Ic s01 Survey and Loss Assessment

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE
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QUESTIONS BASED ON
‘SURVEY AND LOSS ASSESSMENT’

QUESTIONS BASED ON ‘SURVEY AND LOSS ASSESSMENT’

Question 1 Which type of claimants are not content with collecting the actual loss but seek to
get as much as they can get by trading tactics ?
(a) Habitual claimant
(b) Reasonable claimant
(c) Misinformed claimant
(d) Trading claimant
(e) Hostile claimant
Correct Answer Trading claimant

Answer Explanation Trading claimants – The most common type of claimants the surveyor comes across,
whose aim is ‘to make fortune out of a misfortune’. They are not content with
collecting the actual loss but seek to get as much as they can get by trading tactics.
Question 2 The surveyor must make sufficient investigation of facts relating to a loss to
determine whether the _____ is liable under the policy.
(a) Insured
(b) Insurer
(c) Assessee
(d) Nominee
(e) Actuary
Correct Answer Insurer

Answer Explanation The surveyor must make sufficient investigation of facts relating to a loss to
determine whether the insurance company ie. the insurer is liable or not under the
policy.
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QUESTIONS BASED ON

Question 3 A Surveyor or Loss assessor shall submit his report to the insurer as expeditiously as
possible, but not later than ____ days of his appointment.
(a) 15
(b) 30
(c) 45
(d) 60
(e) 75
Correct Answer 30
Question 4 In case where damage to an insured item can be repaired and if the repairs are
executed at a workshop owned by the insured, the insurance company will pay –
1. Cost of materials incurred for the purpose
2. Cost of wages incurred for the purpose
3. Some reasonable percentage to cover overhead charges
(a) Only 1
(b) Only 3
(c) 1 and 2
(d) 1 and 3
(e) All 1, 2 and 3
Correct Answer All 1, 2 and 3

Answer Explanation If the repairs are executed at a workshop owned by the insured, the insurance
company will pay the cost of materials and wages incurred for the purpose of repairs
plus a reasonable percentage to cover overhead charges.
QUESTIONS BASED ON

Question 5 How are machinery values ordinarily determined?

(a) Actual replacement cost
(b) Replacement cost plus allowance for depreciation
(c) Replacement cost less allowance for depreciation
(d) Replacement cost divided by allowance for depreciation
(e) Market value of such new machine
Correct Answer Replacement cost less allowance for depreciation

Answer Explanation Machinery values ordinarily determined according to replacement cost, less
allowance for depreciation or betterment.
Question 6 The Code of Conduct for practicing surveyors is given in the chapter _____ of the
‘Insurance Surveyors and Loss Assessors (Licensing , Professional requirements and
Code pf Conduct) Regulations, 2000’.
(a) 2
(b) 4
(c) 6
(d) 8
(e) 11
Correct Answer 6
QUESTIONS BASED ON

Question 7 Which of these is/are instances of disputes between insured and the insurer on the
admittance and settlement of claims?
1. Arithmetic calculation of indemnity and the amount of loss payable
2. Interpretation of ‘exclusion’ clause and the ‘covered perils’
3. Reinstatement or replacement option exercised by the insurer as a measure of
indemnity
(a) Only 1
(b) Only 3
(c) 2 and 3
(d) 1 and 3
(e) All 1, 2 and 3

Answer Explanation All the above are instances of disputes between insured and the insurer on the
admittance and settlement of claims.
Question 8 Under the Electronic Equipment policy, which of the following are treated as
exclusions –
1. Loss to property covered under the terms of the maintenance agreement
2. Loss caused by any faults existing at the time of commencement of policy
3. Loss or bulbs, valves, fuses, seals etc.
(a) Only 1
(b) Only 3
(c) 2 and 3
(d) 1 and 2
(e) All 1, 2 and 3

Answer Explanation The entire above are treated as exclusions under the Electronic Equipment policy.
QUESTIONS BASED ON

Question 9 The ‘risk’ covered in the policy may be explained under which of the following heads
in a Survey Report?
1. Nature of occupancy
2. Nature of the insured
3. Details of construction
4. Details of housekeeping
(a) Only 3
(b) 1, 3 and 4
(c) 1, 2 and 3
(d) 2 and 3
(e) All 1, 2, 3 and 4
Correct Answer 1, 3 and 4

Answer Explanation The ‘risk’ can also be explained under the following subheads so that the loss is
understood in the correct perspective by the claim processing official :
- Details of constriction
- Nature of occupancy
- Type of affected property
- Details of housekeeping
- Type of exposure
- Details of previous similar occurrences
Question 10 Which types of claimants consider insurance as a mode of investment and want to
recover more than what he has paid as the premium while making a claim?
QUESTIONS BASED ON

(a) Habitual claimant

(b) Reasonable claimant
(c) Misinformed claimant
(d) Trading claimant
(e) Hostile claimant
Correct Answer Habitual claimant

Answer Explanation The characteristic of a Habitual Claimant is that he considers the insurance as a mode
of investment – his express desire is to recover more than what he has paid as the
premium.
Question 11 The ‘Extent of Damage’ part of the survey report is devoted in furnishing the ______
details of the observed damages.
1. Practical 2. Qualitative 3. Quantitative
(a) Only 1
(b) Only 2
(c) Only 3
(d) 2 and 3
(e) All 1, 2 and 3
Correct Answer 2 and 3

Answer Explanation The ‘Extent of Damage’ part of the survey report is devoted in furnishing
the qualitative and quantitative details of the observed damages. The description of
damages should be visible in the evidence furnished by surveyor in the form of
photographs appended to the report.
QUESTIONS BASED ON

Question 12 If more than one policy is covering the interest in the property insured, the _______
clause in the policy comes into effect.
(a) 1. Deductible
(b) 2. Indemnity
(c) 3. Proximate
(d) 4. Contribution
(e) 5. Good faith
Correct Answer 4. Contribution

Answer Explanation If more than one policy is covering the interest in the property insured, the
‘Contribution’ clause in the policy comes into effect.
As the name implies, the sum insured on each of the policies are added together and
each insurer will pay a proportion of the loss equivalent to the proportion of the sum
insured to the total sum insured.
Question 13 Which of the following is /are objectives of Segregation / Inventory verification after
a fire or flood etc.?
1. To eliminate from consideration articles that are damaged
2. To present the affected balance items for inspection in the condition that will
make its remaining value most apparent
3. To produce an inventory which shall be the basis on which the loss is determined
(a) Only 1
(b) Only 2
(c) 2 and 3
(d) 1 and 2
(e) All 1, 2 and 3

Answer Explanation Option 1 should correctly read as - To eliminate from consideration articles that are
undamaged.
QUESTIONS BASED ON

Question 14 Valued policies can be issued in fire insurance for works of art, obsolete machinery
etc., subject to _____ .
(a) Terms of the policy
(b) Indemnity clause
(c) Minimal clause
(d) A maximum amount payable
(e) Valuation certificate
Correct Answer Valuation certificate

Answer Explanation Valued policies can be issued in fire insurance for works of art, obsolete machinery
etc, and subject to Valuation Certificate.
Question 15 Which of this is NOT a method of valuation to depreciate an asset?

