1. ___________ is an alternative from of insurance based on the principle of mutual assistance.

o Bancassurance
o Takaful
o Reinsurance
o Co-insurance

2. Identify which is the characteristic of an Insurable risk.

o A speculative risk that brings about financial loss.

o An act which contravenes the law and is against public policy
o A risk which is fortuitous or accidental in nature
o A risk with an outcome that can be predicted with utmost certainty.

3. Carelessness, unreasonableness and fraud are some of the forms of ________ hazard.

o Moral
o Physical
o Biological
o Social

4. The three functions of insurance which are interrelated are:

o Financial protection, cost stabilization and compelled savings.

o Identify, analyse and control of risk management.
o Risk transfer, equitable premiums and creation of a common pool.
o Retain, control and transfer of the identified risks.

5. When buying life insurance, an individual will benefit from ________ as a result of putting aside for retirement
and old age.

o Compelled savings
o Good health
o Investment returns
o Long life

6. The ride of a licensed financial adviser in the distribution of life insurance products is to

o Undertake marketing through banking institutions

o Provide independent assessment and the pricing of risks to be insured.
o Represent life insurance companies in the marketing of insurance products.
o Provide independent advice on a whole range of insurance products.
7. With a large number of similar loss exposures, an insurance company is able to predict an expected loss;
however,

o There is an element of uncertainty as the actual loss may not be the same as the expected loss
o There is an element of certainty as the actual loss may be the same as expected loss
o There is an element of uncertainly as the actual loss may be less than the expected loss
o There is an element of surprise as the actual loss may be greater than the expected loss

8. The following differentiates insurance from gambling:

o Insurable risks whose financial value is measurable

o Insurable interest in the subject matter insured
o Inevitable losses beyond the control of the insured
o Homogeneous of similar risks in large numbers

9. An example of moral hazard is

o Dishonest employees
o Storage of hazardous chemicals
o Engaging in dangerous sports
o Unguarded premises

10. Identify the difference between an insurance broker and an insurance agent.

o An insurance agent acts on behalf of the insurer to solicit new business whereas an insurance broker
represents his client’s interests.
o An insurance agent is independent while an insurance broker is employed by an insurance company
o An insurance agent receives commissions whereas an insurance broker is paid by brokerage fee by his
customers
o An insurance agent represents the best interests of his customers whereas the insurance broker acts on
behalf of the insurer

11. ____________ is an exclude peril in a personal accident policy.

o Drowning
o Snake bite
o Food poisoning
o Illness
12. The requirement of insurable interest is merely to ensure that insurance is not abused for the purpose of
speculation, wagering or _____________ .

o Investing
o Gambling
o Gaming
o Profiteering

13. A breach of good faith on the part of the insured can result in _______.

o A void contract
o An unenforceable contract
o An illegal contract
o A voidable contract

14. An individual complies with the duty of disclosure under a consumer insurance contract by

o Disclosing information that is of common knowledge

o Answering all questions in the proposal form fully and faithfully
o Providing incomplete answers to specific questions in the proposal form
o Volunteering useful information pertaining to the risk

15. In a life proposal where age is a material fact, __________ is required to avoid a misrepresentation by the
proposer.

o The driving license

o The death certificate
o Proof of age
o The proposal form

16. The active efficient cause that sets in motion a chain of events which brings about a result, without the
intervention of any force started and wording actively from a new independent source. “This is the definition of

o Independent cause
o Proximate cause
o Single cause
o Remote cause
17. The principle of indemnity is not applicable to the following insurance contract:

o Life insurance
o All risks insurance
o Aviation insurance
o Fire insurance

18. In the absence of any specific questions in the proposal form, an insured is not required to disclose a fact that
________.

o Affects insurer’s rating of the risk

o Increases the risk to the insurer
o Influences the decision in acceptance of the risk
o Diminishes the risk to the insurer

