IC 72 - MOTOR INSURANCE

EXAM
EXAM
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

About PASS4SURE.in

PASS4SURE is a professional online practice test bank for various NISM and INSURANCE exams. The team behind
PASS4SURE has decades of experience in the financial and insurance markets and have succeeded in preparing
practice question bank which will help not only to pass the exams easily but also get good knowledge of the
subject.

Our online mock exams contain questions which are carefully analysed by the experts and have a high probability
of being asked in the exams. Thus all PASS4SURE questions are highly valued and contribute to an almost 100%
success rate.

We do not believe in offering you thousands of questions but most important 300-400 practice questions and
answers. PASS4SURE understands that time and money is valuable for our students, so we regularly update all our
exams. The old questions are deleted and new important questions are added. This is done to ensure that the
students learns what is most important and pass the exams. You do not have to try again and again wasting time
and money.

Our simple aim is to simplify the NISM and Insurance exams. ALL THE BEST.

IMPORTANT – The viewing rights for this downloaded Question Bank will automatically expire after 180 days from the
date of purchase.

All Rights Reserved. No Part of this documents may be reproduced, stored in a retrieval system, or transmitted, in
any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior
written permission from PASS4SURE.in. For any clarification regarding this document or if you feel there are
errors in the question bank, please write us at [email protected]
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

PRACTICE TEST 2

Question1 Whenever, a surveyor has to be appointed for assessing a loss / claim, it shall be so done
within of the receipt of intimation from the insured.
(a) 24 hours
(b) 36 hours
(c) 48 hours
(d) 60 hours
(e) 72 hours

Correct Answer 72 hours

Answer Whenever, a surveyor has to be appointed for assessing a loss / claim, it shall be so done
Explanation within 72 hours of the receipt of intimation from the insured.

Question2 A person is said to do anything , if he does that thing with an intent to defraud
but not otherwise.
(a) Fraudulently
(b) Dishonestly
(c) Forcefully
(d) Wrongly
(e) All of the above

Correct Answer Fraudulently

Answer A person is said to do anything fraudulently, if he does that thing with an intent to defraud
Explanation but not otherwise.
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question3 In case of a stolen vehicle, if the police do not succeed in tracing the vehicle after a period
of days, they file away the claim, certifying that the case is classified as true
but undetected.
(a) 60
(b) 90
(c) 100
(d) 120
(e) 180

Correct Answer 90

Question4 Whoever does anything with the intention of causing wrongful gain to one person or
wrongful loss to another person is said to do that thing .
(a) wrongly
(b) dishonestly
(c) fraudulently
(d) forcefully
(e) None of the above

Correct Answer dishonestly

Answer Whoever does anything with the intention of causing wrongful gain to one person or
Explanation wrongful loss to another person is said to do that thing dishonestly.
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question5 Section 163A provides for fixed amount of general damage in case of death such as
for funeral expenses.
(a) Rs 1000
(b) Rs 2000
(c) Rs 3000
(d) Rs 4000
(e) Rs 5000

Correct Answer Rs 2000

Answer Section 163A provides for fixed amount of general damage in case of death such as Rs. 2000
Explanation for funeral expenses.

Question6 Where a person is injured without any negligence on his part but as a result of the
combined effect of the negligence of two other people, it is case of injury by .
(a) Contributory negligence
(b) Combined negligence
(c) Composite negligence
(d) Complimentary negligence
(e) Crowd negligence

Correct Answer Composite negligence

Answer In Composite negligence the injured himself has no hand in the occurance of the accident.
Explanation
(In Contributory negligence, all the parties including the injured had a hand in the
occurance of the accident)
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question7 Section 158(6) of the MV Act requires the Officer-in-charge of the Police Station to forward
the FIR to the insurers and Claims Tribunal within .
(a) 15 days
(b) 30 days
(c) 45 days
(d) 60 days
(e) 7 days

Correct Answer 30 days

Answer Section 158(6) of the MV Act requires the Officer-in-charge of the Police Station to forward
Explanation the FIR to the insurers and Claims Tribunal having jurisdiction within 30 days.