(a) Straight line method
(b) Declining balance method
(c) Inverted curve method
(d) Present worth method
(e) Sum of years digits method
Correct Answer Inverted curve method

Answer Explanation There are Non-Interest based and Interest based methods of valuation to depreciate
on original cost.
Non-interest procedures are – i) Straight line method, ii) Declining balance method,
iii) Sum of years digits method
Interest based procedures are – i) Sinking fund method and ii) Present worth method
Inverted curve is not a method of depreciation.
QUESTIONS BASED ON

Question 16 Most Engineering policies, Marine ICC ‘A’ etc. come under which policy head?
(a) ‘Named Risk’ policy

(b) ‘All Risk’ policy
(c) ‘No Risk’ policy
(d) ‘High Risk’ policy
(e) ‘Catastrophe’ policy
Correct Answer ‘All Risk’ policy

Answer Explanation Under Proximate Cause, the policies can be broadly grouped under ‘All Risk’ policies
and ‘Named Risk’ policies. Most Engineering policies (C.A.R., E.A.R etc) , Marine ICC
‘A’ and All Risk on Jewellery etc. under Miscellaneous class of insurances come under
‘All Risk’ group and Standard Fire and Special perils policy, Motor, Marine etc. fall
under ‘Named Risk’ group.
Question 17 A Student Member seeking a license to act as a Surveyor and Loss Assessor shall
undergo practical training for a period of not less than ____ months with a licensed
Associate or Fellow Surveyor and Loss Assessor.
(a) 3
(b) 6
(c) 9
(d) 12
(e) 15
Correct Answer 12
QUESTIONS BASED ON

Question 18 The contract of insurance is a ______ contract between the insurer and insured, and
is the ______ product of the system.
(a) Pecuniary , Intangible
(b) Pecuniary , tangible
(c) Legal, intangible
(d) Legal, tangible
(e) None of above
Correct Answer Legal, tangible

Answer Explanation The insurance contract is a legal contract between the insurer and insured, and is the
tangible product of the system, devised to handle risk through a transfer of the
burden of uncertain and unpredictable events to the insurer, which may otherwise
cause pecuniary losses to the insured.
Question 19 The surveyor should organize immediate disposal of damage affected items, if they
are of ______, to the market with the concurrence of the insured and insurer.
(a) Critical to production
(b) Perishable nature
(c) High value
(d) Low value
(e) Not Critical to production
Correct Answer Perishable nature

Answer Explanation The surveyor should organize immediate disposal of damage affected items, if they
are of perishable nature, to the market so that some price / salvage value can be
received before they become useless.
QUESTIONS BASED ON

Question 20 ________ inspection by the surveyor means visiting the site of the reported
occurrence.
(a) On the spot
(b) Off the spot
(c) Examining the claim
(d) Recording survey
(e) Document
Correct Answer On the spot

Answer Explanation Visiting the site of the reported occurrence and making On-the-spot inspection is a
part of the procedural sequential approach generally followed by surveyors.
Question 21 __________ warranties may be stated in terms of, for example, nature of occupancy,
end use of premises, condition of packing etc.
(a) Impress
(b) Implied
(c) Stated
(d) Express
(e) Admissible
Correct Answer Express

Answer Explanation A warranty is a condition and unless it is complied with, there is no liability for the
loss. Express warranties may be stated in terms of nature of occupancy (like -No
inflammable material having flash point of below 32 degree centigrade should be
stored in the warehouse, end use of premises (like – the premise to be used as shop
only and no manufacturing activities to be carried out), condition of packing etc.
QUESTIONS BASED ON

Question 22 Which type of obsolescence relates to the difference between the design and
materials of construction used presently to the item assessed?
(a) Functional obsolescence
(b) Technological obsolescence
(c) Economic obsolescence
(d) Financial obsolescence
(e) Constructional obsolescence
Correct Answer Technological obsolescence

Answer Explanation Technological obsolescence relates to the difference between the design and
materials of construction used presently to the item assessed (use of superior
materials which would enhance life expectancy, miniaturization in electronics
components reducing the size etc.)
Question 23 ________ in marine losses assumes special significance when the consignment size is
large and sizeable bags are damaged, possibly by contact with water.
(a) Protection
(b) Verification
(c) Segregation
(d) Salvaging
(e) Inspection
Correct Answer Segregation

Answer Explanation Segregation in marine losses assumes special significance when the consignment size
is large (for example when dealing with food grains, fertilizes, cement etc. in bags)
and sizeable bags are damaged, possibly by contact with water.
On separation of sound bags, the surveyor has to decide the mode of segregation to
suit assessment of percentage depreciation of the balance bags.
QUESTIONS BASED ON

Question 24 Which of these is / are Non-Interest based method of valuation to depreciate on

original cost?
1. Sum of years digits method
2. Sinking fund method
3. Present worth method
(a) Only 1
(b) Only 2
(c) 1 and 3
(d) 2 and 3
(e) All 1,2 and 3
Correct Answer Only 1

Answer Explanation Non-interest procedures are – i) Straight line method, ii) Declining balance method,
iii) Sum of years digits method
Interest based procedures are – i) Sinking fund method and ii) Present worth method
Question 25 In case of the _______ policies, the focus is to find out whether any of the exceptions
stated in the policy has come into operation, and has a bearing on the cause of loss.
(a) Named Risk
(b) All Risk
(c) Marine Inland transit
(d) Term
(e) All of the above
Correct Answer All Risk

Answer Explanation In case of the ‘All Risk’ policies, the focus is to find out whether any of the exceptions
stated in the policy has come into operation, and has a bearing on the cause of loss.
The surveyor effort’s should be directed to analyze the reported occurrence, against
his observed facts on the occurrence, taking each of the stated exception in the
policy for analysis one by one and if none of the exceptions is found applicable, it can
be reasonably confirmed that the reported loss is admissible under the ‘all risk’
policy.
QUESTIONS BASED ON

Question 26 Which of these are treated as exclusions in Marine Cargo policies?