19. A mountain climber broke his leg and was hospitalized but died in hospital due to SARS contracted from another
patient. The insurer will decline the death claim under his personal accident policy due to the application of the
principle of

o Insurable interest
o Indemnity
o Contribution
o Proximate cause

20. Which of the following is NOT a money laundering activity?

o Layering
o Consolation
o Placement
o Integration

21. Members of the Financial Mediation Bureau do NOT include

o Licensed banking Institutions

o Licensed insurance companies
o Takaful operators
o Licensed Insurance brokers
22. The FMB (now known as OFS) provides consumers with a platform for a timely resolution of disputes, claims and
complaints arising from services provided by member financial institutions. The following financial dispute will
fall within the ambit of the FMB:

o RM75,000 public liability legal action case

o RM50,000 fraud motor insurance case
o Third Party Property Damage worth RM5,000
o Complaint of an overpriced private motor insurance policy

23. The following are reasons why insurer is regulated, EXCEPT

o Promote financial stability

o To ensure are insurer solvent
o Protect consumer
o To address adequate insurance knowledge

24. The minimum paid-up capital or surplus of assets over liabilities prescribed by the Insurance Act 1996 for local
professional life reinsurers is

o RM20 Million
o RM100 Million
o RM75 Million
o RM50 Million

25. If a policyholder is dissatisfied with the response on an insurer’s final decision or receives no response after 60
days, he can refer

o Complaint to Bank Negara Malaysia (BNM)

o To LIAM or PIAM in accordance to whether it relates to life or general insurance
o The case to a court of competent jurisdiction in Malaysia
o The complaint to the Ombudsman for Financial services (OFS)

26. The ____________ is the ‘Consideration’ given by an insured in return for insurance cover.

o Policy
o Promise
o Proposal
o Premium

27. A key characteristic for a contract to be considered legally binding is the

o Seal and stamp on the written document

o Mutual agreement arising out of goodwill
 o Freedom t contract by all parties
o Intention to create a legal relationship

28. The __________ is the legal form of insurance prescribe by the Road Transport Act 1987.

o Policy document
o Certificate of insurance
o Acceptance letter
o Cover note

29. In Malaysia, insures are corporations formed and registered under the Companies Act 1965 as

o Private Limited Companies

o Public Listed Companies
o Public Limited Companies
o Private Listed Companies

30. With regard to taking up a life policy on own life for a 14-year-old minor, the following is correct:

o The consent of the parent/guardian is not required

o The minor had to be 16 years of age
o Consent is required only if taking a policy on the life of another
o The consent in writing of the parent/guardian is required

31. When applying for an insurance contract, who makes the offer?

o The proposer
o The insurer
o The broker
o The agent

32. _________ of the Financial Services Act 2013 lists the prohibited business conduct.

o Schedule 10 of the Financial Services Act 2013

o Schedule 7 of the Financial Services Act 2013
o Schedule 8 of the Financial Services Act 2013
o Schedule 11 of the Financial Services Act 2013
33. An agency relationship created retrospectively by ratification where the agent does not have actual authority is
referred to as

o Agency by ratification
o Agency by necessity
o Agency by agreement
o Agency by selection

34. -

o –

35. The agent with no real authority to do the act in question but appears to have such authority in the eyes of the
third party may bind their principal by what is known as _________authority.

o Apparent
o Express
o Actual
o Implied

36. What is the term for a relationship created under the circumstances when the agent makes a critical decision on
behalf of another party who is NOT in a condition to do so?

o Agency by necessity
o Agency by agreement
o Agency by ratification
o Agency by contract

37. An agent is prohibited from, “engaging in conduct that is misleading or deceptive, or is likely to mislead or
deceive in relation to the nature, features, terms or price of any financial service or product” as stipulated under

o Schedule 10 of the Financial Services Act 2013

o Schedule 7 of the Financial Services Act 2013
o Schedule 9 of the Financial Services Act 2013
o Schedule 12 of the Financial Services Act 2013

38. A principal may terminate as agency by giving one of the following notices to the agent EXPECT

o Renunciation
o Extension
o Completion
o Revocation
39. In Malaysia, Insurance agencies are created

o Through agency by ratification

o Only though appointment by express agreement
o By implied agreement
o Though the creation of agency of necessity

40. For continuity of coverage of renewable policies, the insurer shall NOT

o Reject the policy renewal

o Renew the policy upon the renewal date
o Refuse to increase the amount of cover due to certain material fact
o Unilaterally terminate the policy during the cover period