Question8 With regards to role of IT in the growth of insurance companies, success is expected
to come from .
(a) Analytics
(b) Cloud systems
(c) Meta finance
(d) Both 1 and 2
(e) None of the above

Correct Answer Both 1 and 2

Answer With regards to role of IT in the growth of insurance companies, success is expected to
Explanation come from Analytics and Cloud systems.
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question9 Under the permissible heads for assessment, in case of death of a person, which of the
below will be payable ?
(a) Loss of expectancy
(b) Loss of dependency
(c) Funeral expenses
(d) Loss of consortium
(e) All of the above

Correct Answer All of the above

Answer Under the permissible heads for assessment, in case of death of a person, payments are
Explanation made for all the above and also for medical expenses if the deceased was given any
treatment prior to fatality.

Question10 As per Section 14 that deals with the currency of driving licences, a Learners Licence
is effective for .
(a) Three months from the date of issue
(b) Three months from the date of application
(c) Six months from the date of issue
(d) Six months from the date of application
(e) One year from the date of issue

Correct Answer Six months from the date of issue

Answer As per Section 14 that deals with the currency of driving licences, a Learners Licence is
Explanation effective for six months from the date of issue.
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question11 is the discovery and communication of meaningful patterns in data, especially

valuable in areas rich with recorded information.
(a) Business intelligence
(b) Data mining
(c) Analytics
(d) Analysis
(e) Statistics

Correct Answer Analytics

Answer Analytics is the discovery and communication of meaningful patterns in data, especially
Explanation valuable in areas rich with recorded information. Analytics relies on the application of
statistics, computer programming and operations research to quantify performance.

Question12 is used for making application for grant of tourist vehicle.

(a) Form 45
(b) Form 48
(c) Form 51
(d) Form PCA
(e) Form P.R.A

Correct Answer Form 45

Answer Form 45 is used for making application for grant of tourist vehicle.
Explanation
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question13 With reference to basic elements of customer service, for customer to be satisfied
refers to sensitivity of insurer towards quality of repairs made available; degree of
clarification on insured amount; hassle free repairs etc.
(a) Empathy
(b) Responsiveness
(c) Reasonableness
(d) Reliability
(e) None of the above

Correct Answer Responsiveness

Answer Under Basic elements of Customer Service - Responsiveness for customer to be satisfied
Explanation refers to sensitivity of insurer towards quality of repairs made available; degree of
clarification on insured amount; hassle free repairs and various other factors like proper
flow of information, promptness in claim settlement, hassle free reissue of policy
documents etc.

Question14 Insurance Ombudsman has been mandated to perform the function of award making up to
in respect of personal lines of insurance from any person.
(a) Rs. 2 lakhs
(b) Rs. 5 lakhs
(c) Rs. 10 lakhs
(d) Rs. 20 lakhs
(e) Rs. 25 lakhs

Correct Answer Rs. 20 lakhs

 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question15 As per Section 173, no appeal can be filed against the award of the Claims Tribunal if the
amount in dispute is .
(a) More than Rs. 10000
(b) Less than Rs. 10000
(c) More than Rs. 25000
(d) Less than Rs. 25000
(e) There is no such limit

Correct Answer Less than Rs. 10000

Answer As per Section 173, no appeal can be filed against the award of the Claims Tribunal if the
Explanation amount in dispute is less than Rs. 10000.

Question16 When a motor insurance policy is cancelled, the refund of premium is subject to - 1.
Retention of some minimum premium as prescribed under India Motor Tariff 2. Retention
of 50% of the total premium paid due to such cancellation by the insurer 3. There should be
no claims under the policy
(a) Only 2
(b) Only 1 and 2
(c) Only 1 and 3
(d) Only 2 and 3
(e) All 1, 2 and 3

Correct Answer Only 1 and 3

Answer As per GR 24, refund of premium on cancellation of motor insurance policy will be subject
Explanation to:

- No claim under policy,

- Retention of minimum premium prescribed under India Motor Tariff.

 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question17 Describe No Claim Bonus -

(a) It is a discount on premium of the Own Damage portion and third party cover of vehicle
when a policy is renewed, subject to insured has not made any claim during the last policy
period of one year
(b) It is a discount on premium of the Own Damage portion of vehicle when a policy is
renewed, subject to insured has not made any claim during the last policy period of one
year
(c) It is a discount on premium of the Own Damage portion of vehicle when a policy is renewed
for five or more vehicles
(d) It increase the cover provided by insurance company when a policy is renewed, provided
insured has not made any claim during the last policy period of one year
(e) None of the above

Correct Answer It is a discount on premium of the Own Damage portion of vehicle when a policy is
renewed, subject to insured has not made any claim during the last policy period of one
year
Answer NCB is uniform for all types of vehicles. No Claim Bonus is a discount on premium of the
Explanation Own Damage portion of vehicle when a policy is renewed, subject to insured has not made
any claim during the last policy period of one year.

