Skill Front Certified Insurance Industry Fundamentals™ (CIIF™) Exam Answers

Related Articles

Microsoft Advertising Retail Media Certification Answers

3 days ago

Microsoft Advertising Retail Certification Answers

3 days ago

Certiprof Design Sprint Foundation Professional Certification Answers

3 days ago

100% FREE Certified Insurance Industry Fundamentals™ (CIIF™)

Join My Whatsapp Group

• CERTIFICATION: Certified Insurance Industry Fundamentals™ (CIIF™) (USD 297.- Value)
• BONUS PROGRAM E-BOOK: 82 Pages (USD 97.- Value)
• BONUS PROGRAM AUDIOBOOK: 52 Minutes, 57 Seconds (USD 50.- Value)
• SHAREABLE & VERIFIABLE DIGITAL BADGE: Your Name Engraved On It, Custom Made For You (USD 99.- Value)

The Skills You’ll Learn:

This certification program will introduce the participants to the basic mechanism of insurance. We are covering the history of insurance, and the concepts which were already understood by the Romans and which are still at the core of this industry today.

Based on the history, we are introducing the concepts of risk pooling, risk transfer and the management of reserves.

This first level also describes the main products and insurance business lines.

Target Group: All people that want to know about the functioning of the insurance industry but also its “language”. Ideal for example for interns and career changers. Employees from insurers and reinsurers (accounting, finance department, IT and all organizational functions)

Subjects Covered:

• CHAPTER 1. Risk Pooling and cash management: When did it start and what did our ancestors discover which is still being used today?
• CHAPTER 2. What were the first insurance policies issued?
• CHAPTER 3. What is the aim of insurance? And what does it bring to our societies?
• CHAPTER 4. What is at the core of “modern insurance”?
• CHAPTER 5. What are the main business lines (General insurance also called Property & Casualty, life insurance, savings accounts, etc) and products?
• CHAPTER 6. How are insurers able to fulfill their promises? Introduction to the asset & liability matching concepts.
• CHAPTER 7. What is the size of the global insurance market?
• CHAPTER 8. What are the legal requirements for insurance (Premium, Excess, Limit of insurance covers, etc)? We are also covering the insurance premium and what is its “well preserved” secret?
• CHAPTER 9. What are the main contractual requirements and the elements of insurance contracts?
• CHAPTER 10. What is the business model of insurers? And how do they make profits? We are covering at a high level their cash flow and introduce you to the concept of solvency (more about this in other programs)
• CHAPTER 11. What are the principles of claims management?

Register Now

Also Check out: Certified Associate In Scrum Fundamentals Exam Answers – SkillFront Exam Answers

Foundations Of Business And Entrepreneurship Exam Answers – SkillFront Entrepreneur Program Exam Answers

Information Security Associate Exam Answers – SkillFront Exam Answers

ISO 9001 Quality Management Systems Associate™ Skillfront Certification Exam Answers

ISO/IEC 20000 IT Service Management Associate™ SkillFront Certification Exam Answers

Skill Front Certified Insurance Industry Fundamentals™ (CIIF™) Exam Answers

QUESTION 1: What did the Chinese Merchants understand which is at the core of the insurance business model?

• To mitigate the risk of losing all their merchandise in the Yangtze River, it is better to move the good by land transportation
• The Chinese Merchants could buy an insurance cover from the Chinese state
• The Merchants could reduce their potential losses by mutualizing their risks
• It is better to keep all their merchandise on one boat and accept the risk of having a total loss in case their boat sinks

QUESTION 2: What did the Babylonian understand almost 2000 years before Jesus Christ?

• You are better off to have your boat to sink with your merchandise than paying back the lender who financed your venture
• Without financing facilities, you cannot ship your goods to another country
• The risk of losing your investment is so high that it is better to not export any goods
• The financial consequences of an existing risk could be transferred for an agreed amount to a third party

QUESTION 3: Why did Romans develop Financing facilities and guarantee the payment of the bills in case of an accident at sea for the cargoes?