1. Damages caused by ordinary leakages
2. Loss caused by inherent vice or nature of the subject matter
3. Loss caused by insufficiency of packing
(a) Only 1
(b) Only 2
(c) 2 and 3
(d) 1 and 3
(e) All 1, 2 and 3

Answer Explanation Exclusions under Marine Cargo policies include –
1. Damages / shortages caused by ordinary leakage, ordinary loss in weight or
volume
2. Loss caused by inherent vice or nature of the subject matter
3. Loss / damage caused by insufficiency or unsuitability of packing or preparation of
the subject matter insured.
Question 27 In India, professional recognition of an insurance surveyor was an implied one,

through the insertion of ______ in the Insurance Act 1938.
(a) Sec. 24 UM
(b) Sec. 42 UM
(c) Sec. 51 UM
(d) Sec. 64 UM
(e) Sec. 77 UM
Correct Answer Sec. 64 UM

Answer Explanation In India, professional recognition of an insurance surveyor was an implied one,
through the insertion of Sec. 64 UM in the Insurance Act 1938, on amendment in
1968. Till then the surveyor’s profession was nowhere formally referred to.
QUESTIONS BASED ON

Question 28 ______ is a term commonly used to refer to the system of maintaining records of
financial transactions of any commercial enterprise.
(a) Journal entry
(b) Accounting principles
(c) Book keeping
(d) Ledgers
(e) Trail balance
Correct Answer Book keeping

Answer Explanation Book Keeping is a term commonly used to refer to the system of maintaining records
of financial transactions of any commercial enterprise.
This covers accounting records in the initial stage of every transaction and the
preparation of final accounts i.e. the Balance Sheet etc.
Question 29 Which of these is/are instances of disputes between insured and the insurer on the
admittance and settlement of claims?
1. Valuation and disposal of salvage
2. Position of security cabin of the watchman
3. Depreciation to be applied in assessing property losses
4. Reasonableness of repair charges indemnified
(a) 1 and 2
(b) 3 and 4
(c) 1,2 and 3
(d) 1, 3 and 4
(e) All 1, 2, 3 and 4

Answer Explanation All the above except the ‘situation of security cabin’ can be instances of disputes
between insured and the insurer on the admittance and settlement of claims.
QUESTIONS BASED ON

Question 30 Only persons or corporate’s who have _______ in property / assets can cover such
properties / assets by insurance.
(a) Proximity
(b) Insurable interest
(c) Liability
(d) Decision making
(e) Indemnity
Correct Answer Insurable interest

Answer Explanation Only persons or corporate who have an insurable interest in property / assets can
cover such properties / assets by insurance. The competency of a person /corporate
to effect a contract of insurance is determined by (i) his legal capacity to contract and
(ii) insurable interest in the subject matter of insurance.
Question 31 An applicant seeking a license to act as a surveyor and loss assessor shall undergo a
period of practical training of not less than _____ months with a surveyor and loss
assessor.
(a) 3
(b) 6
(c) 9
(d) 12
(e) 15
Correct Answer 12
QUESTIONS BASED ON

Question 32 A ______ is a condition and unless it is complied with there is no liability for the loss.
(a) Indemnity
(b) Premium paid
(c) Proposal
(d) Warranty
(e) Surveyors confirmation
Correct Answer Warranty

Answer Explanation A warranty is a condition and unless it is complied with there is no liability for the
loss. It is immaterial for what purpose a warranty is introduced, but being
introduced, liability does not exist unless it is literally compiled with.
Question 33 The verification of multiple policies is carried out by the surveyor to decide the
_______ under respective policies.
(a) Loss amount
(b) Damage amount
(c) Appropriate coverage
(d) Commission amount
(e) Claim amount
Correct Answer Appropriate coverage

Answer Explanation The verification of multiple policies is carried out by the surveyor to decide the
appropriate coverage under respective policies, and thereby ascertain the individual
insurer’s liability under each of the policies in force that time of loss.
QUESTIONS BASED ON

Question 34 In the case of stocks that after reconditioning, must be sold for less than the price of
sound grade, the measure of loss will be the cost of reconditioning ______ the
amount lost through price reduction.
(a) Less
(b) Plus
(c) Multiply
(d) Divide
(e) Double
Correct Answer Plus

Answer Explanation Generally, single commodity stocks in bulk or in packages (like bags of food grains,
fertilizers, tea etc.) can be reconditioned to some extent after damage. When such
stocks, that after reconditioning, must be sold for less than the price of sound grade,
the measure of loss will be the cost of reconditioning plus the amount lost through
price reduction.
Question 35 As per regulation ______ , of IRDA Code of Conduct, every surveyor and loss assessor
shall submit an annual statement in the prescribed format.
(a) 19 (a)
(b) 19 (b)
(c) 19 (c)
(d) 19 (d)
(e) 19 (e)
Correct Answer 19 (b)

Answer Explanation As per regulation 19 (b) of IRDA Code of Conduct, every surveyor and loss assessor
shall submit an annual statement in the prescribed format.
QUESTIONS BASED ON

Question 36 _____ represents the amounts owed by the business and all claims against the
business, whereas ______ represent anything of value owned by the business.
(a) Loss , Profit
(b) Profit , Loss
(c) Assets, Liabilities
(d) Liabilities, Assets
(e) Expenditure, Income
Correct Answer Liabilities, Assets

Answer Explanation Assets – Anything of value owned by the business. Articles owned (or claims on
others) such as furniture, cash, stock of goods, money owned by debtors etc.
Liabilities - Amounts owed by the business and all claims against the business
Question 37 For _________, the reconstruction cost can be arrived at by plinth area method.
(a) Marine containers
(b) Plant and machinery
(c) Merchandise
(d) Buildings
(e) Ambulances
Correct Answer Buildings

Answer Explanation For Buildings, the reconstruction cost is arrived at by either plinth area method or by
extrapolation of original cost of construction using the cost of construction index.
QUESTIONS BASED ON

Question 38 In case there is damage to a large quantity of any powdered or granulated

commodity, this would require too much time and labour to re-bag it for weighment.
In such cases the system of _____ is used.
(a) Appropriate weights
(b) Volumetric measurements
(c) Past weight records
(d) Weight age measurements
(e) True Book Records
Correct Answer Volumetric measurements

Answer Explanation In Volumetric measurements, piling of the powder/granules in regular shape like
rectangular or conical are done. There is usually a constant relation between the
weight and quantity of such commodities, a relation which enables the surveyor to
calculate the weight from volumetric measurement of the quantity.
Question 39 Insurance policies are mostly market value policies and the market value of a
property is nothing but the _____.
(a) Depreciated value of property
(b) Value in exchange
(c) Actual market value
(d) Value in return
(e) Written down value
Correct Answer Value in exchange

Answer Explanation Market value of a property is nothing but the value in exchange, i.e. what a buyer
will pay for the property or what it would cost to buy similar property at the place
and at the price ruling at the time of loss.
QUESTIONS BASED ON

Question 40 If the damaged items are _______, the stock related books should be perused and
initialed during the first visit itself, to avoid any further tampering of records.
(a) Tools
(b) Baggage
(c) Stationery items
(d) Stocks in trade
(e) Flame able liquids
Correct Answer Stocks in trade

Answer Explanation If the damaged items are predominantly stocks in trade or manufacturing stocks, the
stock related books should be perused and initialed during the first visit itself, to
avoid any further tampering of records.
Question 41 What is the suggested protective measure for ferrous spare parts, small tools etc?
(a) Pump out the oil from bottom of tanks
(b) Cleaned, dried and heated up if insulation value is low
(c) Dewatering of basements
(d) Put into wire buckets and dip in oil
(e) Rebagging using dry bags
Correct Answer Put into wire buckets and dip in oil