Question18 What are those claims called in which policy particulars are not available despite all efforts
by insurance company who has been served the summons?
(a) Disabled claims
(b) Lost claims
(c) Void claims
(d) Orphan claims
(e) Paternal claims

Correct Answer Orphan claims

Answer Orphan claims are those claims where policy particulars are not available despite all efforts
Explanation by insurance company who has been served the summons. A separate list is maintained
for such claims & provisions are made in the claims register. 1/3rd of the provision are
added
to the figure of outstanding motor claims in the insurer’s final accounts.
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question19 A vehicle has been classified as class 'A-1’ as per the categorization of vehicles into classes.
Which of the below vehicle is this class 'A-1' vehicle?
(a) Private Carriers
(b) Public Carriers
(c) Trailers
(d) MISC & SP Type
(e) Public passenger service vehicles for hire or reward

Correct Answer Public Carriers

Answer The motor vehicles have been classified under 3 categories i.e. Private Cars, Motor Cycles /
Explanation Scooters & Commercial Vehicles. Commercial Vehicles are further classified under various
classes depending upon its usages. Class 'A-1' pertains to Public Carriers.

Question20 Which vehicle has Manish bought if he has bought a vehicle which has been classified under
class ‘E’ as per the categorization of vehicles into classes ?
(a) Trailers
(b) Internal risk only vehicle
(c) Private Carriers
(d) Road transit risks only vehicle
(e) Motor trade (Road Risks) only vehicle

Correct Answer Road transit risks only vehicle

Answer Commercial vehicles have been categorised under various classes of vehicles according to
Explanation their use. Road transit risks only vehicle has been classified under class ‘E’ as per
the
categorization of vehicles into classes.
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question21 The basic elements of customer service is / are _.

1. Empathy
2. Reasonableness
3. Responsiveness
(a) Only 1
(b) Only 2
(c) Only 3
(d) Both 2 and 3
(e) All 1, 2 and 3

Correct Answer All 1, 2 and 3

Answer Basic elements of customer service includes: Reasonableness, Responsiveness & Empathy
Explanation along with various other elements like reliability etc.

Question22 Suresh who was driving his car met with a bad accident and he lost sight of one eye. The
expenses for eye surgery totaled to Rs. 250000. How much amount is receivable to Sameer
under this Package Insurance Policy?
(a) Rs. 100000
(b) Rs. 125000
(c) Rs. 150000
(d) Rs. 200000
(e) Rs. 250000

Correct Answer Rs. 100000

Answer The maximum compensation cannot exceed Rs. 200000 in case of vehicles other than 2
Explanation wheelers. For loss of one eye or one limb, the scale of compensation is 50%. So in this case
it will be 50% of Rs 200000 ie. Rs. 100000.
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question23 India has been divided into some zones for the purpose of rating depending on the location
of the office of registration or maximum use of the vehicle. For Private Cars and Motorized
two wheelers, which of the following cities will be included in Zone A ?
1. Ahmedabad
2. Pune
3. Chennai
(a) Only 1
(b) Only 2
(c) Only 3
(d) All 1, 2 and 3
(e) None of the above

Correct Answer All 1, 2 and 3

Answer Zone A has the following cities - Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata,
Explanation Mumbai, New Delhi and Pune

Zone B - Rest of India.

Question24 For a 'No claim bonus' given under motor insurance policy, which these statement(s) is
correct?
1. The maximum NCB - No claim bonus allowed is 50%
2. The No Claim Bonus cannot be transferred from one insurance company to another
3. No Claim Bonus is allowed on premium for own damage and also on the premium
on third party
(a) Only 1
(b) Only 2
(c) Only 1 and 3
(d) Only 2 and 3
(e) All 1, 2 and 3

