Question 1

Insurance risk refers to the risk that:

Accepted Answer

A) a lot of policyholders make claims. 
B) the insurance market is saturated and thus the insurance companies cannot write additional policies. 
C) individuals and companies are over-insured leading to high liability values in insurance companies. 
D) actual policy liabilities turn out to be higher than provisions or reserves for policy liabilities. 
A) a lot of policyholders make claims. 
B) the insurance market is saturated and thus the insurance companies cannot write additional policies. 
C) individuals and companies are over-insured leading to high liability values in insurance companies. 
D) actual policy liabilities turn out to be higher than provisions or reserves for policy liabilities. D

Question 2

Which of the following statements is true?

Accepted Answer

A) Measuring and managing credit and interest rate risk are key concerns of general insurance managers. 
B) If pure losses, underwriting losses and other costs are higher and investment yields lower than expected, general insurers suffer a significant amount of deficit reserves. 
C) On average, underwriting cycles measured from peak to peak can last anywhere from 12 to 20 years. 
D) Measuring and managing credit and interest rate risk are key concerns of general insurance managers and if pure losses, underwriting losses and other costs are higher and investment yields lower than expected, general insurers suffer a significant amount of deficit reserves. 
A) Measuring and managing credit and interest rate risk are key concerns of general insurance managers. 
B) If pure losses, underwriting losses and other costs are higher and investment yields lower than expected, general insurers suffer a significant amount of deficit reserves. 
C) On average, underwriting cycles measured from peak to peak can last anywhere from 12 to 20 years. 
D) Measuring and managing credit and interest rate risk are key concerns of general insurance managers and if pure losses, underwriting losses and other costs are higher and investment yields lower than expected, general insurers suffer a significant amount of deficit reserves. A

Question 3

While insurance companies are exposed to credit, operational and investment risk, there is no direct regulation for these risks set out by APRA.

Accepted Answer

A) True 
 B)False  True

Question 4

Loans on policy are loans made by insurance companies to its policy holders using their policies as collateral.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is true?

Accepted Answer

A) Ordinary life insurance involves policies marketed on an individual basis, on which policyholders make periodic premium payments. 
B) Ordinary life insurance involves policies marketed on an individual basis, on which policyholders make a lump sum payment at maturity of the policy. 
C) Ordinary life insurance involves policies marketed on an individual basis, on which policyholders receive periodic premium payments. 
D) Ordinary life insurance involves policies marketed on an individual basis, on which policyholders receive a lump sum payment at maturity of the policy. 
A) Ordinary life insurance involves policies marketed on an individual basis, on which policyholders make periodic premium payments. 
B) Ordinary life insurance involves policies marketed on an individual basis, on which policyholders make a lump sum payment at maturity of the policy. 
C) Ordinary life insurance involves policies marketed on an individual basis, on which policyholders receive periodic premium payments. 
D) Ordinary life insurance involves policies marketed on an individual basis, on which policyholders receive a lump sum payment at maturity of the policy.

Question 6

In general, the maximum levels of losses are less predictable for property lines than liability lines.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements is true?

Accepted Answer

A) A whole of life insurance has no savings element attached to it. 
B) Unlike term insurance, in the case of whole of life insurance there is uncertainty regarding a payout by the insurer. 
C) A whole of life insurance protects the holder over their entire life. 
D) All of the listed options are correct. 
A) A whole of life insurance has no savings element attached to it. 
B) Unlike term insurance, in the case of whole of life insurance there is uncertainty regarding a payout by the insurer. 
C) A whole of life insurance protects the holder over their entire life. 
D) All of the listed options are correct.

Question 8

The primary function of insurance companies is to:

Accepted Answer

A) generate fees for the banks that sell insurance products. 
B) sell a variety of consumer investment products. 
C) protect policyholders from adverse events. 
D) assist in the transfer of wealth into the future. 
A) generate fees for the banks that sell insurance products. 
B) sell a variety of consumer investment products. 
C) protect policyholders from adverse events. 
D) assist in the transfer of wealth into the future.

Question 9

Superannuation funds manage funds saved throughout an employee's working life with the aim of providing the employee with a retirement income.