• The Romans understood that this was the best way to encourage people to take risks in exporting goods to their colonies
• Like the Chinese before them, the Romans understood that mutualization the risks made it possible to bear some losses
• People would accept to pay a higher interest rate on a loan in order to cover the risk of a loss
• All the above

QUESTION 4: What did the Geneose put in place for the first time to cover a risk?

• An insurance cover which was separated from a loan
• A written contract which stipulated what was the covered risk and its premium. We are calling this today an insurance policy
• The possibility to share the risk among several insurers. We are calling this today “coinsurance”
• All the above

QUESTION 5: What did the Romans discover with regards to the risk of death?

• It is better to have a healthy life in order to minimize the risk of death
• We can mutualise the risk of death and create a “pool” of funds to provide financial protection to the participants in the pool. Death can be covered.
• If you do not put money aside in your lifetime, it is difficult to get a nice burial ceremony
• All of the above

QUESTION 6: How did the Romans manage to pay their “insured” with the collected money?

• They had to limit what they were paying in order to ensure that they had enough money in the pool
• They needed to increase the premiums regularly to always have enough in the pool of money
• Like insurers today, they could increase their pool of money by investing into real estates but also through moneylending to others
• They would never be able to collect enough premium to cover their liabilities

QUESTION 7: How were the Romans able to pay annuities to their soldiers or people who gave them a premium?

• They understood that the interests earned on their investment would be sufficient to pay the annuities
• They limited the payments to a short period
• They selected their clients based on their age, the older the better
• They put in place mortality table to help them to estimate the life expectancy of their clients thus adjusting the future annuity payments

QUESTION 8: What did the Flemish people put in place, back in the 13th century, to their annuity contracts to consider the potential changes to the future costs of life?

• They put in place guarantees which would cover the extra costs of life
• Like insurers today, they were providing the possibility to add Cost of Living Adjustments (COLAs) to an annuity contract
• They did not know how to do this, how could they come up with the additional premium to cover such risk?
• They reduced the period to pay out an annuity

QUESTION 9: What were the Dutch people afraid of with the payment of annuities?

• They were worried to not be able to pay on time to their insured
• They would pay an annuity to the wrong person
• They would not have enough reserves to pay the future annuities
• They would face frauds with the insured being deceased without knowing about it

QUESTION 10: Which statements are correct when talking about insurance?

• Insurance is a transfer of risk from one person to another party
• For insurance, the transfer of risk is done against the payment of an amount of money (a premium)
• Insurance acts as a protection
• All above statements are correct

QUESTION 11: What are the types of firms offering insurance contracts?

• Privately-owned structures
• Policyholders-owned structures also called Mutual
• State-owned structures
• All of the above

QUESTION 12: Which statements correctly capture why the use of the law of large numbers is important for insurers?

• In the field of insurance, the Law of Large Numbers is used to predict the risk of loss or claims of some participants so that the premium can be calculated appropriately.
• The larger the population is calculated, the more accurate predictions. In the field of insurance, the Law of Large Numbers is used to predict the risk of loss.
• The law of large numbers is a statistical concept that relates to probability. It is one of the factors insurance companies use to determine their rates.
• All the above

QUESTION 13: Why are we calling general insurance contracts: “indemnity contracts”?

• These contracts would pay any reparation without reasons
• These policies are “all inclusive” and therefore cover any risks for the insured
• These contracts are paying an indemnity on a regular basis to the clients
• These insurance contracts are “indemnity contracts” because if a loss (accident) does not occur, the insurers do not have to pay anything.

QUESTION 14: What are the types of life insurance products?

• Accident & Health, death covers and investment accounts
• Pension products, Accident & Health and death covers
• Pension products and death covers
• Pure protection products (e.g. payment of a benefit in the event of death) and (ii) savings policies (e.g. the growth of capital with regular or singular premium invested in specific asset classes) combined with a death cover.

QUESTION 15: Why could we compare insurers to squirrels?

• Like squirrels, insurers are investing their assets in different location to avoid that their competitors grab these investments
• Like squirrels, insurers are reducing their risk of losses on their investment by diversifying their portfolio thus investing in different asset classes
• Like squirrels with their nuts, insurers are investing in limited asset classes stocks and bonds
• They are savings in order to have cash for future payments

QUESTION 16: What is the largest market and profit contributor for non-life insurers?