41. Which of the following is NOT a medical and health insurance product?

o Critical illness or dread disease insurance

o Permanent disability income insurance
o Disability income insurance
o Hospital and surgical insurance

42. The benefit provided by a Hospital and Surgical Insurance (HSI) policy is

o Lump sum payment upon illness

o Only daily allowance upon hospitalization
o Annual dental treatment expenses
o Reimbursement of medical expenses

43. Two main benefits covered by Hospital and Surgical insurance are hospital accommodation and nursing
expenses. The policy EXCLUDES

o Surgical expenses, physicians’ expenses and in-patient tests

o Maternity, congenital abnormalities and cosmetic or plastic surgery
o Outpatient cancer treatment or kidney dialysis
o Post-hospital follow-up t/reatment

44. The standard Hospital and Surgical insurance policy covers

o Outpatient day care surgery

o Kidney dialysis
 o Organ transplant
o Ambulance fees

45. Medical and health insurance in Malaysia is written by both Life and General Insurers as a __________.

o Rider attached to a Life Policy

o Supplementary cover
o Stand-alone policy
o Health benefit package.

46. A medical and health insurance policy is NOT automatically terminated at the earliest happening of which of the
following events?

o On the death of an insured person

o On the survival of an insured person
o On the policy anniversary date following the insured’s maximum eligibility age
o Exhaustion of the annual limit or lifetime limit stipulated in the policy terms.

47. Exhaustion of the annual lifetime limit of a hospital and surgical insurance policy will result in

o Unilateral termination
o Automatic termination
o Automatic renewal
o Guaranteed renewal

48. Pre-existing health conditions need to be disclosed at the time proposing a medical health plan by the proposer.
____________ is NOT required to be disclosed as a pre-existing condition.

o Elevated blood pressure under observation

o Erratic heartbeat
o Incident of ankle sprained 6 months prior to proposal
o Elevated blood sugar with no medication but under diet control

49. Medication to medical and health insurance coverage where the amount of benefit is reduced or the period of
disability income is shortened or a larger deductible is imposed for high risk individuals is termed

o Benefit limitation
o Extra premium of loading
o Cover restrictions
o Exclusion endorsement
50. Occupational hazard increases the chance of work-related injuries and diseases which in turn affect the
premium rates, particularly for

o Hospital and surgical insurance

o Disability income insurance
o Critical illness insurance
o Hospital income insurance

51. Environmental risks are usually excluded from most policies but sudden and accidental pollution liability can be
covered under the ___________ policy.

o Public liability
o Employees liability
o Business interruption
o Product liability

52. One Sunday morning while reversing his car, Han Kook accidentally hit his garage wall and damaged the vehicle
back portion of the car. He estimates that the repair will cost more than RM3,000.00. Han kook can claim these
repairs under _____________ of his comprehensive motor policy.

o Section C
o Section A
o Section D
o Section B

53. A basic fire insurance policy does NOT cover _______.

o Lightning damage
o Fire as a result of the explosion of a domestic boiler
o War
o Fire caused by negligence of employees

54. A personal accident policy does NOT cover death and disablement caused by

o Suicide, insanity or under the influence of drugs

o Accident at the work place
o Accident while traveling to work
o Injuries suffered during sporting activities

55. In a motor policy, certain exclusions are deemed ‘buy-back’ options on the payment of additional premiums.
One of these options and the additional premium to cover all drivers is:

o All drivers (private cars issued to a company or business organization): RM20 per driver
o All drivers (private cars issued to a company or business organization): RM20 per vehicle
 o All drivers (private cars issued to a company or business organization): RM50 per driver
o All drivers (private cars issued to a company or business organization): RM50 per vehicle

56. The terms and conditions of the coverage in the marine hull policy are spelt out in __________.

o The institute of London underwriters

o The institute Time Clauses – Hulls
o Protection and Indemnity Clubs
o The International Regulations for the Prevention of Collisions at Sea

57. What is NOT covered under Section A of the private car comprehensive insurance?

o Fire, explosion or lightning

o Death or bodily injury to any person for unlimited liability
o Malicious act
o Accidental collision or overturning

