Insurance Business and Finance (IBF) - M92 Exam Practice Test

Question 1

An insurer holds claims details on an ex-policyholder. When would the requirements of the Data Protection Act 1998 stop applying to this information?

A. When the policyholder reaches retirement age.

B. Immediately upon the sale of the policy to another insurer.

C. After five years of policy termination.

D. Upon the death of the policyholder.

Correct Answer: D

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Question 2

Which body exists to ensure that the London Market as a whole maintains and improves its position as a major worldwide insurance market?

A. London Market Group.

B. The Prudential Regulation Authority.

C. The Franchise Board.

D. The International Underwriting Association (IUA).

Correct Answer: A

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Question 3

How will a recent acquisition of the subsidiary be shown on the insurer's cash flow statement?

A. As a cash outflow from investment activities.

B. It is not shown on the cash flow statement.

C. As a financing inflow.

D. As an operational income.

Correct Answer: A

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Question 4

A risk assessment rating framework assesses risks based on:

A. market share and premium volume.

B. liquidity and solvency.

C. cost and benefit.

D. impact and probability.

Correct Answer: D

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Question 5

An international composite insurer is drafting its annual report. In accordance with the Companies Act 2006, what is the position regarding the inclusion of a chairman's statement in this report?

A. It is optional in all circumstances.

B. It is only required if the company is listed on the London Stock Exchange.

C. It is a mandatory requirement for all composite insurers.

D. It must be signed by the chief actuary.

Correct Answer: A

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Question 6

Standard & Poor's has placed its rating for the insurer under Creditwatch with a developing flag. what does this mean for the current rating?

A. The rating is withdrawn completely.

B. It will definitely be downgraded.

C. It will definitely be upgraded.

D. it may be raised, lowered or affirmed.

Correct Answer: D

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Question 7

The process by which a small business is set up as a registered company is known as..?

A. Incorporation.

B. Codification.

C. Vertical integration.

D. Horizontal diversification.

Correct Answer: A

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Question 8

In the context of management information systems, a control cycle is best described as the

A. full automation of the underwriting process.

B. comparison against a plan and production of reports by exception.

C. process of encrypting sensitive client data.

D. training program for new IT staff.

Correct Answer: B

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Question 9

An item has been inserted in a company's balance sheet in respect of machinery. Under which heading will this normally appear?

A. Shareholder equity.

B. Current assets.

C. Non-current assets.

D. Technical provisions.

Correct Answer: C

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CII Insurance Business and Finance (IBF) - M92 Exam Practice Test

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