This document contains a practice exam for Part A and C of the PCE (Professional and Commercial Examination). Part A focuses on the basics of insurance, including definitions of key terms like insurance, risk, and probability. It also covers topics like the development of the insurance industry, regulation of insurance in Malaysia, risk management techniques, and characteristics of insurable risks. Part C focuses specifically on life insurance, testing knowledge of topics like determining premium rates, concepts of utmost good faith and insurable interest. The exam contains multiple choice questions testing understanding of these insurance fundamentals.

1. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 1
PCE A & C
SET B
ENGLISH
AGENCY TRAINING & DEVELOPMENT DEPT.
AIA CO. LTD

2. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 2
PART A : The basic of insurance
1. An arrangement whereby individual losses are shared by members of a group facing
similar risk exposure is called ________________.
A. Risk B. Contract
C. Insurance D. Investment
2. Which of the following regarding insurance is wrong?
A. It is an economic institution.
B. It is based on the principle of profit acquisition
C. Its objective is to accumulate funds to pay for claims.
D. Only certain risks can be insured against.
3. Which of the following is NOT covered by General Insurance?
A. The value of life B. Motor Vehicles
C. Marine and aviation D. Products or goods sold
4. The earliest beginning of insurance were in the field of _________.
A. Motor Insurance B. Life Insurance
C. Fire Insurance D. Marine Insurance
5. The insurance industry in Malaysia had been largely patterned on the ________
system.
A. American B. British
C. Indian D. Holland
6. In order to standardize and control the insurance business in Malaysia, the first
Insurance Act was introduced in ____________.
A. 1996 B.1957
C. 1963 D.1972
7. Which of the following is not a method of handling risk?
A. Prevention B. Retention
C. Control D. Elimination

3. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 3
8. ____________ refers to an area of study which measures the chance of occurrence of
a particular event.
A. Possibility B. Probability
C. Uncertainty D. Prediction
9. Empirical Probability is determined on the basis of ____________.
A. government date B. total number of possible event
C. historical data D. judgement of a person
10. The risk that affects the entire economy or large number of people / groups within the
economy is called ______________.
A. Fundamental Risk B. Particular Risk
C. Speculative Risk D. Major Risk
11. The situation where there is the possibility of profit, loss or no loss is _____________.
A. Pure Risk B. Speculative Risk
C. Particular Risk D. Fundamental Risk
12. Loss Control measures handle risks by :
I. Loss Prevention
II. Loss Minimisation
III. Loss Prediction
IV. Loss Avoidance
A. I & II B. II & III
C. I & IV D. III & IV
13. The systematic approach to dealing with risks that threaten assets and earnings of a
business or enterprise is called ________________.
A. Risk Management B. Risk Conservation
C. Risk Diversion D. Risk Avoidance

4. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 4
14. The following arrangement of Risk Management is wrong, kindly rearrange them
according to sequence.
I. evaluating potential losses
II. implementing the risk management program
III. selecting techniques of risk handling
IV. identifying loss exposures
A. I, III, II, IV B. IV, II, III, I
C. IV, I, III, II D. III, II, I, IV
15. Which of the following is NOT the characteristics of insurable risk?
A. Involved losses with financial value.
B. They must be a large number of similar risks.
C. Concerned with speculative risk only.
D. Must have insurable interest.
16. When a loss is one that is accidental and unintentional, it is ___________________.
A. Forfuitous losses B. Catastrophic losses
C. Containable losses D. Unintentional losses
17. There must be a large number of similar risk before any one of the risks is capable of
being insured, the reasons are :
I. To enable the insurer to predict losses more accurately.
II. If there are only few risks, the principle of losses of a few to be borned by many
cannot be applied.
III. The insurance company can charge higher premium.
IV. To enable the insurer to calculate a loading.
A. I, II & IV B. I & III
C. II, III & IV D. I & II
18. ________________________ is to advise the takaful company on its operations in
order to ensure that it does not involve in any element which is not approved by the
Syariah.
A. Takaful Supervisory Council
B. Takaful Act 1984
C. Syariah Council
D. Syariah Supervisory Council

5. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 5
19. The principle of subrogation arises out of the principle of ____________________.
A. Insurable Interest
B. Indemnity
C. Utmost Good Faith
D. Assignment
20. What is the proximate cause?
A. least dominant cause attributed as the cause of loss.
B. the most dominant cause attributed as the cause of loss.
C. is not a cause for claims.
D. not a cause for liability of the insurer.
21. Which of the following is NOT the special legal principles embodied in insurance
contract?
A. Insurable interest
B. Contribution
C. Claim
D. Indemnity
22. What is assignment?
A. is a transfer of rights or privilege of a property to another.
B. is a transfer of rights and liabilities by one person to another.
C. is a transfer of risk to another person.
D. all of the above.
23. Utmost Good Faith is breached when the proposer who knows or is reasonably
expected to know the material fact is ______________________.
I. Fails to disclose
II. Been misrepresents
III. Been disclose fully and accurately
IV. Been loss by the company
A. I & II B. I & III
C. I, II & III D. II & IV
24. Which of the following is NOT a payment method of indemnity?
A. Cash B. Repair
C. Loss Retention D. Reinstatement

6. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 6
25. “Mudharabah” is defined as a contractual agreement between _______________.
I. Investor
II. Trustee
III. Entrepreneur
IV. Capital Provider
A. I & II B. II & III
C. III & IV D. I, III & IV
26. The most accurate defination for “Tabaruk” is _________________.
A. To withdraw
B. To donate
C. To transfer
D. To contribute
27. In which part of The Takaful Act 1984 discuss about mode and conduct of Takaful
business such as restriction, operations, establishment and maintenance of Takaful
fund and allocation surplus.
A. Part I
B. Part II
C. Part III
D. Part IV
28. Perils which have been expressly excluded from the policy called _____________.
A. Unknown Perils
B. Excluded Perils
C. Insured Perils
D. Uninsured Perils
29. The principle requires the insurers to restore the insured to the same financial position
as he/she had enjoyed immediately before the loss called _______________________.
A. Indemnity
B. Utmost Good Faith
C. Contribution
D. Subrogation

7. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 7
30. Perils which is not mentioned in the policy and therefore not covered by the policy
unless they occur as a result of an insured perils are known as ___________________.
A. Unknown Perils
B. Insured Perils
C. Excluded Perils
D. Uninsured Perils
31. When an insurance company organizes its department on a functional basis, the basic
function and decision making tend to be centralized at the head office. What is the
disadvantage of centralization?
A. Faster in making quotation.
B. Prompt service to the public.
C. Delay in making quotation.
D. Delay in prospecting.
32. Which of the following are the main components of insurance market?
I. Buyers
II. Sellers
III. Bankers
IV. Service Specialist
A. I & II B. I, II & IV
C. I, II & III D. III & IV
33. The department involved in setting the selection criteria, selects the risk and determine
the premium, term and conditions of new business and renewal.
A. Audit Department
B. Underwriting Department
C. Policy Service Department
D. Actuarial Department
34. When action of insurance company is centralized, all the process are concentrated at
the ____________________.
A. branch office
B. head office
C. agents office
D. brokers office

8. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 8
35. Which of the following is NOT the main objectives of the Malaysian Insurance
Institute (MII)?
A. To provide and maintain central organization for promotion of efficiency, progress
and general development among persons engaged in the insurance industry.
B. To establish a library for the purpose of the institute.
C. To under take research in field of insurance and other related subjects.
D. To promote and represent the interests of the members companies and the life
insurance industry.
36. What do u understand about insurance company in centralized?
A. All policy drafting, renewals and claims are handled by Director of Agency.
B. All policy drafting, renewals and claims are handled by Director of Company.
C. All policy drafting, renewals and claims are handled at Headquarters.
D. There is no branches.
37. The surplus of a mutual insurance company are shared among __________ and the
profits made by the operations of the proprietary company are distributed among its
____________.
A. Shareholders, policyholders
B. Policyholders, shareholders
C. Contract holders, shareholders
D. Policyholders, brokers
38. This party normally acts on behalf of the insured and normally not tied to any one
insurer.
A. Universal Agent
B. Insurance Dealers
C. Special Agent
D. Insurance Broker
39. A cooperative society transacting insurance business may be termed as a __________.
A. Multi-Level Insurers
B. International Insurer
C. Mutual Insurer
D. Universal Insurer

9. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 9
40. Life Insurance Association of Malaysia (LIAM) was established in _______________.
A. 1981
B. 1972
C. 1963
D. 1974
41. Which of the folllowing association paid compensation or allowance to victims of
motor accidents where the ‘uninsured drivers’ are unable to meet their liability from
their own personal resources.
A. PIAM
B. MII
C. MIB
D. None of the above.
42. Insurers will share the burden of paying claims particularly those involving large
amount with _____________________.
A. LIAM
B. Agents
C. PIAM
D. Reinsurers
43. LIAM is the _______________________________________________.
A. representative body of life insurers
B. representative body of life insurance agents
C. representative body of general insurance agents
D. representative body of brokers
44. The Code of Ethics was established by ___________________________________.
A. Insurance Act 1996
B. PIAM
C. LIAM
D. ASM
45. Objective of self-regulation by the insurance industry are as follow, EXCEPT :
A. Provide some element of protection to insurance consumers.
B. Instil discipline in the insurance industry.
C. Promote healthy competition.
D. Provide the larger market for insurers.

10. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 10
46. The objective of the Insurance Mediation Bureau is to provide dispute resolution
procedures for policyholder and _____________________.
A. Insurers
B. Agents
C. Brokers
D. Reinsurers
47. The Director General of Insurance (DGI) is empowered to supervise insurance
companies and other things such as the following actions, EXCEPT :
A. Inspect books and other documents of the insurer.
B. Investigate into the business of the insurer.
C. Issue directions regarding the conduct of the insurer’s business.
D. Control over the property, management, employees of the insurer.
48. In some instances, the insurer may not accept a proposal on its original terms but may
offer to provide insurance on different terms. This transaction called :
A. Offer and acceptance
B. Counter-offer from insurer
C. Counter-offer acceptance
D. Counter-offer from insured
49. Insurance contract is a legally binding agreement between :
I. Government
II. Insured
III. Insurer
IV. Broker
A. I & II B. II & III
C. III & IV D. I & IV
50. In general and life insurance contracts, the insured’s consideration is _____________.
A. to pay premium on time
B. to promise to accept the policy
C. to submit the proposal form
D. to promise to accept the loss

11. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 11
51. The agreement are said to be “consensus ad idem”, that is:
A. Both parties are not in agreement.
B. Both parties are in an agreement.
C. Both parties are in total agreement.
D. No agreement between both parties.
52. A ____________ contract will remain valid until the aggrieved party exercises the
option to treat it void.
A. Void
B. Voidable
C. Unenforceable
D. All of the above.
53. An insurance contract is a legally binding agreement between an insured and his
insurer. The essentials of an insurance contract requirements are :
I. Intention to create legal relationship
II. Offer and acceptance
III. Consent- consensus ad idem
IV. Consideration
A. I & II B. II & IV
C. I , II & III D. All of the above
54. The agent can act only within the authority granted to him by the principal. The
granted authority may be ___________________.
A. Expressed
B. Implied
C. Apparent
D. All of the above
55. Agent is given authority which is expressly stated in writing, it is called :
A. Express authority
B. Implied authority
C. Apparent authority
D. Usual authority

12. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 12
56. The relationship of principal and agent may be terminated by the following acts,
EXCEPT :
A. by notice of revocation
B. by notice of renunciation
C. by mutual contract
D. by mutual agreement
57. The functions of selecting market segments which have similar needs for policies
developed by the company is called _____________________.
A. Market Diversification
B. Market Identification
C. Market Development
D. None of the above
58. A market-oriented agent will do the following, EXCEPT :
A. Satisfy the need of customers.
B. Make profit for himself.
C. Use a sales plan and coordinate it with market analysis, segmentation and targeting.
D. Develop and design insurance products.
59. Please identify which of the following is NOT part of the customer buying decision
process.
A. Problem recognition
B. Information search
C. Handling objection
D. Post-purchase evaluation
60. Based on the studies conducted by U.S.A. indicating that the most important factor for
the selection of a particular insurer is ______________________.
A. The reputation of the agent
B. The reputation of the insurer
C. The products of the insurer
D. The location of the insurer

13. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 13
61. When selling is done indirectly by establishing goodwill between the agent and his
customer, it is called :
A. Order Selling
B. Creative Selling
C. Missionary Selling
D. Massive Selling
62. Which of the following is the evidence of premium payment for the policyholder?
A. Official Receipt
B. Premium Notice
C. Policy Register
D. Proposal Form
63. A due payment shall be paid on the date specified in the policy contract. However,
most contracts provide that such payments can be made within 30 days from the due
date. It is called ________________________.
A. Lapse Period
B. Grace Period
C. Expiry Period
D. Allowance Period
64. The agent is helping the customer to uncover his needs and recommend policies to
meet those needs. This selling techniques is called ____________________.
A. Order Selling
B. Creative Selling
C. Missionary Selling
D. Massive Selling
65. Which of the following is NOT true for mode of payment?
A. Premium can be paid by yearly, half yearly, quarterly and monthly installment.
B. Yearly premium is the lowest premium paid.
C. Monthly premium can be collected through home service.
D. Monthly premium involves the least administrative work.

14. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 14
PART C : Life Insurance
66. When determine the premium rate, which of the following was not taken into account
by the insurance company?
A. Mortality
B. Expenses
C. Tax
D. Political fees
67. The term “Uberrima fides” is referring to :
A. Insurable Interest
B. Claim
C. Utmost Good Faith
D. Moral Hazard
68. A contract where one party provides something of value to another party in exchange
for a promise that the other party will perform a stated act if a specified, uncertain
event occurs is called an :
A. Investment contract
B. Aleatory contract
C. Unilateral contract
D. Offering contract
69. Which of the following situation do not have insurable interest?
A. A person insuring his own life.
B. A creditor insuring the life of his debtor.
C. An employer insuring the life of his key employee.
D. A brother insuring the life of his sister.
70. Section _______ of the Insurance Act 1996 elaborates on the principle of insurable
interest.
A. 150
B. 152
C. 155
D. 154

15. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 15
71. For life insurance contracts, the risk to be insured _____________ with time.
A. decreases
B. increases
C. remain
D. end
72. Which of the following parties need to observe the principle of Utmost Good Faith?
I. The insured
II. The agent
III. The insurer
IV. The legislator
A. I, II & III B. I & III
C. II & IV D. II, III & IV
73. In general insurance, the insured risk may not increase with duration, and in fact may
decrease due to ________________________________________.
A. the age of the insured decrease.
B. the value of the property depreciates.
C. better safety measures taken by insurer.
D. better safety measures taken by insured.
74. Employer of ABC company purchased a group insurance for his employees. What will
happen to the group insurance if one of his employee leaves the company?
A. The group policy will be terminated.
B. The group policy will be continue as usual.
C. The premium will be reduced accordingly.
D. The benefits for the group policy will be increased for each existing employees.
75. Participants in Family Takaful Plans may elect to incorporate any of the following
supplementary benefits :
I. Permanent Total Disability
II. Critical Illness Benefit
III. Personal Accident
IV. Hospitalization Benefit
A. I, II & III B. I, III & IV
C. II, III & IV D. All of the above

16. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 16
76. “This contract is mainly for protection purpose and the main benefit is generally
guaranteed.” Which of the following contract describe the above statement?
A. Participating Contract
B. Non – participating Contract
C. Endowment
D. Annuities
77. Level Life Annuity Contract can be defined as a ___________________.
A. Chooseable mode of payment by survival within a fixed period of time.
B. Lump sum payment made during a fixed period of time.
C. Periodic payment made during a fixed period of time or for the duration of the
survival of a designated life or lives.
D. Lum sum payment made during a variable period of time.
78. Which of the following policies would you recommend to a customer who needs to
prepare an education fund for their children. (Choose the BEST answer)
A. Whole Life Policy
B. Investment-Linked Policy
C. Group Policy
D. Endowment Policy
79. What is the minimum age limit required to participate in Takaful Plan?
A. 16
B. 18
C. 15
D. 17
80. In Takaful, a person who joins any of the Family Takaful Plan become a __________.
A. Participant
B. Policyholder
C. Insured
D. Contributor
81. Mr. Lim bought a life insurance of RM100 000 and RM50 000 accident benefit. If he
died due to accident, how much can he claim from the insurance company?
A. RM100 000 B. RM50 000
C. RM150 000 D. Nothing

17. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 17
82. Which of the following is true about the group insurance?
I. It cannot issued to unions, trust and other entities
II. Group insurance may extend to cover employee’s spouse and eligible children.
III. The employee does not need to go for medical check up.
IV. Group insurance must be a monthly renewable contract.
A. I, II & III B. II & IV
C. II & III D. II, III & IV
83. Which of the following policy generally utilise to cover loans which is gradually
being repaid?
A. Level Term Insurance
B. Convertibility Features
C. Renewable Term Insurance
D. Decreasing Term Insurance
84. Family Takaful benefits are divided into three (3) main portion as below EXCEPT :
A. Permanent Disability Benefit
B. Death Benefit
C. Maturity Benefit
D. Surrender Value Benefit
85. Endowment insurance can be used as ________________________.
A. An incentive to save in a systematic manner.
B. A mean of accumulating a fund for specific purposes.
C. A mean of hedging against the possibility of untimely death.
D. All of the above.
86. A convertible term is a term where ___________________________.
A. it can be converted to any sum assured at the client’s choice.
B. it can be converted to another term insurance and whole life
C. it can be converted to any permanent plan such as term plan or endowment plan.
D. it can be converted to any permanent plan such as whole life or endowment plan.

18. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 18
87. Which type of policy is the purest form of permanent contract, can be issued with
or without participating and provides larger amount of life cover than any other
permanent type of life insurance?
A. Limited Payment Whole Life Policy
B. Ordinary Life Policy
C. Whole Life Endowment Policy
D. Anticipated Endowment
88. For Deferred Annuity, if death occurs before the annuity payment commences ______.
A. the annuity will be terminated
B. the premium paid are returned to the deceased’ s family.
C. the premium will be forfeited to the company.
D. the company will pay the sum assured to the nominee.
89. Which of the following statements are false?
I. Renewable term can be renewed with evidence of continued good health.
II. At the time of renewal, increased premium will be charged based on the attained
age of the life assured.
III. An annuity certain is a life annuity where in the return for the payment of a certain
sum, known as the purchase money , the office makes a series of yearly, half
yearly or quarterly payments for a specified number of years.
IV. The joint life annuity promises to pay the sum assured in the event of the death
of the last survivor.
A. I , II & III B. I, II & IV
C. II, III & IV D. I, III & IV
90. The Contract of Group Insurance is solely between the insurance company and the
employer who is named in ____________ as the _______________.
A. Master Policy ; Owner
B. Master Piece ; Owner
C. Master Policy; Grantee
D. Master Piece; Owner

19. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 19
91. Premium paid by the client is divided into the following components,
I. Expense related
II. Investment related
III. Benefit charges
IV. Mortality cost related
A. II, III & IV B. I, II & III
C. I, II & IV D. All of the above
92. One of the Children’s Insurance is Protected Educational Policies. In this form of
insurance, the policy is issued on the life of the ___________. The _________ is
designated as the beneficiary.
A. Child ; Mother
B. Child ; Parent
C. Child ; Child
D. Parent ; Child
93. In Group Insurance, if the employer pays all the cost or in other words, the plan is
___(I)____, __(II)___ of all the eligible employees must join.
If the employer and employees share the cost, the plan is ____(III)______, at least
__(IV)___ of all eligible employees must join.
A. (I) Master Plan, (II) 90%, (III) Non-Master Plan, (IV) 100%
B. (I) Master Plan, (II) 100%, (III) Non-Master Plan, (IV) 75%
C. (I) Non-Contributory, (II) 100%, (III) Contributory, (IV) 75%
D. (I) Non-Contributory, (II) 75%, (III) Contributory, (IV) 100%
94. Which are the true statements regarding Guaranteed Immediate Annuity?
I. This contract provides guaranteed payments over a fixed period before the death of
the annuitant.
II. This is a normal life annuity.
III. The annuity payment will cease on death of the annuitant.
IV. The annuity payment will continue to be paid till the end of the guaranteed period.
A. I, II, III B. I & II
C. II, III & IV D. II, IV
95. _______ days of grace are allowed for the payment of yearly, half-yearly, quarterly
and monthly premiums.
A. 14 B. 15
C. 30 D. 45

20. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 20
96. When a policy in force for ______ years or more, the ordinary policy becomes entitled
to a surrender value.
A. 6
B. 2
C. 3
D. 5
97. Section ______ of the Insurance Act 1996 regulates the basis of surrender values.
A. 154
B. 155
C. 145
D. 156
98. Which of the following regarding policy loans is NOT true?
I. The governing rate of interest on the loan shall be fixed by the company granting
the loan.
II. The policy loans must be repaid within 3 years after the issuance of such loan.
III. The policyholder entitles to loan anytime in their life time.
IV. The amount of loan available will be quoted on application to the government.
A. I, II & III B. II, III & IV
C. I, II & IV D. All of the above.
99. __________ policy is a policy under which, the cash value available is used as a single
premium to provide for an insurance on the original terms, but for a reduced sum
assured.
A. Extended Term
B. Paid-up
C. Reducing Term
D. Reducing Sum Assured
100. Which of the following is NOT under the non-forfeiture provision ?
A. Automatic Premium Loan
B. Paid-up Policy
C. Extended Term Assurance
D. Decreasing Term Assurance

21. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 21
101. Which of the following are the criteria of Automatic Premium Loan?
I. It provides a continuation of the insurance cover when the assured fails to pay a
premium.
II. The assured must provide evidence of insurability when bringing the policy back
to its original status.
III. Premiums shall be thus paid until the cash value has been entirely utilized.
IV. The use of Automatic Premium Loan allows continuity of supplementary benefits.
A. II, III & IV B. I, II & IV
C. I, III & IV D. All of the above
102. Which of the following regarding Paid-up policy is NOT true?
I. Once the policy is converted into Paid-up policy, no further premiums are payable.
II. All riders and supplementary benefits such as for disability and accidental death
shall remain in force.
III. Generally a participating policy will cease to participate in future benefits after
such conversion.
IV. The length of the term insurance depends on the available amount of the cash
value applied as a gross single premium at the time of conversion.
A. I & II B. II, III & IV
C. II & III D. II & IV
103. Which of the following cannot be the only basis for an insurance contract to be void?
A. no insurable interest
B. non-disclosure of material facts
C. misrepresentation of age
D. illegality of subject matter
104. Which of the following is NOT considered when applying for reinstatement?
A. Medical evidence
B. Non-forfeiture period
C. Days of grace
D. Insurable Interest
105. ____(I)_____ is the written document which embodies that agreement is in concrete
form. ___(II)____ is an intangible thing, a legally binding agreement between the
concerned parties.
A. (I) Contract ; (II) Policy B. (I) Agreement ; (II) Contract
C. (I) Policy ; (II) Contract D. (I) Contract ; (II) Clause

22. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 22
106. An ________ is one which does not leave any right with the assignor except paying of
premiums if he chooses to pay.
A. Conditional Assignment
B. Absolute Assignment
C. Transferable Assignment
D. Revocable Assignment
107. The insurer cannot deny liability on the policy after 2 years of its issue on the grounds
of misrepresentation or non-disclosure alone unless he can prove that such
misrepresentation or non-disclosure was made fraudulently by the insured.
This statement is referring to :
A. Free look provision
B. Cooling off period
C. Incontestability Period
D. Reinstatement Clause
108. The most common forms of policy alterations are :
I. Change the mode of payment
II. Decrease the sum assured
III. Change the class of policy
IV. Removal of extra premium
A. I, II & III B. II, III & IV
C, I, II & IV D. All of the above
109. Section 156 of the Insurance Act 1996 provides that where a life policy has been in
force for three (3) years or more, it shall not lapse by reason of non-payment of
premiums but shall have effect subject to such modification as to the period for which
the policy is to be in force, or of the benefit receivable under it , or both.
This statement is referring to :
A. Automatic Premium Loan
B. Incontestability Clause
C. Non-forfeiture Benefit
D. Reinstatement Condition

23. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 23
110. In calculating risks, the insurer have to consider a few factors that may affect the
policy condition which is _____________________.
I. Avocation
II. Education
III. Occupation
IV. Ethnicity
A. II, III & IV B. I, II & IV
C. I & III D. I, III & IV
111. Which of the following is false ?
A. Female’s mortality is higher than male’s mortality.
B. Lower premium for female in life policy.
C. Male’s morbidity is lower than female’s morbidity.
D. Female’s mortality is lower than male’s mortality.
112. The insurer usually employs any one of the following methods to deal with sub-
standard lives EXCEPT :
A. Decline or postpone the coverage.
B. Offer an alternate form of contract.
C. Reduce the coverage as well as the premium.
D. Charge a debt or lien.
113. Financial underwriting seeks to discover the following :
I. Insurable Interest
II. Physical Hazard
III. Financial Status
IV. Moral Hazard
A. I, II & III B. I, III & IV
C. II, III & IV D. All of the above
114. When there is an extra loading on the proposal, a letter indicating the loading is issued
to the proposer as a _____________.
A. Consideration Letter
B. Counter-offer
C. Probation Period Letter
D. Postpone Coverage

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115. When the proposal being approved without premium payment, company will issue a
letter of acceptance to the proposer required to make a payment within _______ days.
A. 15
B. 30
C. 90
D. 60
116. Commencement of the policy may be back dated to an earlier date, usually up to a
maximum of ____________.
A. 30 days
B. 60 days
C. 90 days
D.180 days
117. Which of the following statements are true?
I. Cooling off period is 14 days
II. Medical Underwriting seeks to assess the extent of physical hazard in connection
with the applicant when providing insurance coverage.
III. Bonus adjustment is one of the treatment of sub-standard lives.
IV. Rural area’s mortality rate is lower than the urban area.
A. I & II B. II & III
C. I & IV D. II & IV
118. For those in employment, taxable / assessable income constitutes such items as :-
I. leave pay
II. commissions
III. gratuity
IV. allowance
A. I, II & III B. I, III & IV
C. II, III & IV D. All of the above

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Center for Learning Excellence – AT&D Dept 25
119. The premium is allowable when life insurance or deferred annuity is __________.
I. on the individual’s life
II. on the joint lives of the individual and his/her spouse
III. on the life of the spouse of the individual
IV. on the life of the individual’s parents
A. I, II & III B. I, III & IV
C. I, II & IV D. All of the above
120. The ________________ serves as an official record of policies issued by the insurer.
A. Policy Record
B. Policy Register
C. Policy Receipt
D. Policy Letter
121. For participating policies, they are charged a slightly higher premium than their non-
participating counterparts and this additional premium is known as _______________.
A. Bonus Additional
B. Bonus Loading
C. Cash Bonus
D. Additional Premium
122. Two types of periodical premiums : -
I. Installment Premium
II. True Premium
III. Consistent Premium
IV. Level Term Premium
A. II & III B. I & II
C. I & IV D. III & IV
123. The charge for covering the cost of mortality alone is called the ________________.
A. Net Premium
B. Gross Premium
C. Risk Premium
D. Interest Premium

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124. Under this type of regular premiums, the premium payments cease on death and no
deduction is made from the claim amount.
A. True Premium
B. Installment Premium
C. Pure Premium
D. Level Term Premium
125. What is Gross Premium?
A. Net premium plus Loading for expenses plus Loading for profits & contingencies
B. Net premium minus loading for expenses plus loading for profits & contingencies
C. Net premium minus all the expenses
D. Gross premium minus all the profits & contingencies
126. Liability = The present value of the benefits payable _______ The present value of
expenses ______ The present value of the future premium receivable.
A. plus, plus
B. plus, less
C. less, plus
D. less, less
127. The assets may be valued in several ways, depending on the purpose of the valuation.
Some of the common methods of valuing assets are :-
I. Cost Price
II. Book Price
III. Market Value
IV. Cash Value
A. I, II & III B. I, II & IV
C. II, III & IV D. I, III & IV
128. _____________ is only paid on policies resulting into claims either by maturity or
death, provided the policies concerned had been kept fully inforce by payment of
premium until such date of claim.
A. Cash Bonus
B. Terminal Bonus
C. Interim Bonus
D. Guaranteed Bonus

