benefit based on the degree of disability deemed to exist
MULTIPLE TRUE / FALSE QUESTIONS
6. The compensation benefits under COIDA are based on the insured’s income at the time of the accident/illness taking place. The calculation of income includes / True / FalseA earnings from a second (part time) evening job held by the insured at the time
B payments for occasional overtime in the 12 months prior to the accident/illness
C payment for regular overtime worked by the insured prior to the accident/illness
D the value of food and accommodation provided to the insured by his/her employer
7. Under COIDA, the duties of the Commissioner for compensation delegated by the Director-General include / True / False
A adjudicating on claims
B setting the levels of contribution
C inquiring into occupational accidents
D administering the compensation fund
E underwriting the risk
ANSWERS
A are set as a flat rate per insured person and do not vary / X
B are individually set according to the specifics of the insured / X
C vary between minima and maxima within occupational classes or industry / X
D vary according to the insured’s income (salary) category / X
2. Claims under COIDA must be submitted within / True / False
A one month / X
B six months / X
C twelve months / X
D twenty four months / X
3. Compensation under COID for temporary total disability is paid for 12 months at the rate of / True / False
A 0% of earnings / X
B 25% of earnings / X
C 75% of earnings / X
D 100% of earnings / X
4. Which one of the following correctly defines the formula used to determine a business’ claims ratio under COIDA? / True / False
A Total claims paid in the year/total premiums paid x 100 / X
B Total premiums paid in the year/total claims paid x 100 / X
C Total claims paid in the year/total claims paid in the previous year / X
D Total claims paid in the year/number of employees insured under the scheme / X
5. Arnold suffered the loss of three of the toes on his right foot when a piece of heavy machinery fell on his foot at work. Which one of the following best describes the claim for benefits under COID? / True / False
A He will not be paid a benefit as this would not significantly affect his ability to work / X
B He will be paid a monthly amount based on his earnings for up to 12 months / X
C He will be paid a monthly pension for life based on the degree of disability deemed to exist / X
D He will be paid a lump sum benefit based on the degree of disability deemed to exist / X
MULTIPLE TRUE / FALSE QUESTIONS
6. The compensation benefits under COIDA are based on the insured’s income at the time of the accident/illness taking place. The calculation of income includes / True / FalseA earnings from a second (part time) evening job held by the insured at the time / X
B payments for occasional overtime in the 12 months prior to the accident/illness / X
C payment for regular overtime worked by the insured prior to the accident/illness / X
D the value of food and accommodation provided to the insured by his/her employer / X
7. Under COIDA, the duties of the Commissioner for compensation delegated by the Director-General include / True / False
A adjudicating on claims / X
B setting the levels of contribution / X
C inquiring into occupational accidents / X
D administering the compensation fund / X
E underwriting the risk / X
QUESTIONS
5. The amount by which the premiums for year exceed the claims
6. The trading profit for the year
7. The amount of cash on hand
8. The difference between its assets and its liabilities
The maximum rate of commission payable to intermediaries is regulated by: / True / False
9. The FAIS Act
10. The Companies Act
11. The Insurance Act
12. Supply and demand
MULTIPLE TRUE / FALSE QUESTIONS
A short term insurer’s annual statement of liabilities must include: / True / False1. The Rand value of claims outstanding
2. An estimate of claims incurred but not reported
3. An amount in respect of goodwill
4. Estimated liability for taxation
An insurance company’s Statements and Accounts sent to the Registrar must: / True / False
13. Be presented every six months
14. Include all premiums, whether paid or outstanding
15. Show separate amounts for each main class of business carried on
16. Be presented by both domestic and foreign insurers, who conduct business within the Republic
ANSWERS
5. The amount by which the premiums for the years exceed the claims / X
6. The trading profit for the year / X
7. The amount of cash on hand / X
8. The difference between its assets and its liabilities / X
The maximum rate of commission payable to intermediaries is regulated by: / True / False
9. The FAIS Act / X
10. The Companies Act / X
11. The Insurance Act / X
12. Supply and demand / X
MULTIPLE TRUE / FALSE QUESTIONS
A short term insurer’s annual statement of liabilities must include: / True / False1. The Rand value of claims outstanding / X
2. An estimate of claims incurred but not reported / X
3. An amount in respect of goodwill / X
4. Estimated liability for taxation / X
An insurance company’s Statement of Accounts sent to the Registrar must: / True / False
13. Be presented every six months / X
14. Include all premiums, whether paid or outstanding / X
15. Show separate amounts for each main class of business carried on / X
16. Be presented by both domestic and foreign insurers, who conduct
business within the Republic / X
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