Answer Explanation Protective measure for ferrous spare parts, small tools – can be put into wire buckets
and dipped into barrels of oil.
QUESTIONS BASED ON

Question 42 The indemnity clause in baggage insurance policy states that ‘To indemnify the
insured to the extent of the _____ value of the accompanied personal baggage of the
insured lost or destroyed’.
(a) Notional
(b) Market
(c) Intrinsic
(d) Minimal
(e) Depreciated
Correct Answer Intrinsic

Answer Explanation The indemnity clause in baggage insurance policy states that ‘To indemnify the
insured to the extent of the intrinsic value of the accompanied personal baggage of
the insured lost or destroyed’.
Question 43 Which type of inspection provides a firsthand detail of the degree of damages, based
on which the surveyor can explore alternative use of damaged material.
(a) Market inspection
(b) Arial inspection
(c) Competitor inspection
(d) Deliberate inspection
(e) Physical inspection
Correct Answer Physical inspection

Answer Explanation Physical inspection provides a firsthand detail of the degree of damages, based on
which the surveyor can explore alternative use of damaged material, optimise the
salvage recovery and determine the applicable depreciation.
QUESTIONS BASED ON

Question 44 In case of sale of salvage by tender, the deposits are ______ to those parties whose
offers are not accepted
(a) Adjusted
(b) Forfeited
(c) Refunded
(d) Reissued
(e) Deposited
Correct Answer Refunded

Answer Explanation In sale of salvage by tender, the sale is advertised; tender forms and conditions are
given to prospective buyers who come to see the salvage. With the sealed tenders,
normally parties are asked to furnish specified amount of deposit to justify their
genuine interest.
The deposits are refunded to those parties whose offers are not accepted.
Question 45 In practice. The most popular basis of valuation for marine losses is _______ .
(a) Cost, insurance & Freight + 20%
(b) Cost, insurance & Freight + 10%
(c) Cost & Freight + 10%
(d) Cost & Freight + 20%
(e) Cost, insurance & Freight + 25%
Correct Answer Cost, insurance & Freight + 10%

Answer Explanation Marine insurance policies are valued policies i.e. the value of the items covered are
agreed in advance between the insured and insurer. In practice. The most popular
basis of valuation for marine losses is Cost, insurance & Freight + 10%.
QUESTIONS BASED ON

Question 46 Which of these is/are the usual income items that are taken to the credit side of the
Profit and Loss Account -
1. Dividend received
2. Interest earned
3. Discount received
(a) Only 3
(b) 1 and 2
(c) 2 and 3
(d) 1 and 3
(e) All 1, 2 and 3

Answer Explanation The usual income and profits that are taken to the credit side of the Profit and Loss
account are :
- Dividend received
- Interest earned
- Discount and Commission received
Question 47 Which accounting statement shows readily the financial position of the business at a
given date?
(a) Profit and Loss account
(b) Balance Sheet
(c) Trial Balance
(d) Sales register
(e) Trading account
Correct Answer Balance Sheet

Answer Explanation Balance Sheet is prepared as at a particular date and not for a particular period as is
a summary of the balances remaining open in the General Ledger. It readily shows
the financial position of the business at a given date by disclosing the amount of
capital contributed and how the same has been invested and the values of assets and
liabilities and their nature.
QUESTIONS BASED ON

Question 48 What are the qualities for a surveyor to be successful and acceptable to the insurer,
insured and other related agencies?
1. Clear understanding of the policy conditions
2. Knowledge of ‘Cause effect analysis’
3. Knowledge of ‘failure analysis’
(a) Only 1
(b) Only 3
(c) 1 and 2
(d) 1 and 3
(e) All 1, 2 and 3

Answer Explanation To be a successful and acceptable to the insurer, insured and other related agencies,
the surveyor should have a clear understanding of the respective policy conditions, a
good knowledge of commercial and accounting practices, a broad based knowledge
of technical aspects of ‘failure analysis’ , ‘cause effect analysis’ and other commonly
encountered hazards in property damages.
Question 49 Record of survey reports, photographs and other important documents shall be
maintained by the surveyor for a period of _____ years
(a) 2
(b) 3
(c) 5
(d) 7.5
(e) 10
Correct Answer 3
Answer Explanation Record of survey reports, photographs and other important documents shall be
maintained by the surveyor for a period of three years which shall be furnished with
other specified returns as and when called for by the investigating authority or
insurer.
QUESTIONS BASED ON

Question 50 The principal objective of a survey is to establish the cause of _____ and to assess
fairly and accurately the extent in monetary terms in conformity with the specific
policy conditions.
(a) Loss
(b) Damage
(c) Indemnity
(d) Both 1 and 2
(e) Both 1 and 3
Correct Answer Both 1 and 2

Answer Explanation The principal objective of a survey is to establish the cause of LOSS and DAMAGE and
to assess fairly and accurately the extent in monetary terms in conformity with the
specific policy conditions.
Question 51 The Sales Day book is an important book of accounting entries. Which is the ’source
document’ for verification of entries in this book?
(a) Stock register
(b) Purchase invoices
(c) Vouchers
(d) Trial balance
(e) Sales invoices
Correct Answer Sales invoices

Answer Explanation The Sales Day Book is used to record the sales on credit as they take place. The
‘source document’ for verification of entries in this book is the ‘Sales Invoices’.
QUESTIONS BASED ON

Question 52 Before going into the technicalities of the ‘expected perils / exclusions and their
implications’, the surveyor should appreciate that the cardinal principle of viewing a
loss is to confirm whether the reported loss is attributed to ________ cause.
1. Accidental 2. Intentional 3. Fortuitous
(a) Only 1
(b) Only 2
(c) 1 and 3
(d) 1 and 2
(e) All 1,2 and 3

Answer Explanation Accidental cause is that which produces results that are not foreseen and Fortuitous
cause means happening by chance rather than intention. The purpose of a policy is to
secure indemnity against accidents which may happen and not against events which
must happen or which have been deliberately brought about.
Question 53 Which of these is NOT included in the Survey Report while mentioning the Policy
details?
(a) Net worth of the insured
(b) Validity period of the policy
(c) Policy number
(d) Name and address of insurer and insured
(e) Particulars of clauses affecting the reported loss
Correct Answer Net worth of the insured

Answer Explanation The details of policy which are normally included in the Survey Report include all of
the above except the net worth of the insured.
QUESTIONS BASED ON

Question 54 In which type of surveys is the printed formats commonly used?