• Household insurance
• Personal insurance
• Travel insurance
• Motor insurance

QUESTION 17: What is the main rule for insurance?

• The risk must be clearly identified in the policy
• The client must sign the insurance contract to have a cover
• Regardless of the claims type, the insurer must pay
• The insured must have an interest in the risk covered

QUESTION 18: What is a deductible in an insurance policy?

• A clause which describes all the exclusions in the contract
• The premium reduction offered to the client
• In case of claim, the amount that the insured will have to pay before the insurer pays its share
• The amount of the premium which can be deducted from the insured’s tax return

QUESTION 19: What is the limit of liability for an insurer?

• The limit of the payment that the insured will have to pay in the case of a claim
• In the case of a claim with a third party, the maximum amount that would be paid to the third party for a dispute
• It is the maximum amount for which an insurer is liable under a given contract
• The amount that an insured owes to an insurer in the case of a claim

QUESTION 20: When does an insurance cover start?

• The cover starts at the date which is stipulated on the contract
• The cover starts only if a premium is paid
• The cover starts only when the premium is paid and at the date stipulated on the contract
• The cover starts when a contract is signed

QUESTION 21: What do insurers have to set-up nowadays in order to fulfil their promises to their customers?

• The insurers must have the operations in place to manage their clients’ policies
• The insurers must be able to service the claims of their customers
• The insurers must compute the right premium for the risks that they are covering
• The insurers must set up balance sheets reserves to ensure that they can pas any claims, losses or benefits promised to their customers

QUESTION 22: What are the main cash inflows for an insurer?

• The premiums paid by the clients
• The income from the investments of the collected premiums
• The recoveries of claims from reinsurers
• All of the above

QUESTION 23: What did the regulators impose to insurers in order to withstand significant losses and unknowns?

• The insurers must invest the collected premium before paying a claim
• The insurers must have collected enough premium before paying a claim
• Regulators have imposed a solvency risk model to ensure that Insurers have the necessary “buffers” to be better able to withstand significant losses and unknowns.
• The issuance of capital to shareholders to withstand major losses

QUESTION 24: Why would we see these results for 2018 as being solid?

• The operating profit went up
• The earnings before taxes went up
• The Solvency II ratio improved
• All the above

QUESTION 25: Based on the above illustration, what did the acquisition of Friends Life insurance to Aviva’s shareholders in 2015?

• More profits to the shareholders
• A better balance sheet
• An increase to the shareholders’ equity
• A destruction of value – the profits attributable to shareholders got reduced

QUESTION 26: What are the main advantages of savings products offered by insurers to those offered by the banks?

• The insurers are offering guaranteed rates of return
• The investments offered by the insurers are safer
• The transfer of the accumulated savings to our heirs is usually tax free
• The insurers have a lower risk of bankruptcy than banks

QUESTION 27: What is the largest danger for insurers when they offer life insurance products with a guaranteed rate of return?

• The customers will find the products unattractive as they can earn more when investing in the stock market on their own
• The customers will not understand that a small part of their premium does not get invested
• The guaranteed rate of return is higher than what the insurer can earn when investing the collected premium
• The clients ask for a better rate of return some years later

QUESTION 28: What are the main problems with unit-linked insurance plan?

• The customers do not have a guaranteed rate of return
• The Terms & Conditions are difficult to understand for the clients
• The brokers and/or agents selling them are receiving a rather high commission
• They offer three benefits to the customers: a life cover, tax savings and wealth creation. As a result, the clients are often surprised with poor returns in the early years of the plan.

QUESTION 29: What is an annuity insurance product?

• A way for the clients to create a savings pool for their future
• An insurance which covers annually a risk
• A life insurance product which covers the risk of a death of a person as long as the premium is paid on time
• It is a contract that provides an income for a specified period, such as several years or for life

QUESTION 30: What are the pay-out schemes for life insurance?

• The beneficiaries can get a full payment of the lump sum
• The beneficiaries can invest the benefits in another insurance product
• The beneficiaries can receive an annuity payment or a lump sum payment
• The insured can get a deferred payment in case of death