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Introduction To Insurance Question Paper
Introduction To Insurance
Course:Bachelor Of Arts
Institution: Kenyatta University question papers
Exam Year:2011
KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2010/2011
OPEN, DISTANCE AND E-LEARNINGEXAMINATION FOR THE DEGREE OF
BACHELOR OF ECONOMICS, BACHELOR OF ARTS AND BACHELOR OF
EDUCATION (ARTS)
BMS 101: INTRODUCTION TO INSURANCE
DATE:
Tuesday 1st February 2011
TIME: 8.00a.m -10.00a.m
INSTRUCTIONS
? Attempt question one (COMPULSORY) and any other TWO
? Start each question a new page
? Marks are awarded for proper explanation and use appropriate examples.
QUESTION ONE
a)
Safari Bus Company of Isibania operates a fleet of buses plying both Nairobi and
International routes (Isibania-Kisii- Nakuru, Nairobi, Mombasa) and (Isibania-
Mwanza, TZ/ Isibania-Malaba, UG) respectively. Over the past five years, the
company’s insurance premiums have been souring high, because of what
Kikulacho Insurance Company’s technical manager explains as the company’s
poor claims history. Over this period, 20 of the company’s strong fleet of 50
buses have been involved in fatal accidents, while 30 or so minor claims have
been lodged with the insurers. In desperation the company has created a position
for an Insurance Manager with its ranks and has hired you as the new manager to
immediately reduce the frequency and severity of losses thereby improving the
general claims history of the company. Propose an action plan for the company
that embraces all risk exposures currently faced by Safari Bus Company Ltd.
[14marks]
Page 1 of 2
b)
Define the following insurance terminologies:-
i)
Insurable interest
[2marks]
ii)
Uncertainty
[2marks]
iii)
Peril
[2marks]
iv)
Risk identification
[2marks]
v)
Premium loading
[2marks]
[10marks]
c)
Discuss the requisites of insurability in the modern insurance practice
[6marks]
TOTAL (30 MARKS]
QUESTION TWO
a)
Explain the purpose and the intention of the principle of subrogation, clearly
justifying how it fits in the insurance practice.
[10marks]
b)
Briefly discuss briefly the types of liability insurance covers offered by insurers in
Kenya.
[10marks]
TOTAL (20 MARKS]
QUESTION THREE
a)
Discuss the concept of risk.
[5marks]
b)
In common business conversations, how is the word risk used?
[5marks]
c)
Discuss the classification of risk.
[10marks]
TOTAL (20 MARKS]
QUESTION FOUR
Risk protection, mitigation or reduction is very important in any economic endeavor. In
the light of the above, discuss the social-economic benefits of insurance. [20marks]
TOTAL (20 MARKS)
Page 2 of 2
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