(a) Spot survey
(b) Final survey
(c) Joint survey
(d) Preliminary survey
Correct Answer Spot survey

Answer Explanation Spot surveys ( for eg. in Motor policies) is generally carried out at the spot of
accident of a vehicle before it is shifted for repairs and the purpose is to record the
visible damages, particulars of the vehicle and related documents, cause of accident
as elicited from the driver etc. Use of printed formats is very common for spot survey
reports.
Question 55 ________ is the impairment of desirability arising from economic forces such as
changes in legislative enactments.
(a) Functional obsolescence
(b) Financial obsolescence
(c) Economic obsolescence
(d) Constructional obsolescence
(e) Technological obsolescence
Correct Answer Economic obsolescence

Answer Explanation Economic obsolescence is the impairment of desirability arising from economic
forces such as changes in legislative enactments, e.g. Impossibility of selling an old
commercial vehicle if pollution rules are strictly implemented thus making its value
equivalent to scrap value though it is in healthy condition.
QUESTIONS BASED ON

Question 56 Recommending non-admissibility of the reported claim is one of the most difficult
tasks of a / an _______ .
(a) Insurer
(b) Insured
(c) TPA
(d) Agent
(e) Surveyor
Correct Answer Surveyor

Answer Explanation Recommending non-admissibility of the reported claim is one of the most difficult
tasks of a Surveyor. So he should be fully equipped with all facts and evidences
before any comment on the admissibility of claim is made.
Question 57 In accounting, why is a Journal Book maintained?

(a) For recording details of goods purchased and sold
(b) For recording bills receivable and payable
(c) For recording cash transactions
(d) For recording details of goods sold but later returned
(e) For recording residuary transactions for which separate books cannot be
conveniently maintained
Correct Answer For recording residuary transactions for which separate books cannot be
conveniently maintained
Answer Explanation A Journal Book is maintained for recording residuary transactions for which separate
books cannot be conveniently maintained. Journal entries are used to record the
following type of entries – Opening entries, Closing entries, Adjustment entries,
Rectification entries and Transfer entries.
QUESTIONS BASED ON

Question 58 The main purpose of keeping financial accounts is /are –

1. To ascertain the results of operations
2. To know the financial position at the end of a period
3. To determine exactly the relation with outsiders
(a) Only 1
(b) 1 and 2
(c) 2 and 3
(d) 1 and 3
(e) All 1, 2 and 3

Answer Explanation Whatever may be the form of business organization, the main purpose of keeping
financial accounts are –
1. To ascertain the results of operations during a particular period by preparing the
Profit and Loss account
2. To know the financial position at the end of a period by studying the Balance Sheet
3. To determine exactly the relation with outsiders – examination of creditors and
debtors
QUESTIONS BASED ON

Question 59 As per the Code of Conduct specified in the chapter IV of ‘Insurance Surveyors and
Loss Assessors Regulations 2000’, every Surveyor and Loss Assessor shall –
1. Maintain capital adequacy as mentioned in Chapter IV
2. Behave ethically and with integrity
3. Not accept survey work in areas for which he does not hold a license
4. Keep himself updated with all developments relevant to his professional practice
(a) 1, 2 and 3
(b) 2, 3 and 4
(c) 1, 2 and 4
(d) 1, 3 and 4
(e) All 1, 2, 3 and 4

Answer Explanation In the Code of Conduct specified in the chapter IV of ‘Insurance Surveyors and Loss
Assessors Regulations 2000’, there is no mention of any capital adequacy
requirement for a Surveyor.
Question 60 Which of these is NOT a form of survey?

(a) Professional survey
(b) Spot survey
(c) Preliminary survey
(d) Final survey
(e) Joint survey
Correct Answer Professional survey

Answer Explanation Depending on the type, nature and extent of the reported loss, location and
circumstances under which the loss has taken place, the insurer may instruct the
surveyor to carry out:
- Spot survey
- Preliminary survey
- Final survey
- Joint survey
QUESTIONS BASED ON

Question 61 Assessment of losses under Fidelity Guarantees requires detailed examination of

______ of the insured employer.
(a) Fire protection equipment
(b) Books of accounts
(c) Boiler room and equipment
(d) Cost of motor repairs
(e) Transport cost to and fro from the factory
Correct Answer Books of accounts

Answer Explanation Fidelity Guarantees policy protects the employer against any fraudulent or dishonest
acts committed by its. Employees. Assessment of losses under Fidelity Guarantees
requires detailed examination of books of accounts of the insured employer.
Question 62 The term ________ refers to the superior qualities of the replaced machinery such as
increased output, reduced consumption of power, lower costs of maintenance etc.
due to technological progress and new research.
(a) Betterment
(b) Replacement
(c) Contract Value
(d) Market Value
(e) Depreciation
Correct Answer Betterment

Answer Explanation Betterment refers to the superior qualities of the replaced machinery such as
increased output, reduced consumption of power and lower costs of maintenance.
Betterment and Depreciation are two sides of the same coin.
QUESTIONS BASED ON

Question 63 In a Survey Report, the ‘risk’ may NOT be explained under which of the following sub
heads?
(a) Details of the construction of the property
(b) Details of affected property
(c) Details of housekeeping, number of employees
(d) Details of family members of the insured
(e) Type of exposure
Correct Answer Details of family members of the insured

Answer Explanation Details of family members of the insured need not be mentioned in the Survey
Report.
Question 64 Every surveyor and loss assessor shall maintain a register of survey work containing
the relevant information in Form _____ and shall keep the important records of the
survey for a period of ____ years.
(a) IRDA 10, 5
(b) IRDA 10, 3
(c) IRDA 11, 4
(d) IRDA 09, 5
(e) IRDA 11, 3
Correct Answer IRDA 11, 3
QUESTIONS BASED ON

Question 65 In claim payment, while doing the adjustment for ‘Deductible/Excess’ , a deductible
(or excess) clause provides that in case of loss, a specified amount expressed as
_______ , shall be deducted and the insurer will be liable only for the balance.
1. A fixed sum of money
2. A percentage of loss
3. A fixed sum not greater then Rs 10,000
(a) Only 1
(b) Only 2
(c) Only 3
(d) 1 and 2
(e) 2 and 3

Answer Explanation A deductible (or excess) clause provides that in case of loss, a specified amount
sometimes expressed as a fixed sum of money, sometimes as a percentage of loss,
shall be deducted and the insurer will be liable only for the balance.
The purpose of this clause is to reduce claims by eliminating smaller ones, where the
cost of processing the claim may be higher than claim amount.
Question 66 ________ are issued with reinstatement clause incorporated, when the sum insured
should be equal to the reinstatement value of the policy.
(a) Fire policies
(b) Marine policies
(c) Stock / merchandise policies
(d) Human life policies
Correct Answer Fire policies

Answer Explanation Under the reinstatement value clause, the damaged property is replaced by a new
property of the same type. This clause is also called the 'New for old' clause as
the insurance company is liable to pay for reinstating the damaged asset with a new
asset.
Fire policies are issued with reinstatement clause incorporated, when the sum
insured should be equal to the reinstatement value of the policy i.e. without any
deductions for depreciation of the items covered by the policy.
QUESTIONS BASED ON

Question 67 Which type of obsolescence relates to the difference in production rates and other
capability characteristics between a new item and the identical damaged item being
assessed?
(a) Economic obsolescence
(b) Functional obsolescence
(c) Financial obsolescence
(d) Constructional obsolescence
(e) Technological obsolescence
Correct Answer Functional obsolescence