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Center for Learning Excellence – AT&D Dept 27
129. Which among the following are NOT a form of bonus ?
A. Cash Bonus
B. Maturity Bonus
C. Guaranteed Bonus
D. Mortality Bonus
130. What is Cost Price?
A. This is the value for which the assets can be sold in the open-market.
B. This is the value placed on the assets in the company’s accounts books.
C. This is the price determine by the manufacturer.
D. This is the price at which the asset was acquired.
131. The main sources of surplus are :
I. Expenses
II. Mortality
III. New Business
IV. Interest
A. I, II & III B. I, II & IV
C. II, III & IV D. All of the above.
132. What type of value which the assets can be sold in the open market?
A. Book Value
B. Cost Value
C. Market Value
D. Open value
133. What is the purpose of a Valuation Exercise ?
I. To comply with the statutory requirement.
II. To test the adequacy of the previous premium scale.
III. To test whether the company is solvent.
IV. To determine if any changes in the company’s operation are necessary.
A. I, II & III B. II, III & IV
C. I, III & IV D. All of the above.

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Center for Learning Excellence – AT&D Dept 28
134. Under this method, the bonus allotted is in proportion to the sum assured and the
bonuses accumulated under the policy.
A. Simple Reversionary Bonus
B. Compound Reversionary Bonus
C. Interim Bonus
D. Maturity Bonus
135. The portion of the surplus that may be passed to the shareholders in the form of
individuals is normally stated in the company’s memorandum of Articles of
Association or by registration and is in the region of ___________ of the divisible
surplus.
A. 10% - 20%
B. 10% - 30 %
C. 10% - 25%
D. 15% - 25%
136. What type of form need applicant to fill-up major portion of the information relating
to applicant himself ?
A. Proposal Form
B. Medical Form
C. Declaration Form
D. Payment Form
137. “This section includes a declaration that answers given in the proposal and medical
report forms shall form the basis of the contract”
A. The Preamble
B. The Proviso
C. The Operative Clause
D. The Schedule
138. The proposal form completed by the applicant contains as below, EXCEPT :
A. Personal particulars
B. Details of liabilities
C. Details of insurance
D. Personal and family history

29. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 29
139. Generally, information necessary for the proper assessment of risk obtained from
different sources as below, EXCEPT :
A. Pay Slip
B. Physician’s Statement
C. Medical Report
D. Proposal Form
140. Besides recording the applicant’s answer concerning medical history, the reports of
examining doctor include :
I. Height and weight
II. Pulse and blood-pressure readings
III. Chest and abdomen measurements
IV. Condition of heart, lungs, nervous system
A. I & II B. I, II & III
C. II, III & IV D. All of the above
141. Two main forms of policy are in use the ___________ type and the _________ type.
I. Narrative
II. Schedule
III. Preamble
IV. Condition
A. I & II B. II & III
C. III & IV D. I & IV
142. Which report furnishes the agent’s impression about the applicant’s habits,
appearance, character and financial status?
A. Previous Report
B. Physician’s Report
C. Agent’s Report
D. Company’s Report
143. Which form of policy is very simple, readily understood and elastic in adaptability?
A. Schedule Type
B. Narrative Type
C. Preamble Type
D. Condition Type

30. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 30
144. This section contains the applicant’s declaration, to the best of his knowledge, true and
complete and permission authorizing the insurer to seek information from any doctor
who has ever attended to him and any life office. Which section is these?
A. Personal and family history
B. Declaration and authorization
C. Details of insurance
D. Personal particulars
145. The standard policy documents are often endorsed to take into account the differing
aspects of individual circumstances and needs. Endorsements can be done at the :
I. Time of issue of policy
II. After issue of policy
III. Before issue of policy
IV. During the issue of policy
A. I & II B. I & III
C. II & III D. I, II & III
146. The main sections found in the policy are, EXCEPT :
I. The Operative Clause
II. Condition
III. Endorsement
IV. The Preamble
A. I, II & IV B. I, II, III
C. I, III & IV D. All of the above
147. Which of the following statement is NOT true ?
A. The life insurance contract terminates when a claim is settled.
B. The insured may make a claim upon the maturity of the insurance policy.
C. The reputation of an insurer lies in the sum of claims to be settled.
D. Non of the above.
148. Under which circumstances, a claim may arise?
A. When the insured make a will
B. When the insured died
C. When the insured make a policy loan
D. When the insured stop premium payment

31. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 31
149. When a death claim is made, the insurer need to obtain the following documentary
evidence from the claimant :
I. Proof of Survival
II. Proof of Death
III. Proof of Age
IV. Proof of Title and Ownership
A. II, III & IV B. I, II & IV
C. I, III & IV D. All of the above.
150. The following documents are proof of title and ownership of an insurance policy,
EXCEPT :
A. A deed of assignment
B. A probate of the will from a court of law
C. A note from the insured’s family
D. A letter of administration issued by a court of law
151. For maturity claim, the policyholder needs to complete 3 forms which are :
I. Identity Form
II. Discharge Form
III. Survival Form
IV. Maturity Form
A. II, III & IV B. I, II & IV
C. I, II & III D. I, III & IV
152. Which of the following is NOT relevant to the common settlement option for an
endowment plan?
A. Convert the maturity proceeds into annuity
B. Continue deposit the maturity proceed with the insurer
C. Withdraw 90% of the proceed without the letter of probate
D. Withdraw the proceed by installments
153. Doctrine of __________ is important to claims for personal accident policies, as more
than one condition can operate leading to a claim.
A. Contribution
B. Proximate Cause
C. Subrogation Right
D. Indemnity

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Center for Learning Excellence – AT&D Dept 32
154. En. Ahmad was born in May 2, 1970. He submitted his proposal on October 3, 1996,
if the insurer used age last birthday as basis, what is En. Ahmad’s age in his proposal ?
A. 26
B. 27
C. 28
D. 29
155. What is En. Ahmad’s age if he submitted his proposal on Feb 3, 1998 and the insurer
used age next birthday as basis ?
A. 26
B. 27
C. 28
D. 29
156. What is En. Ahmad’s age if he submitted his proposal on Dec 3, 1996 and the insurer
used age nearest birthday as basis ?
A. 26
B. 27
C. 28
D. 29
157. Interest charge will occur when the policy holder _____________________.
A. Reinstate a lapsed policy
B. Repay the outstanding premium
C. Repay a policy loan
D. All of the above
158. Policies which accumulate _________ often carry the right to a policy loan.
A. Bonus
B. Cash values
C. Premium
D. Surrender Value

33. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 33
Please refer to Table I & II for question 159 – 162.
Table I : Premium Rate for 25- year endowment insurance on male lives treat the female lives
as 3 years younger.
Age (Next Birthday) Premium per RM1000 sum assured
25 39.50
26 40.00
27 40.50
28 41.25
29 42.00
30 42.80
31 43.60
Table II : Discounts for large sum assured
Sum Assured (RM) Discount Per RM 1000 Sum Assure (RM)
10,000 – 24,999 1.00
25,000 – 39,999 2.00
40,000 – 54,999 3.00
55,000 – 69,999 4.00
Above 70,000 Special Quotation
159. Calculate the premium for the following applicant,
Applicant : Darren
Sex : Male
Age : 26
Sum Assured : RM 10,000
A. RM 390
B. RM 395
C. RM 400
D. RM 405
160. Calculate the premium for the following applicant,
Applicant : Simon
Sex : Male
Age : 30
Sum Assured : RM 45,000
A. RM 1755
B. RM 1791
C. RM 1890
D. RM 1926

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Center for Learning Excellence – AT&D Dept 34
161. Calculate the premium for the following applicant and determination of age is next
birthday.
Applicant : Chris Tan
Sex : Male
Date of Birth : July 25, 1970
Cover to commence : January 26, 1998
Sum Assured : RM 50,000
A. RM 1875.00
B. RM 1912.50
C. RM 2025.00
D. RM 2062.50
162. Calculate the premium for the following applicant, determination of age is next
birthday.
Applicant : Angeline
Sex : Female
Date of Birth : December 25, 1970
Cover to commence : January 26, 1998
Sum Assured : RM 30,000
A. RM 1125.00
B. RM 1185.00
C. RM 1177.50
D. RM 1237.50
163. Guidelines on Code of Conduct, which are abided by all employees of insurers
operating in Malaysia at all times, are formulated by _______________
A. Life Insurance Association of Malaysia (LIAM)
B. The Actuarial Society of Malaysia (ASM)
C. The Malaysian Insurance Institute (MII)
D. Persatuan Insurance Am Malaysia (PIAM)
164. Who is the supervisory authority for insurance company?
A. Board of Director of Insurance Company
B. Bank Negara
C. Audit/Disciplinary Committee
D. LIAM

35. PCE PART (A&C)
Center for Learning Excellence – AT&D Dept 35
165. The Audit/Disciplinary Committee of the insurer is responsible for _______________.
A. monitoring compliance of the life insurance insurer
B. monitoring compliance of the intermediaries
C. monitoring compliance of the life insurance insured
D. monitoring compliance of the life insurance associations
166. The term life insurance used in Code of Ethics and Conduct covers :
I. Home Service
II. Ordinary Life Insurance
III. Pensions Contract
IV. Permanent Disability Insurance
A. I, III & IV B. II, III & IV
C. I, II & III D. All of the above
167. The life insurance’s Code of Conduct applies to all the following persons, EXCEPT :
I. Life insurer’s employee
II. Insurance agents
III. Registered Insurance Brokers
IV. Registered Insurance Consultants
A. I & II B. II & III
C. II & IV D. III & IV