Principles of Insurance Questions

Higher Institute of Commerce and Management (HICM)

Semester: First Semester

Level: 200

Year: 2014

UNIVERSITY OF BAMENDA

HIGHER INSTITUTE OF COMMERCE AND MANAGEMENT (HICM)

First Semester Examination 2013/2014 Session Level 100

Course: Principles of insurance

Time duration: 3 hours

Course instructor: Uzor Emmanuel.E

Instructions: attempt all

Question I: Equity insurance company had a surplus share treaty arrangement with some cartapillar reinsurance

companies. Equity insurance company had a retention limit of 85,000frs. The arrangement was in 5 lines for the

first reinsurer, 4 lines for the second reinsurer, 2 lines for the third reinsurer. The premium rate is 5% and equity

insurance company obtained a business valued at 400,000 FRS on their fire insurance account. The policyholder

placed a claim of 200,OOOfrs. As a loss assessor in the making, you are required to calculate the following:

The ceding office rights and liability

The rights and liabilities of the reinsurers

Presentation of your work in a tabular form after showing your workings.(15 marks)

Question 2: Mr Song insured his car against fire damage with the following insurance companies:

Premier insurance company for 250,OOOfrs

Equity insurance company for 200,OOOfrs

Union insurance company for 220,000frs

4. Uzor insurance company for 150,000 FRS against theft. And mr Song's car was burnt partially by fire

which will cost him 100,000frs to repair. As a loss assessor in the making, you are required to

calculate the liabilities of the parties involved. And give your advice to the policyholder. (15 marks)

Question 3: itemize and explain any four symptoms facing the insurance development in Cameroon,

and state your recommendations to the symptoms.(30 marks)

Question 4: underinsurance is a serious problem and to the detriment of the policyholder. With the help of

average clause, calculate the liability of the insurer and the of the insured with the help of the following

information: Eto insured his car valued at 5,000,000frs against fire for 3,000,000frs and he sustained a loss of

150,000frs as a result of fire damage. (10 marks)

GOODLUCK AND GOD BLESS U

www.schoolfaqs.net