Answer Explanation Functional obsolescence relates to the difference in production rates and other
capability characteristics between a new item and the identical damaged item being
assessed (say a machine with higher rate of production, lesser wastage would be
considered superior)
Question 68 Which of the following is considered as an exclusion(s) under Burglary policy- 1.Loss
of money abstracted from safe following the use of key belonging to the insured
unless such key has been obtained by assault / violence 2.Loss or damage caused by
gradual deterioration due to atmospheric conditions 3.Losses occurring when the
premises are left uninhabitated for more than 7 consecutive days and nights
(a) Only 1
(b) 1 and 2
(c) 1 and 3
(d) 2 and 3
(e) All 1, 2 and 3

Answer Explanation Loss or damage caused by gradual deterioration due to atmospheric conditions is
exclusion under Electronic Equipment policy and not under Burglary policy.
QUESTIONS BASED ON

Question 69 A person who owes something is a _____ and a person to whom something is owed
is a _____.
(a) Buyer, Negotiator
(b) Seller, Surveyor
(c) Creditor, Investigator
(d) Creditor, Debtor
(e) Debtor, Creditor
Correct Answer Debtor, Creditor

Answer Explanation Sunil sells goods to Anil on credit. Here, Anil is the debtor as he owes Sunil the
amount due and Sunil is the creditor.
Question 70 In case where damage to an insured item can be repaired, the insurance company
will pay –
1. Expenses incurred to restore the damaged machine to its former state
2. Cost of dismantling and re-erection
3. Freight to and fro from the repair shop
(a) Only 1
(b) 1 and 3
(c) 2 and 3
(d) 1 and 2
(e) All 1, 2 and 3

Answer Explanation In case where damage to an insured item can be repaired, the insurance company
will pay expenses necessarily incurred to restore the damaged machine to its former
state of serviceability plus cost of dismantling and re-erection incurred for the
purpose of effecting the repairs as well as ordinary freight to and fro from repair
shop, custom duties and dues if any , to the extent such expenses have been
included in the sum insured.
QUESTIONS BASED ON

Question 71 When an insurer plans to award a survey assignment to a surveyor, he will look for
which of the following attributes?
1. The surveyor should be well dressed
2. The surveyor should have technical competence
3. The surveyor should have knowledge of different type of policies
4. The surveyor should carry out the assignment promptly
(a) 1, 2 and 4
(b) 1, 3 and 4
(c) 2, 3 and 4
(d) 2 and 4
(e) All 1, 2, 3 and 4

Answer Explanation Every insurer looks for the following attributes in a surveyor while awarding survey
assignments –
1. Technical competence, specialization and professionalism
2. Knowledge of different types of policies
3. Promptness in carrying out the survey and submission of survey report
4. Thorough-going approach in work and clarity of expression
5. Ability to look into the intricacies of the reported claim and resolve disputes
Question 72 ______ is a book of final entry in which transactions are posted from the primary
books.
QUESTIONS BASED ON

(a) Cash book

(b) Trail balance
(c) Journal
(d) Ledger
(e) Balance sheet
Correct Answer Ledger

Answer Explanation Ledger is a book of final entry in which transactions are posted from the primary
books. Ledgers are sub-divided as :
- Personal : Sundry debtors and Sundry creditors ledger
- Impersonal : Cash book and General ledger
Question 73 Application for renewal of a surveyor’s licence has to be supported by a performance

report on survey work done during the _____ year validity period.
(a) 2
(b) 3
(c) 5
(d) 7
(e) 10
Correct Answer 5
Answer Explanation Application for renewal of a surveyor’s licence has to be supported by a performance
report on survey work done during the 5 year validity period indicating the total
number of survey and amount involved in each category of cases, year-wise and
company-wise.
QUESTIONS BASED ON

Question 74 A company insures a DG set for Rs 5 lakhs although the present replacement value of
such DG set is Rs 6 lakhs. Due to an accident, the DG sets suffers a loss of Rs 1 lakh.
What will be the amount payable to the company?
(a) Rs. 1 lakh
(b) Rs. 5 lakhs
(c) Rs. 68,777
(d) Rs. 74,555
(e) Rs. 83,333
Correct Answer Rs. 83,333

Answer Explanation This is a case of underinsurance. Therefore, the loss will be adjusted as per the
formula –
Amount payable =Sum insured X Agreed loss / Value at Risk
= 500000 x 100000 / 600000 = Rs. 83,333
Question 75 Who among the following are entitled to insure a subject?

(a) Banks and financial institution granting loans on property
(b) Receivers in bankruptcy
(c) Trustees holding legal interests
(d) Executors
Correct Answer All of the above

Answer Explanation Who all can insure is very relevant to claims settlement. Absolute owners, Trustees
holding legal interests, Executors, Administrators, Receivers in bankruptcy, Banks
and financial institution granting loans on property, etc. are entitled to insure the
subject.
QUESTIONS BASED ON

Question 76 Which of these can be considered as a factor responsible for the misconception that
the insurer will try to avoid or reduce the claim and the surveyor generally takes
decisions to the advantage of the insurer?
1. Contractual, legal language of the insurance policy and the lack of interest of the
insured to read the policy
2. Nature and conduct of the insured
3. Surveyors limitations, nature and attitude
(a) Only 2
(b) Only 1
(c) Only 3
(d) 1 and 2
(e) All 1, 2 and 3

Answer Explanation The causative factors responsible for the misconception that insurer will try to avoid,
delay or reduce the claim and the surveyor is biased and will take decisions to the
advantage of the insurer are –
1. Contractual, legal language of the insurance policy and the lack of interest of the
insured to read the policy
2. Nature and conduct of the insured
3. Business expediency of the insurer
4. Business expediency of the third parties involved like repair agencies, hospitals
etc.
5. Surveyor’s limitations, nature and attitude
Question 77 The inspection of the premises after a fire assumes importance in cases of _____
damages to multiple articles.
QUESTIONS BASED ON

(a) Complete
(b) Periphery
(c) Visual
(d) Uniform
(e) Non uniform
Correct Answer Non uniform

Answer Explanation The inspection of the premises after a fire assumes importance in cases of non-
uniform damages to multiple articles. The surveyor has to minutely check the
different degree of damages to various articles.
Sometimes there is total destruction and only ashes remain. In such cases, chemical
analysis has to be done to identify the materials burnt.
Question 78 In case the salvage is disposed off using the sale by advertised tender route and the
highest bidder after bidding and its acceptance changes his mind, the sellers can
exercise their right by _____ the bidders deposit.
(a) Forfeiting
(b) Returning
(c) Investing
(d) Reimbursing
(e) Deducting
Correct Answer Forfeiting

Answer Explanation As per the ‘Forfeiture of Deposit Clause’ the sellers exercise their right by forfeiting
the bidders deposit if the bidder does not meet with is commitment.
QUESTIONS BASED ON

