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Exam GIINT
Society of
Actuaries Introduction to General Insurance GIINT
Canadian
Institute of February 10, 2014
Actuaries 8:30 am–10:00 am
DIRECTIONS
1. DO NOT BREAK THE SEAL OF THE BOOKLET UNTIL 4. Answer sheets are mechanically scored. BE SURE THAT
THE SUPERVISOR TELLS YOU TO DO SO. EACH MARK IS BLACK AND COMPLETELY FILLS
ONLY THE INTENDED ANSWER CIRCLE. Make no stray
2. This test consists of 60 multiple-choice test questions. You marks on the answer sheet. Choose only one answer for each
will have a total of one and a half hours in which to answer question. If you change an answer, erase your first mark
them and record your answers on the answer sheet. NO completely and mark your new choice.
ADDITIONAL TIME WILL BE ALLOWED FOR CODING
YOUR ANSWER SHEET. Failure to stop writing or coding 5. Use the blank portions of booklet pages and the tablet of paper
your answer sheet after time is called will result in the provided for your scratch work.
disqualification of your answer sheet and possible further
disciplinary action. 6. Do not spend too much time on any question. If a question
seems too difficult, go on to the next question. You may return
3. There are five answer choices for each question, lettered (A) to unanswered questions if you finish before time is called.
through (E). Answer choices for some questions have been
rounded. For each question, choose the best answer. On your 7. Your score will be based on the number of questions that
answer sheet, find the row of circles with the same number as you answer correctly. There will be no deduction for wrong
the question. Then find the circle in that row with the same answers. Therefore, it is to your advantage to answer every
letter as your answer. Use a soft lead pencil and blacken the question.
circle completely. INDICATE ALL YOUR ANSWERS ON
THE ANSWER SHEET. No credit will be given for anything 8. After time is called, the supervisor will collect the booklet and
written in the booklet. your answer sheet separately. DO NOT ENCLOSE THE
ANSWER SHEET IN THE BOOKLET. All booklets and
Example Sample Answer answer sheets must be returned. THE QUESTIONS ARE
CONFIDENTIAL AND MAY NOT BE TAKEN FROM THE
Calculate the value of x in EXAMINATION ROOM.
the equation x + 6 = –3 .
©2014 by the Society of Actuaries. All rights reserved.
(A) –9 Society of Actuaries
(B) –3 475 N. Martingale Road, Suite 600
(C) –2 Schaumburg, IL 60173-2226
(D) 3
(E) 9
** BEGINNING OF EXAMINATION **
INTRODUCTION TO GENERAL INSURANCE
NOTE concerning this sample exam – The order in which the questions appeared on a
particular CBT administration of the exam is different from this sample.
1. Which of the following is NOT an operating goal of an insurer?
(A) Comply with legal requirements.
(B) Concentrate risk.
(C) Meet customer needs.
(D) Earn a profit.
(E) Fulfill its duty to society.
2. What are the three core functions that exist within a typical insurer?
(A) Accounting, actuarial, and underwriting.
(B) Actuarial, claims, and underwriting.
(C) Accounting, marketing and distribution, and sales.
(D) Claims, marketing and distribution, and underwriting.
(E) Actuarial, marketing and distribution, and sales.
EXAM GIINT: February 2014 - 2 - GO ON TO NEXT PAGE
Introduction to General Insurance
3. Which of the following errors is the most significant problem in measuring insurer
profitability?
(A) Errors in setting adequate rates.
(B) Errors in estimating future investment returns.
(C) Errors in estimating loss reserves.
(D) Errors in estimating sales growth.
(E) Errors in classification of loss exposure units.
4. Which of the following is NOT a reason insurers are subject to governmental regulation?
(A) Protect consumers against fraud.
(B) Guarantee insurer profit.
(C) Maintain insurer solvency.
(D) Prevent unfair discrimination.
(E) Protect consumers against unethical marketing behavior.
EXAM GIINT: February 2014 - 3 - GO ON TO NEXT PAGE
Introduction to General Insurance
5. Which of the following is the primary reason insurer solvency is monitored by
regulators?
(A) Insurers hold large sums of money for the benefit of consumers.
(B) Insurers are inherently financially unstable.
(C) The cost of insurer insolvencies is shifted to taxpayers.
(D) Solvency of insurers is easily measured without much cost.
(E) The claims-paying ability of insurers can be analyzed by most consumers and
businesses.
6. Which of the following are the three major goals of insurance rate regulation?
(A) Ensure that rates are adequate, are not excessive, and are unfairly discriminatory.
(B) Ensure that rates guarantee insurance company solvency, are affordable, and are
not overly complex.
(C) Ensure that rates do not allow insurers excessive or unreasonable profits, are high
enough to pay all claims and expenses, and result in fair, consistent, and equitable
charges among all insured groups.
(D) Ensure that rates are not affected by competition, are not excessive, and are not
discriminatory.
(E) Ensure that rates are actuarially sound, are affordable to all, and are equitable.
EXAM GIINT: February 2014 - 4 - GO ON TO NEXT PAGE
Introduction to General Insurance
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