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Bms 101: Introduction To Insurance Question Paper

Bms 101: Introduction To Insurance

Course:Bachelor Of Commerce

Institution: Kenyatta University question papers

Exam Year:2016

KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2015/2016
SECOND SEMESTER EXAMINATION FOR THE DEGREE OF BACHELOR OF
COMMERCE

BMS 101: INTRODUCTION TO INSURANCE

DATE: Tuesday, 5th April 2016 TIME: 2 HOURS

INTRODUCTIONS:

Answer question one (Compulsory) and other TWO

1. (a) Define the following terms:

(i) Peril
(ii) Hazard
(iii) Underwriting
(iv) Risk management
(8 marks)

(b) Andrew owns a gun shop in a high crime rate area. The store does not have a camera surveillance system. The high cost of burglary and theft insurance has substantially reduced his profits. A risk management consultant point out that several methods other than insurance can be used to handle the burglary and theft exposure. Identify and explain two non – insurance methods that could be used to deal with the burglary and theft exposure.
(4 marks)

(c) Explain the difference between pure risk and speculative risk, citing relevant examples.
(4 marks)
(d) Explain any six key factors used in life insurance underwriting process.

(6 marks)
(e) Describe the steps involved in the risk management process.
(8 marks)

2. a) (i) Explain the meaning of insurable interest as used in insurance.
(2 marks)

(ii) Explain three purposes of an insurable interest in an insurance contract.
(3 marks)
(b) Explain four exceptional to the principle of indemnity.
(4 marks)

(c) Explain any five factors that have created the increased demand for insurance.
(5 marks)

(d) Describe the major social and economic burdens of risk on the society.
(6 marks)

3. (a) Describe the basic requirements for the formation of a valid insurance contract.
(10 marks)
(b) Explain any four essentials of the doctrine of subrogation.
(4 marks)
(c) Discuss the various types of policies under motor vehicle insurance.
(6 marks)

4. (a) Briefly discuss the structure of insurance market, clearly depicting the roles played by the various players in it.
(10 marks)

(b) Explain the functions of insurance to the public.

(10 marks)

Bms 101: Introduction To Insurance Question Paper

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