Accepted Answer

A) True 
 B)False

Question 10

SOARS stands for Supervisory Oversight and Regulations System.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements is true?

Accepted Answer

A) Net asset value refers to the book value of assets in a managed fund portfolio divided by the number of shares outstanding. 
B) Net asset value refers to the book value of assets in a managed fund portfolio multiplied by the number of shares outstanding. 
C) Net asset value refers to the market value of assets in a managed fund portfolio multiplied by the number of shares outstanding. 
D) None of the listed options are correct. 
A) Net asset value refers to the book value of assets in a managed fund portfolio divided by the number of shares outstanding. 
B) Net asset value refers to the book value of assets in a managed fund portfolio multiplied by the number of shares outstanding. 
C) Net asset value refers to the market value of assets in a managed fund portfolio multiplied by the number of shares outstanding. 
D) None of the listed options are correct.

Question 12

Pure insurance companies are exposed to a single risk only, this being insurance risk.

Accepted Answer

A) True 
 B)False

Question 13

Insurance policy benefits are classified on an insurance company's balance sheet as:

Accepted Answer

A) liabilities, because the insurance company may have to pay out the benefits. 
B) assets, because policy benefits are valuable to the company. 
C) liabilities, because customers may fall behind on their premium payments. 
D) assets, because policy benefits are fully covered by premium payments. 
A) liabilities, because the insurance company may have to pay out the benefits. 
B) assets, because policy benefits are valuable to the company. 
C) liabilities, because customers may fall behind on their premium payments. 
D) assets, because policy benefits are fully covered by premium payments.

Question 14

Which of the following statements is true with regard to the regulation of money market corporations?

Accepted Answer

A) Money market corporations are unregulated. 
B) APRA is the primary regulator for money market corporations. 
C) ASIC is the primary regulator for money market corporations. 
D) The ACCC is the primary regulator for money market corporations. 
A) Money market corporations are unregulated. 
B) APRA is the primary regulator for money market corporations. 
C) ASIC is the primary regulator for money market corporations. 
D) The ACCC is the primary regulator for money market corporations.

Question 15

Which of the following statements is true?

Accepted Answer

A) PAIRS is the basis of APRA's risk-based approach to supervision. 
B) PAIRS is an internal rating system for scoring each entity in the regulated population of insurance and superannuation entities. 
C) Due to PAIRS, APRA's supervision can be tailored to the risk profile of an individual entity. 
D) All of the listed options are correct. 
A) PAIRS is the basis of APRA's risk-based approach to supervision. 
B) PAIRS is an internal rating system for scoring each entity in the regulated population of insurance and superannuation entities. 
C) Due to PAIRS, APRA's supervision can be tailored to the risk profile of an individual entity. 
D) All of the listed options are correct.

Question 16

Insurance policy benefits are classified on an insurance company's balance sheet as:

Accepted Answer

A) liabilities, because the insurance company may have to pay out the benefits. 
B) assets, because policy benefits are valuable to the company. 
C) liabilities, because customers may fall behind on their premium payments. 
D) assets, because policy benefits are fully covered by premium payments. 
A) liabilities, because the insurance company may have to pay out the benefits. 
B) assets, because policy benefits are valuable to the company. 
C) liabilities, because customers may fall behind on their premium payments. 
D) assets, because policy benefits are fully covered by premium payments.

Question 17

Outline and briefly explain the different classes of life insurance as set out in the Life Insurance Act 1995.

Accepted Answer

There are two basic classes of life insu

Question 18

Which of the following are basic life insurance contract types?

Accepted Answer

A) terminating insurance 
B) whole of life 
C) bundled life insurance 
D) terminating insurance and whole of life 
A) terminating insurance 
B) whole of life 
C) bundled life insurance 
D) terminating insurance and whole of life

Question 19

Which of the following statements is true?

Accepted Answer

A) A term insurance policy has no savings element attached to it. 
B) The maximum term of a term life insurance is 20 years. 
C) The minimum term of a term life insurance is 5 years. 
D) A term insurance policy has no savings element attached to it and the maximum term of a term life insurance is 20 years. 
A) A term insurance policy has no savings element attached to it. 
B) The maximum term of a term life insurance is 20 years. 
C) The minimum term of a term life insurance is 5 years. 
D) A term insurance policy has no savings element attached to it and the maximum term of a term life insurance is 20 years.

