Principles of Insurance (FINA201)
Faculty of Economics and Management Science (FEMS)
Semester: First Semester
Level: 200
Year: 2019
Instructions; answer questions 1, 4, 5 and any other one question
Question one (10 marks)
The regulation of insurance business is of paramount concern of the government in any
developing economy. What are the reasons for government regulation of insurance business
in Cameroon? Itemize and explain at least four reasons.
Question two (10 marks)
Man is said to be a bundle of risks. As an insurer in the making, what are some of the
available techniques or arsenals to be employed in battling those risks?
Question three (10 marks)
For a contract of insurance to be legally recognized, there are some characteristics or
ingredients to be met. Judiciously itemize and explain at least four of it.
Question four (20 marks)
Mr. Efe insured his new SUV car worth 5million FCFA against fire for 3 million FCFA.
After three months, Mr. Efe incurred loss of 800,000FCFA as a result of partial fire accident
on his car. How would he receive from the insurance company?
Question five (20 marks)
Equity insurance company had a surplus share treaty arrangement with some caterpillar
reinsurance companies. Equity insurance company had a retention limit of 85,000FCFA. The
arrangement was 5 lines for the first reinsurer, 4 lines for the second reinsurer and 2 lines for
the third reinsurer. The premium rate is 5% and equity insurance company obtained a
business valued at 400,000F on their fire insurance account. The policyholder placed a claim
of 200,000F. As a loss assessor in the making, you are required to calculate the following;
1) The ceding office right and liability
2) The rights and liabilities of the reinsurers
Presentation of your work in a tabular form after showing your workings.
THE UNIVERSITY OF BAMENDA
FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES
Semester Exam Course: Principles of Insurance: FINA201
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