Correct Answer Only 1

Answer NCB can be transferred from one insurance company to another & the NCB is allowed on
Explanation premium for own damage only subject to a maximum of 50% of OD premium.
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question25 With respect to transfer of insurance from one party to another, which of the following
statement(s) is/are true?
1. The evidence of sale and surrender of previous certificate of insurance is essential in
case of transfer of package policies
2. Administrative fees can be charged for such transfer by the insurance company
3. For package policies, the transfer of ‘own damage’ section of the policy in favour
of the transferee can be made only on receipt of specific request from the transferee and
clear consent of transferor
(a) Only 2
(b) Only 3
(c) Both 1 and 2 only
(d) Both 2 and 3 only
(e) All 1, 2 and 3

Correct Answer All 1, 2 and 3

Answer In order to transfer of insurance from one party to another, the transferor must apply
Explanation within 14 days from the date of transfer and insurance company may charge administrative
fees for such transfer. For package policies, the transfer of ‘own damage’ section of the
policy in favour of the transferee can be made only on receipt of specific request from the
transferee and clear consent of transferor The evidence of sale and surrender of previous
certificate of insurance is essential in case of transfer of package policies

Question26 Prohibition of Mid Term inclusion / cancellation of extra benefit are not to be permitted
more than .
(a) once during the currency of a policy
(b) twice during the currency of a policy
(c) thrice during the currency of a policy
(d) four times during the currency of a policy
(e) Not permitted

Correct Answer once during the currency of a policy

Answer The provision of mid-term inclusion/cancellation of extra benefits during the currency of
Explanation the policy can be done only once during the currency of policy.
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question27 is not covered under road side assistance service.

(a) Fuel supply
(b) Minor repairs
(c) Towing services in case of riots
(d) Battery jump start
(e) Message relay

Correct Answer Towing services in case of riots

Answer Towing in case of riots is not covered under road side assistance service offered. All other
Explanation assistance is a part of under road side assistance service.

Question28 The time limit for depositing the compensation amount payable by the insurance
company under no Fault Liability is .
(a) 30 days
(b) 45 days
(c) 90 days
(d) 120 days
(e) 180 days

Correct Answer 30 days

Answer Once an award is passed the award has to be deposited within 30 days from the date of its
Explanation announcement as given under Section 168(3) unless either party decides to go in for an
appeal.
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question29 Identify the correct statement(s) –

1. The salvaged / damaged parts for which replacements are allowed becomes the
property of insurance company
2. When the settlement is on repair basis, it is subject to suitable depreciation on parts
replaced
3. The insured is not allowed to opt for his repairer
(a) only 1
(b) Only 1 and 3
(c) Only 1 and 2
(d) Only 2 and 3
(e) All 1, 2 and 3

Correct Answer Only 1 and 2

Answer The insured is allowed to opt for his repairer so that vehicle is repaired to his entire
Explanation satisfaction.

Question30 Mr. Mahesh has a motor insurance policy which has an additional cover for ‘No Claim
Bonus protection’. Unfortunately his car got stolen. He than purchased a new car. Mr.
Mahesh wishes to apply to the insurance company to continue the NCB protection already
availed earlier for his new car. Which document(s) have to be submitted by him?
1. Copy of previous policy
2. Proposal form
3. Declaration of NCB
(a) Only 3
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1 and 3 only
(e) All 1, 2 and 3

Correct Answer All 1, 2 and 3

Answer Mr. Mahesh can avail the No Claim Bonus (NCB) he is entitled to within 3 years of the expiry
Explanation of the previous policy. He has fill up a new proposal form, declare his previous NCB
entitlement & submit the copy of the previous policy.
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question31 'Phat Paht Sewa' permits are given to vehicles which are .
1. 3 wheeled
2. 4 wheeled
3. Battery Operated
4. Seating capacity upto 9
(a) Only 1
(b) Only 3
(c) Both 2 and 4
(d) Both 1 and 4
(e) Both 1 and 3

Correct Answer Both 1 and 4

Answer A Phat Phat sewa permit was earlier issued to motor vehicles that were three wheeled and
Explanation had Harley Davidson engines. Now Phat Phat sewa permits are issued to vehicles that ply
on a fixed route and have a maximum capacity of 10 people including the driver. The fares
are determined by the STA.

The operators using the three wheeled Harley - Davidson engine vehicles were issued Phat
Phat Sewa permits. These vehicles have since been replaced with vehicles having maximum
seating capacity of 9. They ply on a fixed route and charge the fare as per S.T.A. approval.

