Pce Exam
Pce Exam
Pce Exam
1. “Hazard, danger, and chance of loss or injury, the degree of probability of loss, a
person, thing or factor likely to cause loss or danger”
A. Risk
B. Loss
C. Probability
D. Opportunity
10. Insurers look for homogeneous or similar exposures to enjoy the benefits of the law
of large numbers in order to forecast the expected extent of their loss. However, it
can only operate efficiently if the following requirement(s) is/are fulfilled:
I: The loss exposures must be independent
II: The loss exposures must cover all people from different risks
III: The risk can be manipulated.
IV: There are a large number of similar loss exposures
A. I, II
B. I, IV
C. II, IV
D. I, II, III
11. He murdered her mother so that he could claim the sum assured from his mother’s.
Will company pay the claim to him?
A. No, his act against the public policy
B. No, his mother did not die in nature.
C. Yes, he will get the claim once he has submitted all the required documents.
D. Yes, he is the legal beneficiary.
14. The risk is acceptable but with extra premiums, loadings and/or limitations to
coverage. The risk classification is:
A. Standard risks
B. Below average risks
C. Sub-standard risks
D. Uninsurable risks
16. The proposal form should include specific questions and the agent should expressly
request material facts from client because the principle of ____________ protects the
insurance company from offering over protection to the insured.
A. indemnity
B. utmost good faith
C. insurable interest
D. contribution
17. Ming loves his grandson, Alex, so much that he has decided to buy a life policy with a
high sum assured for him. The insurance company rejects his application. This is
because Ming and Alex don’t have_______?
A. insurable interest
B. indemnity
C. contribution
D. common Pool
18. A person shall be deemed to have insurable interest in relation to another person
who is:-
I. His spouse and child or ward being under the age of majority at the time the
insurance is affected
II. His employee
III. A person with whom he is at the time the insurance is effected, wholly or partly
dependent for maintenance or education
IV. A girlfriend or boyfriend
A. IV
B. I, II
C. II, IV
D. I, II, III
19. __________ is each insured will pay a premium that will justify the level of risk to the
pool for a similar class of insurance.
A. Creation of common pool
B. Risk transfer
C. Sound risk transfer mechanism
D. Calculation of equitable premiums
22. Zac bought the same type of policy from three insurance companies. When a claim
arose, he received only the total amount of loss from the event. He thought this was
unfair practice because he should have gotten the total amount of sum assured from
all three companies. He lodged a complaint and was rejected by Bank Negara
Malaysia (BNM) because the insurance companies practiced the principle
of_________.
A. contribution
B. subrogation
C. proximate Cause
D. utmost good faith
23. Which of the following is the formula to calculate the amount that each insurer has to
pay?
A. Divide proportionally
B. Divide equally
C. According to sequence of client bought the policy
D. No, the other companies won’t pay that amount if a client is found having other
similar or same policies.
24. A fire due to an electrical short circuit damaged a building which was insured under a
fire insurance policy. In the course of putting out the fire, the fire brigade caused
water damage to the surrounding building and contents.
If the fire is an insured peril,
A. the insurer is only liable for the damage caused by fire to the insured building.
B. the insurer is liable for damage caused by the fire to the insured building as well
as for the consequent water damage to any property in the immediate vicinity.
C. the insurer is not liable for all damage because the damage was caused by
multiples causes.
D. the insurer is not liable for damage caused by water .
25. Which of the following is not a key regulatory objective of Bank Negara Malaysia in
relation to the insurance sector?
A. Promote monetary and financial stability conducive to sustainable growth of the
economy
B. Foster fair, responsible and professional business conduct of financial institutions
C. Strive to protect the rights and interests of financial consumers
D. Monitors all insurance agents to ensure good practices
27. Which of the following existing Acts have been replaced by the Financial Services
Act (FSA) 2013?
I Banking and Financial Institutions Act 1989 (BAFIA)
II Exchange Control Act 1953 (ECA)
III Insurance Act 1996
IV Payment Systems Act 2003 (PSA)
A. I
B. I, II
C. I, II,III
D. I,II,III,IV
28. Which of the following existing Act have been replaced by the Islamic Financial
Services Act (IFSA) 2013?
A. Takaful Act 1984
B. Exchange Control Act 1953 (ECA)
C. Payment Systems Act 2003 (PSA)
D. Insurance Act 1996
30. PIDM protects depositors against the loss of up to _____________ per depositor per
member bank, and Takaful certificate and insurance policy owners against the loss of
their Takaful and insurance benefits of up to ______________ in the event of the
failure of a member institution.
