Risk Insurance Management Question Paper
Risk Insurance Management
Course:Bachelor Of Commerce
Institution: Jomo Kenyatta University Of Agriculture And Technology question papers
Exam Year:2012
WI-2-60-1-6
JOMOKENYATTA UNIERSITY OF AGRICULTURE AND TECHNOLOGY
UNIVERSITY EXAMINATIONS 2011/2012
YEAR TWO SEMISTER TWO EXAMINATION FOR THE DEGREE OF COMMERCE
HBC 2117: RISK AND INSURANCE MANAGEMENT
DATE APRIL, 2012 TIME: 2 HOURS
INSTRUCTIONS: Answer one and any other two questions
QUESTION ONE:
a) What is the significance of a course unit on risk management and insurance to students of commerce at university level?
(2 marks)
b) Define risks and using examples distinguish pure and liability risks.
(2 marks)
c) Distinguish between physical and moral hazards and explain how the hazards could jeopardize insurability of property.
(3 marks)
d) Mrs. M insured her car at a cost of sh. 450000 on comprehensive car policy for period 1st Jan 2011 to Dec 31 2011.if the car is stolen on 4th Jan 2012 how much money should the insurance co. Pay Mrs. ?Explain
(2 marks)
e) On March 10 2011 Mr. Okay bought a fire policy of 950000to cover business stock for over a year. Thieves broke into the shop on 11th Sept 2011 and stole stock valued at 750000. How much money will the insurer pay? Explain
(2 marks)
f) Mr. K has a comprehensive car policy with J insurance co. for the period 1/1/2011 to31/12/2011. His car was stolen on 10/10/2011. However at that time j co. was under receivership. Suggest what could happen to J`s claims. (2 marks)
g) Ms. N insured her car against theft with W insurance Co. for the period Jan 1,2011 to Dec 31,2011.the car was stolen on 23rd October 2011.W indemnified N by cash settlement. However, on Feb. 2012 the stolen car was recovered by police and M got to know about it. Who should take ownership of the car and why? (2 marks)
QUESTION TWO:
a) Define life assurance and using the mortality curve discuss the application of the probability of death concept to life assurance.( 4 marks)
b) Distinguish between whole life and endowment policy and discuss benefits of each type.(4 marks)
c) With respect to motor vehicle insurance explain what you understand by third party car policy.(2 marks)
d) Suggest any two reasons that could lead to the cancelation of motor vehicle policy by insurance co.(2 marks)
e) Define employee dishonesty and suggest strategies to manage employee dishonesty in organizations.(4 marks)
f) Directors and business partners are not covered by business dishonesty option” discuss(4 marks)
QUESTION THREE:
Write an essay on either
a) “the importance of insurance to the development of business and society”(20 mark)
b) “challenges facing the insurance industry in Kenya and strategies to manage and challenge”(20 marks)
QUESTION FOUR:
a) Distinguish between speculative and catastrophe risks and explain why such risks are generally not insurable.(2marks)
b) Using appropriate examples discuss any 4 methods that business could adopt to handle risks.(8 marks)
c) “the initial task of a risk manager is to identify risks to which finances and people in the organization could be exposed to “discuss the approaches that the manager could use to perform the task of risk identification.(4 marks)
d) Discuss changes in business that would necessitate a continuous review of risks facing a business.(4 marks)
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