Question32 The act which governs the power of civil courts is .

(a) Supreme Court Act
(b) High Court Act
(c) Constitution of India
(d) Indian Penal Code
(e) Code of Civil Procedure

Correct Answer Code of Civil Procedure

Answer An Act to consolidate and amend the laws relating to the procedure of the Courts of Civil
Explanation Judicature. The Code of Civil Procedure, 1908 is a procedural law related to the
administration of civil proceedings in India.
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question33 In case of vehicles fitted with bi-fuel system such as Petrol/Diesel and CNG /LPG, permitted
by the concerned RTA, the CNG/LPG kit fitted to the vehicle can be insured separately at an
additional premium of .
(a) 4% on the value of such kit
(b) 4% of IDV
(c) 6% on the value of such kit
(d) 6% of IDV
(e) 8.5% on the value of such kit

Correct Answer 4% on the value of such kit

Answer In case of vehicles fitted with bi-fuel system such as Petrol/Diesel and CNG /LPG, permitted
Explanation by the concerned RTA, the CNG/LPG kit fitted to the vehicle is to be insured separately at
an additional premium @ 4% on the value of such kit to be specifically declared by the
insured in the proposal form and/or in a letter forming part of the proposal form.

Where the vehicle is fitted with only CNG/ LPG engine or where the vehicle is fitted with bi-
fuel system referred above but the value of the CNG / LPG kit is not separately available,
reference is to be made to TAC for advice on rating of Own Damage cover.

An additional premium of Rs. 60/- per vehicle to be charged towards Liability Only cover on
account of CNG/ LPG system.

Question34 Which of these sections are correctly mentioned in accordance with Motor Vehicles Act
1988?
(a) Section 163 - Compensation under Hit and Run motor cases Section 161 - Compensation
under no Fault Liability
(b) Section 161 - Compensation under no Fault Liability Section 163A - Compensation under Hit
and Run motor cases
(c) Section 161 - Compensation under Hit and Run motor cases Section 163A - Special
provisions as to payment of compensation as per structured formula basis
(d) Section 163A - Compensation under Hit and Run motor cases Section 161 - Special
provisions as to payment of compensation on structured formula basis
(e) Section 166 - Compensation under no Fault Liability Section 161- Compensation under Hit
and Run motor cases

Correct Answer Section 161 - Compensation under Hit and Run motor cases Section 163A - Special
provisions as to payment of compensation as per structured formula basis
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question35 No Claim Bonus will be available to the insured, only if he can produce evidence that he
was entitled to No claim bonus from his previous insurance company. This evidence can be
in the form of :
1. Written declaration from the insured
2. Renewal notice
3. Letter from previous insurer confirming No claim bonus
(a) Only 1
(b) Only 2
(c) Both 1 and 2 only
(d) Both 1 and 3 only
(e) All 1, 2 and 3

Correct Answer All 1, 2 and 3

Answer The No Claim Bonus will be available to the insured, provided he can produce evidence that
Explanation he was entitled to No claim bonus from his previous insurance company. Evidence can be in
form of: ‘A renewal notice’, ‘A letter from previous insurer confirming NCB’ and ‘A
written declaration from the insured’.

Question36 Identify the correct statement(s) with respect to Road Side Assistance.
1. The Road side assistance service comes as a default add-on every motor insurance policy
issued in India
2. A maximum of 4 times would be allowed related to the services opted under road
side assistance
3. Road side assistance has to be mandatorily be provided by the insurer to the insured
(a) Only 1
(b) Only 2
(c) Only 3
(d) Both 1 and 2 only
(e) Both 2 and 3 only

Correct Answer Only 2

Answer Certain benefits are limited to once or twice during the policy. However, a maximum of 4
Explanation times would be allowed related to the services opted under road side assistance.
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question37 An award or decree by the MACT should results in actual payment and this is ensured by
the MV Act 1988 by .
(a) allowing the insured to take higher cover of third party liability to ensure sufficient
coverage of damages
(b) making it mandatory for the insured to pay the compensation
(c) making third party insurance obligatory so that no motor vehicle shall be used unless third
party insurance is in place
(d) making it mandatory for the insurance company to pay the compensation
(e) making it compulsory for the insured to ensure that the driver holds proper driver’s
license

Correct Answer making it mandatory for the insurance company to pay the compensation
Answer MV Act 1988 ensures that an award / decree by the MACT results in actual payment by
Explanation making it mandatory for the insurance company to pay the compensation.