Question 20

Which of the following are typical products offered by general insurance companies?

Accepted Answer

A) superannuation funds 
B) life insurance policies 
C) professional indemnity insurance 
D) superannuation funds and professional indemnity insurance 
A) superannuation funds 
B) life insurance policies 
C) professional indemnity insurance 
D) superannuation funds and professional indemnity insurance

Insurance risk refers to the risk that:

Which of the following statements is true?

While insurance companies are exposed to credit, operational and investment risk, there is no direct regulation for these risks set out by APRA.

Loans on policy are loans made by insurance companies to its policy holders using their policies as collateral.

Which of the following statements is true?

In general, the maximum levels of losses are less predictable for property lines than liability lines.

Which of the following statements is true?

The primary function of insurance companies is to:

Superannuation funds manage funds saved throughout an employee's working life with the aim of providing the employee with a retirement income.

SOARS stands for Supervisory Oversight and Regulations System.

Which of the following statements is true?

Pure insurance companies are exposed to a single risk only, this being insurance risk.

Insurance policy benefits are classified on an insurance company's balance sheet as:

Which of the following statements is true with regard to the regulation of money market corporations?

Which of the following statements is true?

Insurance policy benefits are classified on an insurance company's balance sheet as:

Outline and briefly explain the different classes of life insurance as set out in the Life Insurance Act 1995.

Which of the following are basic life insurance contract types?

Which of the following statements is true?

Which of the following are typical products offered by general insurance companies?

Why Are Financial Institutions Special

The Financial Services Industry: Depository Institutions

Risk of Financial Institutions

Interest Rate Risk Measurement: The Repricing Model

Interest Rate Risk Measurement: The Duration Model

Managing Interest Rate Risk Using Off Balance Sheet Instruments

Credit Risk I: Individual Loan Risk

Market Risk

Credit Risk I: Individual Loan Risk

Credit Risk II: Loan Portfolio and Concentration Risk

Sovereign Risk

Foreign Exchange Risk

Liquidity Risk

Liability and Liquidity Management

Off-Balance-Sheet Activities

Technology and Other Operational Risk

Capital Management and Adequacy

Filters

Exam 3: The Financial Services Industry: Other Financial Institutions

Insurance risk refers to the risk that:

Which of the following statements is true?

While insurance companies are exposed to credit, operational and investment risk, there is no direct regulation for these risks set out by APRA.

Loans on policy are loans made by insurance companies to its policy holders using their policies as collateral.

Which of the following statements is true?

In general, the maximum levels of losses are less predictable for property lines than liability lines.

Which of the following statements is true?

The primary function of insurance companies is to:

Superannuation funds manage funds saved throughout an employee's working life with the aim of providing the employee with a retirement income.

SOARS stands for Supervisory Oversight and Regulations System.

Which of the following statements is true?

Pure insurance companies are exposed to a single risk only, this being insurance risk.

Insurance policy benefits are classified on an insurance company's balance sheet as:

Which of the following statements is true with regard to the regulation of money market corporations?

Which of the following statements is true?

Insurance policy benefits are classified on an insurance company's balance sheet as:

Outline and briefly explain the different classes of life insurance as set out in the Life Insurance Act 1995.

Which of the following are basic life insurance contract types?

Which of the following statements is true?

Which of the following are typical products offered by general insurance companies?

Why Are Financial Institutions Special

The Financial Services Industry: Depository Institutions

Risk of Financial Institutions

Interest Rate Risk Measurement: The Repricing Model

Interest Rate Risk Measurement: The Duration Model

Managing Interest Rate Risk Using Off Balance Sheet Instruments

Credit Risk I: Individual Loan Risk

Market Risk

Credit Risk I: Individual Loan Risk

Credit Risk II: Loan Portfolio and Concentration Risk

Sovereign Risk

Foreign Exchange Risk

Liquidity Risk

Liability and Liquidity Management

Off-Balance-Sheet Activities

Technology and Other Operational Risk

Capital Management and Adequacy

Filters