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Buss 324: Insurance Practice Question Paper

Buss 324: Insurance Practice

Course:Insurance Practice

Institution: Kenya Methodist University question papers

Exam Year:2008

KENYA METHODIST UNIVERSITY

END OF SECOND TRIMESTER 2008 EXAMINATIONS

FACULTY : BUSINESS AND MANAGEMENT STUDIES
DEPARTEMENT : BUSINESS ADMINISTRATION
COURSE CODE : BUSS 324
COURSE TITLE : INSURANCE PRACTICE
TIME : 2 HOURS

INSTRUCTIONS:
• Answer Question ONE (Compulsory) and any other TWO Questions

Question 1
(a) Underwriting is the process where by risks are accepted or rejected. Does this statement state the purpose of underwriting? Discuss (10 marks)

(b) Although much insurance business in Kenya is domestic a significant proportion is worldwide. Giving examples when can insurance be described as international.
(5 marks)

(c) Risk is certainly used frequently in every day conversation and seems to be well understood by those using it. “Risk can be termed as the essence of insurance” discuss.
(10 marks)

(d) Identify the merits and demerits of self insurance. (5 marks)

Question 2
(a) Explain in detail the three fold nature of risk management in the insurance sector.
(10 marks)

(b) Discuss the importance of insurance citing why individuals and commercial holdings need to undertake it. (10 marks)

Question 3
(a) Examine the characteristics of insurable risks. (10marks)

(b) The contract of insurance is distinct in comparison with other business contracts. Identify the distinction giving appropriate examples (10 marks)

Question 4
(a) Write brief notes on the following
(i) Utility theory
(ii) Law of large numbers
(iii) Exceptions
(iv) Hazard
(v) Preamble (10 marks)

(b) When setting up the premium, it is not simply a matter of calculating it by a mathematical formula. Care should be taken to ensure that it covers some considerations which also need to be borne in mind. Discuss giving examples where relevant (10 marks)

Question 5
(a) Explain in detail the claim settlement procedure (10 marks)

(b) Government has certainly taken more than a passing interest in the transaction of insurance. Why should this be so? Discuss (10 marks)

Buss 324: Insurance Practice Question Paper

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