Question38 As per India Motor Tariff, private cars are those which have a capacity of .
(a) Below 1000 cc
(b) Between 1000 to 1500 cc
(c) Above 1500 cc
(d) All of the above
(e) None of the above

Correct Answer All of the above

Answer Private cars are classified in to 3 categories
Explanation
1. Not exceeding 1000 cc

2. Exceeding 1000 cc but not exceeding 1500 cc

3. Exceeding 1500 cc
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question39 With respect to data collection by TAC / IIB, which of the following is correct ?
1. The data collection is on a half yearly basis
2. IIB / TAC has devised a standard format for submission of statistics by all insurers
3. The data collected is through standard codes which may be alpha numeric
(a) Only 1
(b) Only 1 and 2
(c) Only 2 and 3
(d) Only 3
(e) All 1, 2 and 3

Correct Answer Only 2 and 3

Answer TAC has devised a standard format for submission of statistics by all insurers and data
Explanation collected is through standard codes, data is collected on quarterly basis and not half-yearly
basis which may be alpha numeric.

Question40 The time limit within which a petition can be made by a petitioner contesting against
a judgment passed by Motor Accidents Claims Tribunal (MACT) is .
(a) 30 days from the date of award
(b) 45 days from the date of award
(c) 90 days from the date of award
(d) 60 days from receipt of intimation
(e) 90 days from receipt of intimation

Correct Answer 90 days from the date of award

Answer An appeal can be filed within 90 days from the date of award, if the awarded amount is
Explanation excessive, inappropriate to age, income status of the victims and any other point of law is
involved.
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question41 Payment is made to the repairer of motor vehicle only after a is received from the
insured that the vehicle has been repaired to his/her satisfaction.
(a) Confirmation letter
(b) Claims log register
(c) Claim form
(d) Satisfaction note
(e) OD Note

Correct Answer Satisfaction note

Answer On receipt of final bill after completion of repairs and a satisfaction note or discharge
Explanation voucher from the insured that the vehicle has been repaired to his satisfaction, payment is
made to the repairer.

Question42 With whom is the 'Special Leave Petition' filed ?

(a) Regional court
(b) District court
(c) High court
(d) Supreme court
(e) MACT

Correct Answer Supreme court

Answer Special Leave Petition (SLP) means that an individual takes special permission to be heard
Explanation in appeal against any high court/tribunal verdict. It can be filed in case a high court refuses
to grant the certificate of fitness for appeal to Supreme Court of India.

Special Leave Petitions in India holds a prime place in the Judiciary of India, and has been
provided as a "residual power" in the hands of Supreme Court of India to be exercised only
in cases when any substantial question of law is involved, or gross injustice has been done.
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question43 Some type of non-life insurers are not allowed to participate in the pooling of risk of third
party covers. Identify - 1. Health Insurers 2. Motor Insurers 3. Re-insurers
(a) Only 1
(b) Only 2
(c) Only 3
(d) Both 1 and 2
(e) All 1, 2 and 3

Correct Answer Only 1

Answer Under Section 110G of the Insurance Act, all non-life insurers are required to participate in
Explanation the pooling arrangement for motor insurance including reinsurance. The health insurers are
not required/ allowed to participate in the pooling of risk.

Question44 Which conditions have to be satisfied in case of depreciation reimbursement add-ons

provided in insurance policies for private cars?
1. The repairs of the car have to be done at the insurers approved repairer
2. Age of vehicle has to be less than 3 years
3. Not more than 3 OD (Own Damage) claims are lodged
(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Both 2 and 3
(e) All 1, 2 and 3

Correct Answer Both 1 and 2

Answer For OD (Own Damage) Claim, the condition is that not more than two OD claims are lodged.
Explanation
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question45 Which form is used to apply for application for a private service vehicle permit?
(a) Form 48
(b) Form PCA
(c) Form P.S.A
(d) Form P.R.A
(e) Form 46

Correct Answer Form P.S.A

Question46 Suresh had bought a new car 3 months back and it met with an accident. What
depreciation will be deducted for parts replaced due to an accident in case age of vehicle is
not exceeding 6 months?
(a) 2.50%
(b) 5%
(c) 10%
(d) 20%
(e) NIL