Question 79 For what type of losses is an inventory of affected items prepared during inspection
and segregation, recording the groups of damaged, undamaged and partially
damaged items in an orderly manner?
(a) Marine losses
(b) Fire losses
(c) Miscellaneous losses
(d) Motor losses
(e) Engineering losses
Correct Answer Fire losses

Answer Explanation In Fire Losses, generally an inventory prepared of all affected items is prepared
during inspection and segregation, recording the groups of damaged, undamaged
and partially damaged (with their qualitative status) items in an orderly manner.
Question 80 On cancellation of license, a surveyor or loss assessor shall not be eligible for having
a license to act for a period of next ____ years.
(a) 2
(b) 3
(c) 4
(d) 5
(e) 7
Correct Answer 3
Answer Explanation Any surveyor or loss assessor whose license has been cancelled shall not be eligible
for having a license to act as a Surveyor or Loss Assessor for a period of three years
from the date on which the cancellation is notified in the official gazette.
QUESTIONS BASED ON

Question 81 The principal factor(s) taken into consideration for adjusting the assesses gross loss
is/are –
1. Salvage recovery
2. Depreciation / improvement or betterment
3. Excess / franchise limit
(a) Only 1
(b) Only 3
(c) 1 and 2
(d) 2 and 3
(e) All 1,2 and 3
Correct Answer All 1,2 and 3

Answer Explanation The principal factors taken into consideration for adjusting the assesses gross loss
are –
1. Salvage recovery
2. Depreciation / improvement or betterment
3. Excess / franchise limit
4. Under insurance / application of average clause
Question 82 While making adjustments for calculating a claim, if the damaged property is
replaced by a better or identical new property, it is necessary to deduct from the cost
of replacing an amount which reflects the _______ that the property has suffered.
(a) Appreciation
(b) Depreciation
(c) Value
(d) Betterment
(e) Market value
Correct Answer Depreciation

Answer Explanation An insurance policy is an indemnity contract, so the amount of money payable to the
claimant should reflect its value at the time of loss, nothing more nothing less.
Hence, if the damaged property is replaced by a better or identical new property, it is
necessary to deduct from the cost of replacing an amount which reflects the
depreciation that the property has suffered.
QUESTIONS BASED ON

Question 83 For claims under the _______ policy, the damages attributable to gradual
deterioration due to atmospheric conditions, rusting is non-admissible.
(a) All risks
(b) Marine ICC ‘A’
(c) Erection
(d) Storage cum Erection
(e) Marine (Inland Transit) B
Correct Answer Storage cum Erection

Answer Explanation As per a practical example, analysis of the exclusion of the Storage Cum Erection
policy revealed that ‘damages attributable to gradual deterioration due to
atmospheric conditions, rusting’ is non-admissible.
Question 84 In ________ , the value of the items covered by the policies are agreed in advance
between the insured and the insurer, which is reflected as the sum insured in the
policies.
(a) Valued polices
(b) Reinstatement policies
(c) Market value policies
(d) Fire polices
(e) Plant and machinery policies
Correct Answer Valued polices

Answer Explanation In Valued polices, the value of the items covered by the policies is agreed in advance
between the insured and the insurer, which is reflected as the sum insured in the
policies.
Marine insurance policies are valued polices. In the event of total loss the agreed
sum insured is paid.
QUESTIONS BASED ON

Question 85 In accounting, what is the golden rule for Nominal accounts?

(a) Debit all losses and credit all gains
(b) Debit what comes in and credit what goes out
(c) Credit what comes in and debit what goes out
(d) Debit the receiver and credit the giver
(e) Credit all losses and debit all gains
Correct Answer Debit all losses and credit all gains

Answer Explanation Nominal accounts are accounts related to gains and losses. The golden rule for
Nominal accounts are Debit all losses and expenses and Credit all gains and incomes.
Question 86 In case of marine claims, as the policy is a valued one, except for adjustment of
______, no other factors are applicable.
(a) Depreciation
(b) Betterment
(c) Sum assured
(d) Premium
(e) Salvage recovery
Correct Answer Salvage recovery

Answer Explanation In case of marine claims, as the policy is a valued one, except for adjustment of
salvage recovery, no other factors are applicable. The net claim, therefore is arrived
at, by reducing the assessed gross loss, the amount of agreed salvage recovery.
QUESTIONS BASED ON

Question 87 In Machinery Insurance policy, the loss, damage and/or liability due to faults or
defects existing at the time of commencement of the policy and known to the
insured but not disclosed to the insurer is treated as ________.
(a) Exclusion
(b) Inclusion
(c) Proportionally related
(d) Addition
(e) Cavet Emptor
Correct Answer Exclusion

Answer Explanation In Machinery Insurance policy, the loss, damage and/or liability due to faults or
defects existing at the time of commencement of the policy and known to the
insured but not disclosed to the insurer is treated as exclusion.
Question 88 As per the golden rule of accounting, for Real Accounts, ____ what comes in and
_____ what goes out.
(a) Appreciate , Depreciate
(b) Depreciate , Appreciate
(c) Credit , Debit
(d) Debit , Credit
(e) Credit, Credit
Correct Answer Debit , Credit

Answer Explanation Accounting Rule for Real Accounts – Debit what comes in and Credit what goes out.
For eg – Transaction - Bought furniture by paying cash. In this, Furniture Account will
be debited and Cash Account will be credited.
QUESTIONS BASED ON

Question 89 Which of these issue(s) should be examined by the surveyor for confirmation of
admissibility of the claim?
1. Verification of policy contents
2. Verification of multiple coverage by different policies
3. Verification of character certificate of the insured
4. Operation of exclusions
(a) Only 1
(b) 2 and 3
(c) 2 and 4
(d) 1, 2 and 4
(e) 1, 3 and 4

Answer Explanation The issues that a surveyor needs to examine for confirmation of admissibility of the
claim can be broadly grouped as follows –
a. Verification of policy contents / intended coverage
b. Verification of multiple coverage by different policies
c. Insurable interest
d. Proximate cause of loss
e. Operation of exclusions
f. Examinations of warranties
QUESTIONS BASED ON

Question 90 In case of marine losses, where local wetting has occurred, a test for ________ may
help to prove presence or otherwise of seawater.
(a) Sulphur
(b) Chlorides
(c) Magnesium
(d) Bacteria
(e) Fungus
Correct Answer Chlorides

Answer Explanation Where local wetting has occurred, a test for chlorides may help to prove presence or
otherwise of seawater. If the test for seawater is negative, this could mean that the
goods were damp/wet before they were loaded on the ship.
Question 91 In case the insured himself sells the salvage, he will retain the money received and
_____ the amount against the loss, after deducting the necessary cost of selling.
(a) debit
(b) credit
(c) add
(d) proportionate
(e) Average
Correct Answer credit

Answer Explanation In case the salvage is disposed by the insured himself, he will retain the money
received and credit the amount, less any necessary cost of selling, against his loss.
QUESTIONS BASED ON

Question 92 Indemnity _____ bear relation to the sum insured.