58. Malaysia aviation risks and Malaysian aviation interests abroad are written collectively by the Malaysian Aviation
Pool because ___________ .

o Malaysian insurers decline to write the risk

o It is not profitable to Malaysian insurers
o No single insurer has the resources to retain a risk that size
o Malaysian insurers prefer to write only private owners

59. Last Monday, Kevin went back to his office after a week’s holiday in Langkawi to find the lock on the main door
pried open and the whole place ransacked. Kevin can claim under his burglary policy as it covers ________ .

o Theft of property usually arising out of violent threats on the premises

o Theft of property usually arising out of silent exit from the premises
o Theft of property usually arising out of silent entry into or exit from the premises
o Theft of property usually arising out of violent entry into or exit from the premises

60. ____________ is the widest from of cover available under a motor policy.

o Comprehensive insurance
o Third party cover
o Act Cover
o Third party, fire and theft insurance cover
61. As started in section 90(2) of the Road Transport Act 1987, the penalty for a violation of the Act is

o A fine not exceeding RM5,000 or 6 months imprisonment and disqualification from holding a driving license
for 12 months
o A fine not exceeding RM10,000 or 3 months imprisonment and disqualification from holding a driving license
for 12 months
o A fine not exceeding RM1,000 or 6 months imprisonment and disqualification from holding a driving license
for 12 months
o A fine not exceeding RM1,000 or 3 months imprisonment and disqualification from holding a driving license
for 12 months

62. Contributions to the Social Security Organization (SOCSO) by bath employer and employee is compulsory under
the ___________ .

o Trade Unions Act 1969

o Employment Act 1955
o Workmen’s Compensation Act 1952
o Employees’ Social Security Act 1969

63. Commercial vehicle insurance is different from private car insurance because it excludes

o Loss, damage or liability arising from flood typhoon, hurricane, storm, tempest, volcanic eruption,
earthquake, landside, landslip, subsidence or sinking of the soil/earth or other convulsion of nature is
involved.
o Death or bodily injury to any passenger being carried for hire or reward or to any person where such death
or injury arises out of or in the course of employment by the insured or his authorized driver.
o Loss, damage or liability if the vehicle is used for any motor sport or competition (other than treasure
hunts), reliability trials, hill climbing tests and rallies.
o Damage caused by explosion of any boiler forming part of or attached to or on the insured vehicle.

64. The intention of fidelity guarantee insurance is to

o Provide cover to the Insured against his legal liability for bodily injury or diseases to employees arising out of
and in the course of their employment
o Cover the Insured for breach of professional duty by reason of any negligent act committed by the insured.
o Cover the legal liability of the insured in respect of accidental bodily injury property damage to third party
arising in connection with the insured’s business
o Provide cover against loss by reason of the dishonesty of a person holding positions of trust. Employees who
are responsible for handling money or stocks may commit acts of misappropriation, embezzlement or
fraudulent conversion of property belonging for personal gain.
65. Identify the policies that do NOT fall under engineering insurance.

o Erection All Risks policies

o Boiler Explosion Policies
o Marine Hull and Machinery policies
o Machinery Breakdown policies

66. Proposal form are required for the following classes of insurance:

I Contractors’ all risks

II Fire
III Burglary
IV Marine Cargo

o I, II and III
o I, II and IV
o I, III and IV
o II, III and IV

67. Once a motor insurance certificate is insured as prescribed by the Road Transport Act 1987 but is later cancelled,
the policy owner must surrender the certificate to the insurer _________.

o Within thirty days of the cancellation

o Within twenty days of the cancellation
o Within fourteen days of the cancellation
o Within seven days of the cancellation

68. Select the statement that correctly describes a cover note.

o A cover note is a temporary document to confirm insurance cover while waiting for the policy form to be
issued
o A cover note is a temporary document to confirm insurance while waiting for the policy to be delivered
o A cover note is a permanent document to confirm insurance cover while waiting for the confirmation by the
insurance company
o A cover note is a temporary document to confirm insurance cover while waiting for the premium to be paid

