Insurance Business and Finance (IBF) (M92) Free Practice Test

Question 1

Under which Act would it be a civil offence if Mark were to sell his shares following information obtained in May?

A. Data Protection Act 2018

B. Companies Act 2006

C. Financial Services and Markets Act 2000

D. The Bribery Act 2010

Correct Answer: C

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Question 2

If a company were to outsource specialist-claims handling services and extend the current 30 day period of credit given to brokers was extended to 90 days then what would be the consequence?

A. Financial resources will be impaired

B. The solvency margin will immediately increase

C. Premium income will accelerate

D. The combined operating ratio will improve

Correct Answer: A

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Question 3

The financial strength of an insurance company as measured by a ratings agency is always

A. a measure of its ability to pay claims.

B. a guarantee of the company's future stock price performance.

C. a forward-looking forecast of premium growth.

D. an endorsement of the company's ethical culture.

Correct Answer: A

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Question 4

Under the Solvency II rules, what is a calculation kernel?

A. The process for calculating a broker's commission.

B. A register of all IT hardware assets.

C. The external auditor's primary testing tool.

D. The model used in the quantification of capital requirements for all risk categories.

Correct Answer: D

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Question 5

What is the primary function of financial accounting?

A. To ensure regulatory capital is minimized.

B. To provide management with internal budgets.

C. To calculate the technical premium for products.

D. To report the financial position to all stakeholders.

Correct Answer: D

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Question 6

The use of claims development tables provides valuable information about the...?

A. current market share.

B. technical price for new business.

C. prior estimates of outstanding amounts.

D. speed of claim payments.

Correct Answer: C

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Question 7

Under the principles of the Data Protection Act 1988, unless adequate protection exists, personal data should not be transferred

A. To any underwriter.

B. To any loss adjuster.

C. Outside the EEA.

D. To the policyholder.

Correct Answer: C

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Question 8

A balance sheet records a company's what?

A. Cash inflows and outflows

B. Budgetary variances

C. Profit or loss for the year

D. Net financial position

Correct Answer: D

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Question 9

The financial accounts differ to the management accounts that are produced internally within the insurer. This is because the financial accounts are?

A. primarily used for making pricing decisions

B. produced to a higher standard of accuracy

C. record the financial impact of events whereas management accounts provides forecasts

D. subject to statutory regulation and prescribed formats

Correct Answer: C

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CII Insurance Business and Finance (IBF) (M92) Free Practice Test