(a) Does
(b) Does not necessarily
(c) Has no direct
(d) Averagely
(e) Significantly
Correct Answer Does not

Answer Explanation Indemnity does not necessarily bear any relation to the sum insured which is merely
the maximum limit up to which the insurer can be called upto pay and is the amount
on which the premium is calculated.
Question 93 The responsibility of specifying the ______ rests with the insured and insurers
accordingly fix the premium.
(a) Actual value
(b) Market value
(c) Total cost
(d) Sum insured
(e) Written down or depreciated value
Correct Answer Sum insured

Answer Explanation The responsibility of specifying the sum insured rests with the insured and insurers
accordingly fix the premium by charging a percentage rate on such declared amount .
QUESTIONS BASED ON

Question 94 The objective of the ______ clause is to penalize underinsurance by a corresponding

underpayment of claim.
(a) Contribution
(b) Excess
(c) Average
(d) Medium
(e) Good faith
Correct Answer Average

Answer Explanation Many insured’s underinsure i.e. the sum insured is less than value at risk, to effect
savings in premium. The ‘Average’ clause has been devised to prevent such practices
of underinsuring. The objective of the average clause is to penalize underinsurance
by a corresponding underpayment of claim.
Question 95 Which are the two important conditions on sale of salvage by tender system?
(a) Sale is on ‘As is, where is’ basis and ‘Forefeiture of Deposit Clause’
(b) Sale is on ‘Here is, there is’ basis and ‘Forefeiture of Sale Clause’
(c) Sale is on ‘Money is, Stock is’ basis and ‘Forefeiture of Signed Clause’
(d) Sale is on ‘Money is, Stock is’ basis and ‘Forefeiture of Sale Clause’
(e) Sale is on ‘As is, where is’ basis and ‘Forefeiture of Signed Clause’
Correct Answer Sale is on ‘As is, where is’ basis and ‘Forefeiture of Deposit Clause’
Answer Explanation The two important conditions on sale of salvage by tender system are –
1. The sale of salvage is on ‘As is, where is’ basis. The prospective buyers who
inspect the salvage before the actual sale are given as much information as possible.
This gives no scope for any misunderstanding which may have an effect of nullifying
the sale
2. The second feature is the ‘Forfeiture of Deposit clause’. Sometimes the highest
bidder may change his mind. The seller exercises their right by forfeiting the
bidders deposit if the bidder does not meet with his commitment.
QUESTIONS BASED ON

Question 96 How is the quantity decided in case of total loss of cotton bales due to fire?
(a) As per the stock book records
(b) As per store managers statements
(c) As per the weight of the ash left
(d) As per volumetric measurements
(e) As per hoop iron weight from debris
Correct Answer As per hoop iron weight from debris

Answer Explanation Hoop irons are the flattened iron strips that are used to pack the cotton bales. When
nothing of the cotton is left due to fire, cotton bale quantification is generally
ascertained by taking the hoop iron weight from the debris and calculations are
accordingly made.
Question 97 One of the qualities required by a surveyor to carry out the difficult role effectively is
_____, which enables him to deal naturally with other persons so that the maximum
degree of cooperation is obtained.
(a) Investigation skill
(b) Negotiation skill
(c) Politeness
(d) Sharpness
(e) Tact
Correct Answer Tact

Answer Explanation Tact is a quality of mind which enables its possessor to deal naturally with other
persons so that the maximum degree of cooperation is obtained.
QUESTIONS BASED ON

Question 98 In the case of Marine Cargo policy, the insurable interest must exist ____ .
(a) During the currency of the policy
(b) After the currency of the policy
(c) At the time of loss
(d) Both b and c
(e) None of the above
Correct Answer At the time of loss

Answer Explanation Generally speaking, insurable interest must exist during the currency of the policy,
but in case of marine cargo policy, the insurable interest must exist at the time of
loss.
Question 99 In case the insured decides to retain the salvage then a value is fixed by the _____
and the amount is adjusted in the claim.
(a) Insured himself
(b) Industry expert
(c) Actuary
(d) Underwriter
(e) Surveyor
Correct Answer Surveyor

Answer Explanation Under various method of disposal of salvage, sometimes the insured may decide to
retain the salvage in which case a value is fixed on the salvage by the surveyor and
the amount is adjusted in the claim. In other words, the claim is paid ‘net’ of salvage.
QUESTIONS BASED ON

Question 100 A businessman has the following policies covering stocks: Policy A for 800000; Policy
B for 1000000; Policy C for 200000. The stocks to the tune of 200000 are damaged
due to rioters. What is the claim payable under policy A?
(a) Rs.200000
(b) Rs.100000
(c) Rs.80000
(d) Rs.65000
(e) NIL
Correct Answer Rs.80000

Answer Explanation As per the Contribution Clause, each company would pay claim in the same
proportion in which insurance has been taken by the customer.
Total Insurance taken is for Rs. 8 lakhs plus Rs. 10 lakhs plus Rs. 2 lakhs = Rs. 20 Lacs.
Share of Company A = 8 Lacs / 20 Lacs = 40%
Hence, company A would pay 40% of the loss amount i.e. 40% of Rs 2 lakhs = Rs.
80000
QUESTIONS BASED ON

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IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

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IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

QUESTIONS BASED ON ‘SURVEY AND LOSS ASSESSMENT’

Correct Answer Trading claimant

Correct Answer Insurer

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

Correct Answer All 1, 2 and 3

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

Question 5 How are machinery values ordinarily determined?

Correct Answer Replacement cost less allowance for depreciation

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

Correct Answer All 1, 2 and 3

Correct Answer All 1, 2 and 3

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

Correct Answer 1, 3 and 4

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

(a) Habitual claimant

Correct Answer Habitual claimant

Correct Answer 2 and 3

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

Correct Answer 4. Contribution

Correct Answer 2 and 3

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

Correct Answer Valuation certificate

Question 15 Which of this is NOT a method of valuation to depreciate an asset?

Correct Answer Inverted curve method

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

(a) ‘Named Risk’ policy

Correct Answer ‘All Risk’ policy

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

Correct Answer Legal, tangible

Correct Answer Perishable nature

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

Correct Answer On the spot

Correct Answer Express

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

Correct Answer Technological obsolescence

Correct Answer Segregation

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

Question 24 Which of these is / are Non-Interest based method of valuation to depreciate on

Correct Answer Only 1

Correct Answer All Risk

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

Question 26 Which of these are treated as exclusions in Marine Cargo policies?

Correct Answer All 1, 2 and 3

Question 27 In India, professional recognition of an insurance surveyor was an implied one,

Correct Answer Sec. 64 UM

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

Correct Answer Book keeping

Correct Answer 1, 3 and 4

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

Correct Answer Insurable interest

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

Correct Answer Warranty

Correct Answer Appropriate coverage

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

Correct Answer Plus

Correct Answer 19 (b)

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE

Correct Answer Liabilities, Assets

Correct Answer Buildings

IC S01 – PRINCIPLES AND PRACTICE OF INSURANCE