69. At the renewal of an insurance policy, the duty of utmost good faith must be observed by both parties (Insured
and Insurer) but

o The onus is on the insured to inform the insurer of any change in the insured’s marital status
o The onus is on the insured to inform the insurer of any material changes in the risk
 o The onus is on the insured to remind the insurer of the expiry of the policy
o The onus is on the insured to ignore any material changes in the risk

70. Identify the class of insurance for which a proposal form is NOT needed.

o Aviator insurance
o Public liability insurance
o All risks insurance
o Marin cargo insurance

71. Risks maybe declined by insurance underwriters because of ____________.

o Consistent renewals
o High profit margin
o Good claims record
o High risk exposures

72. According to the text, the classes of insurance that are governed by tariffs are ___________.

o Marine and aviator

o Burglary and theft
o Medical insurance
o Motor and fire

73. The following statement is true of the renewal notice:

o Renewal invitation is a requirement under the FSA 2013 for all types of policies
o Insured are legally obliged to send renewal notices at least 3 months before the renewal date
o There is no legal obligation on the part of the insurer to advise the insured that a policy is due to expire on a
particular date
o Insurers send renewal invites only for selected types of contract-related policies

74. Select the statement that provides the correct description of underwriting

o Underwriting is the process of selecting risks for insurance and classifying them according to their degrees of
insurability so that the agents can sell the insurance
o Underwriting is the process of selecting risks for insurance and classifying them according to their degrees of
insurability so that the appropriate authority may provide approval
o Underwriting is the process of selecting risks for insurance and classifying them according to their degrees of
insurability so that the appropriate rates may be assigned
o Underwriting is the process of selecting insurance products and classifying them according to their degrees
of insurability so that the appropriate rates may be assigned.
75. -

o –

76. State the class of insurance for which the underwriting considerations are exposure to technological changes
such as new methods of construction, prototype design, new dimensions, higher operational temperatures, and
level of exposure to natural hazards such as flood.

o Motor insurance
o Fire insurance
o Burglary insurance
o Contractors’ all risks insurance.

77. Which is NOT the role of the loss adjuster?

o To presence the interest of the insured

o To advise the insured to admit liability for the accident
o To advise the insurer on possible risk improvement measures
o To negotiate and act as settlement agent

78. When a claim dispute arises, if may be resolved through the following channels EXCEPT:

o Mediation
o Arbitration
o Subrogation
o Negotiation

79. Identify the purpose of a claims register

o the claims register is a temporary list of claims

o the claims register is a list of claims settled by the insurer
o the claims register serves as an official record of claims notified to the insurer
o the claims register serves as a guide to consumers on how to report a claim

80. In the event of a claims dispute, ___________ is the last resort to resolve the dispute if an amicable settlement
cannot be reached.

o Litigation
 o Negotiation
o Mediation
o Arbitration

81. In liability insurance, a condition precedent to liability is that the insured __________ .

o Should not declare the existence of a liability policy

o Should not admit any liability without the prior written consent of the insurer
o Can appoint his own lawyers without the prior written consent of the insurer
o Can reply to all correspondence without the prior written consent of the insurer

82. An insurer may repudiate liability if

o The policy is valid and approved during the underwriting process

o The loss is included in the scope of cover
o All material facts including those that are of public knowledge had been disclosed
o The loss of damage was not caused by an insured peril

83. After a total loss claim is paid, the insurer may take the following action:

o Increase the Sum Insured

o Reinstate the policy
o Terminate the policy
o Renew the policy

84. Which of the following is NOT a main provision of the Knock-for-knock agreement?

o Exclusion of loss or damage by fire only.

o Exclusion of any vehicle used for the carriage of passengers for hire and drive either self-drive or chauffeur-
driven.
o Application of excess (if any)
o Exclusion of damage by third party bodily injury.

