lOMoAR cPSD| 52021443
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, lOMoAR cPSD| 52021443
May/June 2024
ISR3702
LIFE INSURANCE
Total: 70 marks
Duration of examination session: three hours
Instructions
1. Round off the figures in instances where calculations are applicable to
a zero decimal.
2. The use of The Invigilator app is compulsory for ISR3702
examinations.
3. The QR code is provided in the separate enclosed document on this
platform.
4. The examination rules enclosed in your examination timetable apply.
5. Answer all questions. Note that question 1 has 25 questions that count
two marks each.
Downloaded by Master Vincent ()
, lOMoAR cPSD| 52021443
Question 1
[50 marks]
Use the following information relating to the Taxi
Association to answer the questions in this section:
Information about the insured
At its last board meeting, the Taxi Association added a
requirement for operating in the industry. The
requirement is that every taxi owner must ensure it
employs taxi drivers who have a death policy of at least
R20 000 sum assured. This decision was motivated by
the fact that the board attended a risk financing
workshop where life insurance was discussed as part of
Downloaded by Master Vincent ()
, lOMoAR cPSD| 52021443
risk financing. According to data collected by the Taxi
Association, a total of 100 000 applications from taxi
drivers were submitted to the Life Insurer. The board is
currently investigating if the school-attending children
of taxi drivers could be insured for R15 000 sum
assured. A maximum of ten children per driver will be
insured by the Taxi Association.
Information of the insured
The Life Insurer accepted all 100 000 applications from
individual taxi drivers of the Taxi Association without
any proposed changes since all the required
information was submitted. In addition, the Life
Insurer observed that 60% of the applications were
received from female drivers who were 28 years of age
while the rest of the applications were received from
male drivers who were 32 years of age.
The Life Insurer used the following information to
underwrite the applications from individual taxi drivers:
(i)Underwriting
Applications received from male drivers were all
substandard risks and subject to 3% premium loading.
Underwriting expenses were estimated at R88 900.
Downloaded by Master Vincent ()
Downloaded by Master Vincent ()
, lOMoAR cPSD| 52021443
May/June 2024
ISR3702
LIFE INSURANCE
Total: 70 marks
Duration of examination session: three hours
Instructions
1. Round off the figures in instances where calculations are applicable to
a zero decimal.
2. The use of The Invigilator app is compulsory for ISR3702
examinations.
3. The QR code is provided in the separate enclosed document on this
platform.
4. The examination rules enclosed in your examination timetable apply.
5. Answer all questions. Note that question 1 has 25 questions that count
two marks each.
Downloaded by Master Vincent ()
, lOMoAR cPSD| 52021443
Question 1
[50 marks]
Use the following information relating to the Taxi
Association to answer the questions in this section:
Information about the insured
At its last board meeting, the Taxi Association added a
requirement for operating in the industry. The
requirement is that every taxi owner must ensure it
employs taxi drivers who have a death policy of at least
R20 000 sum assured. This decision was motivated by
the fact that the board attended a risk financing
workshop where life insurance was discussed as part of
Downloaded by Master Vincent ()
, lOMoAR cPSD| 52021443
risk financing. According to data collected by the Taxi
Association, a total of 100 000 applications from taxi
drivers were submitted to the Life Insurer. The board is
currently investigating if the school-attending children
of taxi drivers could be insured for R15 000 sum
assured. A maximum of ten children per driver will be
insured by the Taxi Association.
Information of the insured
The Life Insurer accepted all 100 000 applications from
individual taxi drivers of the Taxi Association without
any proposed changes since all the required
information was submitted. In addition, the Life
Insurer observed that 60% of the applications were
received from female drivers who were 28 years of age
while the rest of the applications were received from
male drivers who were 32 years of age.
The Life Insurer used the following information to
underwrite the applications from individual taxi drivers:
(i)Underwriting
Applications received from male drivers were all
substandard risks and subject to 3% premium loading.
Underwriting expenses were estimated at R88 900.
Downloaded by Master Vincent ()
