Principles of Insurance Questions

Faculty of Economics and Management Science (FEMS)

Semester: Resit

Level: 200

Year: 2019

Instructions: answer questions 1, 2, 5 and any other one question.

Question one (20 marks)

SANCO insurance company based in Bamenda is a property insurer that entered a surplus

share reinsurance treaty with SABGA Reinsurance Company. SANCO Reinsurance

Company had retention of 400,000FCFA pm a single building and up six lines of insurance

may be ceded to SABGA Reinsurance Company. The building was valued at

1,500,000FCFA, after six months of issuing the policy; the policyholder presented a claim of

600,000FCFA to SANCO insurers.

1) You are required as a loss adjuster to determine the following:

a) The liability of SANCO insurer

b) The liability of SABGA reinsurer.

2) What is the maximum amount of insurance SANCO can accept on a single building?

Explain your answer.

Question 2 (20 marks)

The regulation of insurance business is of paramount concern of the government in any

developing economy.

1) What are the reasons for government regulation of insurance business in Cameroon?

2) Itemize and explain at least four reasons.

Question 3 (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 4 (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 5 (20 marks)

Mr. Efe insured his new SUV car worth 5,000,000F against fire for 3,000,000F. After three

months, Mr. Efe incurred loss of 800,000F because of partial fire accident on his car.

1) Determine how much Mr. Efe is entitled to receive from his insurer.

2) Give your professional advice to Mr. Efe.

THE UNIVERSITY OF BAMENDA

FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES

Resit Course: Principles of Insurance: FINA201

Credit Value:

Course Lecturers:

Time: Course Status: Date:

Venue: Instruction:

www.schoolfaqs.net