85. The requirement of an insured to act in good faith to take immediate remedial action to minimize further loss in
the event of a claim is an example of

o An express condition subsequent to liability

o A condition precedent to liability
o A warranty imposed on all motor policies
o A condition imposed on cases with prior loss history

86. The following is NOT a method for the settlement of claims:

 o Repair
o Replacement or reinstatement
o Repudiation of liability
o Cash

87. The knock-for-knock (KFK) is a market agreement governing member of the

o Motor Insurer’s Bureau

o General Insurance Association of Malaysia
o Association of Malaysian Loss Adjusters
o Malaysian Insurance and Takaful Brokers Association

88. Identify from the following, the role and responsibility of the loss adjuster

o To negotiate and act in the interest of the insurer to reduce the claim amount
o The avoid the issue of subrogation as it is the responsibility of the insurer
o To establish the proportion of contribution from and to other insurer
o To protect the right of the insurer by providing a stop loss action

89. If a general insurance agent fails to meet the minimum maintenance requirement,

o The agent must re-take and pass the Pre-Contract Examination (PCE)
o The agent must make an appeal to renew the Certificate of Registration
o The agent cannot renew the Certificate of Registration for a period of twelve months
o The agent cannot renew the Certificate of Registration forever

90. The following is the penalty for an agent found to have breached the Cash-Before-Cover requirement for a
second time within 2 years:

o The certificate of registration will be cancelled, and the agent will receive a 3 months’ suspension from
conducting any general insurance business
o The certificate of registration will be cancelled, and the agent will barred from conducting any general
insurance business for 6 months
o The certificate of registration will be cancelled, and the agent will barred from conducting any general
insurance business for 12 months
o The certificate of registration will be cancelled, and the agent will barred from conducting any general
insurance business for 9 months

91. All registered general insurance agents must have a signboard at their registered office displaying _______.

o The insurance company’s name only

o The name of the directors only
o Their name and the class of insurance that they are authorized to sell
 o Their name and the insurance company/companies that they represent

92. Which of the following classes of insurance apples premium warranty?

o Bonds
o Fire
o Contractors’ All Risks
o Marine Cargo

93. The activities of every person transacting general insurance business in Malaysia are controlled and regulated by
the __________ .

o Financial Mediation Bureau (FMB)

o Inter-Company Agreement on General Insurance Business (ICAGIB)
o General Insurance Agents Registration and Regulations (GIARR)
o General Insurance Business Code of Practice for All Intermediaries Other than Registered Insurance Brokers

94. How much actual receipt for gross premiums must a general insurance agent procure in a year?

o At least RM22,000
o At least RM20,000
o At least RM21,000
o At least RM23,000

95. To instill a higher level of professionalism and commitment, every registered agent shall ensure the
procurement of sufficient general insurance business which results in the actual receipt of gross premiums
_________.

o Totaling at least RM30,000 in a year

o Totaling at least RM20,000 in a year
o Totaling at least RM50,000 in a year
o Totaling at least RM40,000 in a year

96. The appeals procedure for an agent whose registration has been cancelled does NOT include

o Submission of an appeal only through writing

o Submission of a verbal appeal directly to the management committee
o Submission of an appeal addressed to the management committee
o Submission of an appeal in agent’s own name
97. The following can lead to a general insurance agent’s suspension:

o Non-compliance with CBC requirements with any one principal

o Failure to remit motor insurance premiums to his principal upon immediate receipt of premiums.
o Inflating the terms and conditions of a particular policy which the agent was trying to sell
o Non-compliance with CBC requirements committed by an agent during two reporting quarters

98. According to the Code of Practice, what should the agent avoid doing in the selling of general insurance to a
prospective customer?

I Inform the prospective policyholder that his/her name has been given by another person
II Prevent the prospective policyholder from stating material facts to the insurance company
III Induce the person effecting insurance to make false statements misrepresenting material facts
IV Make misleading statements regarding the terms conditions or benefits of the policy.

o I, II and III
o I, III and IV
o II, III and IV
o I, II, III and Iv

99. A Certificate of Registration as General Insurance Agent can be cancelled if

o The person is discharged from a bankruptcy listing

o The person had outstanding debt with any bank or finance company
o The person had taken legal action against another insurance agent
o The person has outstanding premium debts or financial obligations with another insurance company with
whom he had an agency agreement

100. Identify what a general insurance agent should do under the Genera Insurance Business Code of
Practice.

o Engage another person to solicit general insurance business on his behalf

o Give advice only on general insurance matters which he has knowledge of
o Induce a prospect to only make statements acceptable to the insurer
o Prevent a prospective policyholder from stating certain material facts