Correct Answer NIL

Answer In case age of vehicle is not exceeding 6 months, there will no depreciation that will be
Explanation deducted for parts replaced following an accident. However, there would be 50%
depreciation for rubber parts.
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question47 Which of these statement(s) is/are true with regards to display of premium?
1. Own Damage and liability components of premium is required to be rounded off to
nearest rupee.
2. All permissible loadings on / discounts are required to be displayed separately
3. The own damage and liability component may be clubbed together in package policy
schedule
Answer 1 Only 3
(b) Both 1 and 2
(c) Both 2 and 3
(d) Both 1 and 3
(e) All 1, 2 and 3

Correct Answer Both 1 and 2

Answer As per GR 13 with regards to display of premium, all permissible loadings on / discounts
Explanation from tariff rates are required to be displayed separately in policy schedule & the Own
Damage and liability components of premium are required to be rounded off to the nearest
rupee.

Question48 Rishi has taken a learner's driving license for a two wheeler. What doe the Motor Vehicle
Act 1988 state with respect to driving a two wheeler by a learner’s license holder?
(a) Rishi cannot ride himself unless accompanied by a pillion rider who holds a permanent
driver’s license
(b) Rishi can ride the two wheeler himself but if there is a pillion rider than the pillion rider
should have a permanent driver’s license
(c) To drive the two wheeler, Rishi needs to obtain a no objection letter from local RTO to drive
in public areas
(d) Rishi cannot ride himself in public places unless accompanied by a pillion rider who holds a
permanent driver’s license
(e) Rishi can ride himself and if he has a pillion rider, than it is not necessary for the pillion
rider to hold a permanent driver’s license

Correct Answer Rishi cannot ride himself unless accompanied by a pillion rider who holds a permanent
driver’s license
Answer The position of law under the MV Act 1988 with regards to driving a two wheeler by a
Explanation learner’s license holder is that Rishi cannot ride himself unless accompanied by a
pillion
rider who holds a permanent driver’s license.
 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Question49 Mohit was planning to go outstation for a year and he has given a written declaration that
his car will not be in use for one year. He wishes to cover his vehicle for theft for this one
year period without liability only cover. What is the minimum premium he will have to pay
to get this cover?
(a) 0.25% of IDV
(b) 0.50% of IDV
(c) 0.75% of IDV
(d) 1% of IDV
(e) 2% of IDV

Correct Answer 0.50% of IDV

Answer As per GR 45 A, when a written declaration is made that the motor car will not be in use for
Explanation next one year, the premium for theft cover without liability only cover would be 0.50% of
IDV.

Question50 When a motor vehicle is transferred from one owner to another, within how many days can
the new owner of the vehicle apply for a transfer of insurance in his name?
(a) Within 5 days
(b) Within 7 days
(c) Within 14 days
(d) Within 21 days
(e) Within 30 days

Correct Answer Within 14 days

Answer When a motor vehicle is transferred from one owner to another, the new owner has to
Explanation apply for a transfer of insurance in his name within 14 days. A fresh proposal form has to be
filled by the proposer.

PLEASE DO SEND YOUR FEEDBACK ON – [email protected]

ALL THE BEST

 IC 72 – MOTOR INSURANCE
PRACTICE TEST NO. 2

Practice Question Banks also available for :

INSURANCE EXAMS
IC 01 – Principles of Insurance IC 02 – Practice of Life Insurance
IC 11 – Practice of General Insurance IC 14 – Regulation of Insurance Business
IC 26 – Life Insurance Finance IC 27 – Health Insurance
IC 45 – General Insurance Underwriting IC 46 – General Insurance Accounts

NISM

rtification Exam NISM Series V A: Mutual Fund Distributors Certification Exam

itory Operations Certification Exam NISM Series VII: Securities Operations and Risk Management NISM Series VII: Equity Derivatives
aries Compliance Certification Exam NISM Series X A : Investment Adviser (Level 1) Certification Exam NISM Series X B: Investment A
esearch Analyst Certification Exam NISM II A – Registrar to an Issue & Share Transfer Agent NISM IV – Interest Rate Derivatives Cer

NCFM

NCFM Financial Markets: A Beginners Module NCFM Capital Market (Dealers) Module
NSE FIMMDA : Debt Market (Basic) Module NCFM Derivative Market (Dealers) Module