A. RM 250,000 & RM 500,000
B. RM 500,000 & RM 250,000
C. RM 1,000,000 & RM 750,000
D. RM 750,000 & RM 1,000,000
31. If a complainant is not satisfied with the outcome of a complaint resolution made by a
Financial Service Provider, he or she may lodge a complaint to the
__________________, attaching a copy of the decision letter of the insurance
company or Takaful operator.
A. Financial Mediation Bureau
B. Bank Simpanan Nasional
C. Ministry of finance
D. Court
39. The relationship between the principal and the agent may not come about in which of
the following way?
A. Agency by ratification
B. Agency by convenience
C. Agency by necessity
D. Agency by consent
41. __________ happens when a loss is covered by two or more policies by the same
insured. This has been developed to prevent the insured with two or more policies
from being more than indemnified for the same loss.
A. Contribution
B. Subrogation
C. Indemnity
D. Assignment
43. Generally, the maximum amount of disability income that can be purchased is
between ___ to ___ of one’s occupational earnings.
A. 60% to 70 %
B. 50% to 60%
C. 80% to 90 %
D. 70% to 80%
44. Managed Care Organizations (MCOs) are required to register with the __________.
A. Bank Negara Malaysia
B. Ministry of Health
C. Ministry of Finance
D. Health Labor Union
45. __________ is a retirement fund which gives policy owners the right to a series of
periodic payments at intervals of one year or less under a contract with a life insurer.
A. Life plan
B. Life-annuity plan
C. PA plan
D. Term annuity plan
48. The tax relief for medical and education policies is_________ and it is ___________
for life insurance and EPF contribution?
A. 6,000 & 3,000
B. 6,300 & 3,600
C. 3,000 & 6,000
D. 3,600 & 6,300
49. Disability income insurance under MHI provides _________ due to the disability.
A. income stream to replace wages lost
B. interest on wages lost
C. lump Sum payment of the sum assured
D. 20% to 30% of occupational earnings
50. Guidelines on Medical and Health Insurance Business (Revised) came into effect
on______?
A. 1 January 2006
B. 1 January 2008
C. 1 January 2010
D. 1 January 2012
54. Which of the following is not factor under ‘risk evaluation and selection’?
A. Family medical record and history
B. Occupational hazard
C. Financial situation
D. Number of family members per household
56. If a person has a pre-existing condition which is acceptable for an insurer to insure it,
which category of risk does fall under and what will the insurer normally do before
accepting their application?
A. Sub-standard, accept without loading
B. Standard, accept with loading
C. Decline, accept with loading
D. Sub-standard, accept with loading
58. Which of the following are common limitations applied to the core benefits of Hospital
and Surgical Insurance (HSI) policy?
I. Inner limits
II. Schedule of surgical procedures
III. Time frame
IV. Maximum Period of Compensation
A. I, II
B. II, III
C. I, II and III
D. I, II, III and IV
65. A minor who has attained the age of ____ may affect a life policy on his own life or
upon another life in which he has an insurable interest.
A. 13
B. 14
C. 15
D. 16
67. One that will influence a prudent underwriter in deciding whether to accept or reject
the risk and to determine the terms of coverage and premium payable is the
definition of?
A. Physical hazard
B. Material fact
C. Switching
D. Twisting
69. The relationship between the principal and the agent may come about in three main
ways. Which of the following is not?
A. Agency by ratification
B. Agency by necessity
C. Agency by agreement
D. Agency by appointment
70. An insurance agent is defined by the Financial Services Act 2013 as a person who
does all or any of the following:
I. Solicits or obtains a proposal for insurance on behalf of an insurer
II. Offers or assumes to act on behalf of an insurer in negotiating a policy
III. Develops a new policy on behalf of an insurer
IV. Does any other act on behalf of an insurer in relation to the issuance, renewal or
continuance of a policy
A. I, II, III
B. I, II, IV
C. II, III, IV
D. I, II, III, IV
71. Sam is a 35 year old who bought a term policy of RM500k for 30 years. When he is
55 years old, how much he can get back?
A. RM500,000
B. RM170,000
C. RM0
D. RM100,000
72. Which of the following does NOT form an integral part of an insurance policy?
I. Schedule
II. Proposal form
III. Operative clause
IV. Attestation
V. Exclusions and conditions
A. I, II, III, IV
B. II only
C. II, IV
D. II, IV, IV
75. Which of the following is NOT a Medical and Health Insurance Product?
A. Hospital and surgical insurance
B. Critical illness or dread disease insurance
C. Permanent disability income
D. Disability income insurance
76. What is the tax relief for the purchase of Medical and Health Insurance and
education policies?
