C16 BUSINESS OF INSURANCE – PRACTICE
EXAM WITH CORRECT ACTUAL
QUESTIONS AND CORRECTLY WELL
DEFINED ANSWERS LATEST ALREADY
GRADED A+ 2025 – 2026
What behaviour is key for an insurance professional like
Tina - ANSWERS-Operate with integrity and ethically
• Character education teaches right from wrong
• Features related to one's good character in business are
discipline, integrity, and responsibility
• Industry members must focus on clients' interests,
• conduct themselves with integrity,
• provide quality service,
• respect confidentiality,
,• conduct themselves honourably,
• work continuously to maintain their competency in their
chosen profession
Importance of operating with trust - ANSWERS-The notion
and operation of trust enables societies to function
economically
• When unethical insurance business practice comes to the
attention of insurance regulators, a severe backlash can be
expected
• There will always be rogue operators whose unethical
practices cause mainstream insurance professionals to
lament
• Those who routinely deny claims without cause can expect
regulators to come down hard on the entire industry with
regulatory intervention and additional burdens
• These actions can harm the industry's reputation
. Importance of a code of ethics - ANSWERS-• Codes of
ethics in the industry must include certain basic principles of
professional conduct
• A formal code of ethics can be shared with everyone
, • It provides a framework for good governance through a
set of principles and values that promotes transparent
conduct
• It can also help to restore public trust in the insurance
industry
• It can help to improve overall credibility
List and explain the three elements an insurance company
considers when evaluating its overall outstanding claims
reserve. - ANSWERS-page 4-23. Outstanding claims reserve
or claims liabilities, is an entry on an insurer's balance sheet
and represents the gross claims reserves necessary to settle
all claims due to claimants. It includes reserve estimates
from:
1. case reserves--all reserves for loss and claims expenses as
posted and estimated by the claims department
2. Incurred but not reported--IBNR, which is calculated by
actuaries, and represents an estimate of claims that have
occurred, but have not yet been reported. it also includes
provisions for PfAD, which is provision for adverse
deviation, which is where case reserves are insufficient to
settle the loss.
3. Bulk claims expense reserve estimated by actuaries for
unallocated claims expenses, such as the internal cost to
EXAM WITH CORRECT ACTUAL
QUESTIONS AND CORRECTLY WELL
DEFINED ANSWERS LATEST ALREADY
GRADED A+ 2025 – 2026
What behaviour is key for an insurance professional like
Tina - ANSWERS-Operate with integrity and ethically
• Character education teaches right from wrong
• Features related to one's good character in business are
discipline, integrity, and responsibility
• Industry members must focus on clients' interests,
• conduct themselves with integrity,
• provide quality service,
• respect confidentiality,
,• conduct themselves honourably,
• work continuously to maintain their competency in their
chosen profession
Importance of operating with trust - ANSWERS-The notion
and operation of trust enables societies to function
economically
• When unethical insurance business practice comes to the
attention of insurance regulators, a severe backlash can be
expected
• There will always be rogue operators whose unethical
practices cause mainstream insurance professionals to
lament
• Those who routinely deny claims without cause can expect
regulators to come down hard on the entire industry with
regulatory intervention and additional burdens
• These actions can harm the industry's reputation
. Importance of a code of ethics - ANSWERS-• Codes of
ethics in the industry must include certain basic principles of
professional conduct
• A formal code of ethics can be shared with everyone
, • It provides a framework for good governance through a
set of principles and values that promotes transparent
conduct
• It can also help to restore public trust in the insurance
industry
• It can help to improve overall credibility
List and explain the three elements an insurance company
considers when evaluating its overall outstanding claims
reserve. - ANSWERS-page 4-23. Outstanding claims reserve
or claims liabilities, is an entry on an insurer's balance sheet
and represents the gross claims reserves necessary to settle
all claims due to claimants. It includes reserve estimates
from:
1. case reserves--all reserves for loss and claims expenses as
posted and estimated by the claims department
2. Incurred but not reported--IBNR, which is calculated by
actuaries, and represents an estimate of claims that have
occurred, but have not yet been reported. it also includes
provisions for PfAD, which is provision for adverse
deviation, which is where case reserves are insufficient to
settle the loss.
3. Bulk claims expense reserve estimated by actuaries for
unallocated claims expenses, such as the internal cost to