A. RM4, 000
B. RM5, 000
C. RM3, 000
D. RM6, 000
77. Mr. Vellu, who is 25 years old, buys a term insurance of 5 years. After the 5 years,
Mr. Vellu decides that he doesn’t want to continue his policy. On the 6th year, Mr.
Vellu gets into an accident and dies. How much can Mr. Vellu’s nominee claim?
A. RM55, 000
B. RM0
C. RM45, 000
D. RM50, 000
79. Tom aged 35 dies in an accident. Upon investigation, Tom’s children found out that
Tom is only 30 years old. How much can Tom’s children claim?
A. Sum assured
B. Sum assured and extra premium tom has paid
C. Sum assured and bonuses
D. No claim
80. How many years will a regular policy acquire surrender value after the policy
holder has paid the premium?
A. 4 years
B. 2 years
C. 3 years
D. 1 year
82. Which shall be determined if the policy owner, by notice in writing to the insurer, elect
to exchange the life policy for a paid up policy?
I. In accordance with generally accepted actuarial principals
II. In a manner ensuring fair treatment of the policy owner
III. In a manner consistent with the surrender value payable
IV. In compliance with standard of business conduct of fair treatment of policy owner
A. I, II, III
B. I, III, IV
C. II, III, IV
D. I, II, III, IV
83. If a person shall invite any person to make an offer or proposal to enter into a
contract of insurance, he/she shall disclose
I. The name of the licensed insurer
II. His relationship with his insurer
III. The premium charged by the licensed insurer
IV. The conditions of the policy
A. I, II, III
B. I, III, IV
C. II, III, IV
D. I, II, III, IV
84. If a person shall arrange a group policy in relationship to whom he has no insurable
interest to make an offer or proposal to enter into a contract of insurance, he/she
shall disclose
I. The name of the licensed insurer
II. His relationship with his insurer
III. The premium charged by the licensed insurer
IV. The conditions of the group policy, including the remuneration payable to him
A. I, II, III
B. I, III, IV
C. II, III, IV
D. I, II, III, IV
85. Identify the difference in terms of disclosure requirement when an agent approaches
an individual client to sell individual life insurance as opposed to when he
approaches a group of individuals to arrange for a group policy.
A. The name of the licensed insurer
B. The conditions of the group policy, including the remuneration payable to him
C. His relationship with his insurer
D. The premium charged by the licensed insurer
87. Which of the following documents are required for a death claim
I. Original policy contract
II. Proof of age
III. Original burial permit
IV. Proof of relationship
A. I, II, III
B. I, III, IV
C. II, III, IV
D. I, II, III, IV
88. Which of the following is true about the non-contestability clause for life insurance
policies?
A. If a life policy has been in force for more than 2 years, the insurer will be able
to contest the validity of the policy because of careless misrepresentation.
B. If a life policy has been in force for less than 2 years, the insurer will not be
able to contest the validity of the policy.
C. If a life policy has been in force for more than 2 years, the insurer will not be
able to contest the validity of the policy unless the insurer can show proof that
misrepresentation or non-disclosure was of material fact done deliberately or
with fraudulent intent.
D. If a life policy has been in force for 1 year, the insurer will not be able to
contest the validity of the policy.
90. “ A matter of fact which, if known by the insurer, would have led to its refusal to
issue a life policy or would have led it to impose terms less favorable to the policy
owner than those imposed in the life policy”
A. Proposal form
B. Material fact
C. Agent’s report
D. Underwriting
91. When a person agreed to pay the premium, this situation is:
A. Offer and Acceptance
B. Intention to create a legal relationship
C. Consideration
D. Contractual capacity
94. Which of the following does not form an integral part of an insurance policy?
I. Schedule
II. Proposal form
III. Operative clause
IV. Attestation
V. Exclusion and conditions
A. II
B. IV
C. II, V
D. III
95. The following documents are required for a total and permanent disability claim to
an accident, EXCEPT
A. A certified copy of the attending doctor’s credentials
B. A duly completed claim form
C. A medical certification by the attending doctor
D. A certified copy of the police report
99. In the case of a missing person, what is the time lapse before a statutory
presumption of death can be issued by a court?
A. 7 years
B. 6 years
C. 5 years
D. 4 years
100. How much is the personal tax relief for the purchase of the life insurance
including contributions to the Employees Provident Fund (EPF)?
A. RM3,000
B. RM4,000
C. RM5,000
D. RM6,000