CDCS EXAM 2019 (April Intake) PREPARATION PROGRAM

Weekly Progress & Evaluation Test 26

01. An insurance document is issued with a franchise of 5% applicable on any claims.
Which of the following statements are correct?
1. Claims attract ‘stamp duties’ or taxes of 5% of the amount of the claim.
2. If the loss payable is less than 5% of the insured value, the insurer is not liable.
3. If the loss payable is more than 5% of the insured value, the insurer is liable in full.
4. The first 5% of any claim is payable by the insured party.
Select one:
A. 2 & 4 only B. 3 & 4 only.
C. 1 & 3 only. D. 2 & 3 only.
02. Credit requires presentation of a declaration under open cove. The requirement can be
satisfied by presentation of-
a.i.1.a.i. Insurance certificate
a.i.1.a.i. Insurance deceleration under an open cover
a.i.1.a.ii. Insurance policy
IV. Insurance cover note
A. All of the above B. Only II
C. Both II & III D. I, II & III
03. An insurance amount shows insured amount is GBP 100,000. The document indicates
that covering is subject to an excess of 10%. If the loss amount is GBP15,000.00 then the
amount born by the insurer is:
A. GBP15,000 B. GBP 5000
C. GBP13,500 D. No loss is born by the insurer.
04. An insurance document shows insured amount as USD10,000.00. The documents
indicate that coverage is subject to a franchise of 10%. If the actual loss amount is
USD1,500.00, the amount borne by the insurer is:
A. USD1,500.00 B. USD1,000.00
C. USD500.00 D. No loss is borne by the insurer.
05. An insurance document shows insured amount as USD10,000.00. The documents
indicate that coverage is subject to a franchise of 10%. If the actual loss amount is
USD1,000.00, the amount borne by the insurer is:
A. USD1,500.00 B. USD1,000.00
C. USD500.00 D. No loss is borne by the insurer.
06. Which of the following parties may issue an insurance document?
I. An insurance company
II. An Underwriter
III. An agent or proxy of the insurance company or underwriter
IV. An insurance broker
A. (I) only B. Both (I) and (II)
C. (I), (II) and (III) D. All of the above parties
07. A credit for USD10,000.00 requires- ‘Insurance document covering ICC(A)’. The
invoice value shows Gross Value USD10,000.00 Less, Pre-paid amount USD2,000.00, Net
claim amount USD 8,000.00. There was no indication regarding CIF or CIP value of the
goods in the documents. Which of the following insurance documents will be complying?
A. An insurance policy for USD11,000.00 having a ‘all risk’ notation
B. A declaration under open cover for USD12,000.00 covering ICC (A)
C. An insurance policy for USD 8,800.00 covering ICC (A)
D. A cover note for USD20,000.00 covering ICC (A)

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 CDCS EXAM 2019 (April Intake) PREPARATION PROGRAM
Weekly Progress & Evaluation Test 26

08. All of the followings are acceptable as an insurance document EXCEPT?

A. Insurance Certificate B. Declaration under an open cover
C. Insurance Policy D. Insurance Cover Note
09. Extract from a commercial invoice:
100 TV of NOKIA brand $10,000.00
Less 25% advance payment $2,500.00
Total invoice value $7,500.00
If an insurance certificate is requires which of the following presentation is acceptable:
A. Insurance certificate for $11,000.00 covering shipment of 100 TV with remote controller.
B. Insurance certificate for $ 8,250.00 covering shipment of 100 TV.
C. An insurance policy for $ 11,000.00 covering shipment of 100 TV.
D. Insurance certificate for $ 8,250.00 covering shipment of 100 TV with remote controller.

10. Extract from a credit

Credit value $10,000.00
Insurance coverage ask for $8,000.00
What is the minimum coverage-------------
A. $11,000 B. $ 8,000.00
C. $ 8,800 D. None of the above
11. An Insurance broker may sign an insurance document________:
I. As an Underwriter
II. As an agent of the insurance company or underwriter
III. As a proxy of the insurance company or underwriter
IV. At its own capacity
A. All of the above B. (II) only
C. Both (II) and (III) D. (II), (III) and (IV)
12. ICC ‘A’ covers which of the following credit requiring risks:
A. All risk
B. TPND
C. Both of the above
D. None of the above
13. A credit requires presentation of an ‘Insurance Policy’. The requirement can be
satisfied by presentation of a:
I. Declaration under an open cover
II. Insurance Policy
III. Insurance Certificate
IV. Insurance Cover Note
A. All of the above; B. (II) only
C. Both (II) and (III) D. (I), (II) and (III)
14. Credit requires an insurance certificate for $30,000 with coverage of pilferage, short
delivery and war risk. Which statement is incorrect?
A. Present insurance certificate for $10,000.00 with risk cover pilferage from
‘Insurance Co. A’ and another insurance certificate for $ 20,000.00 with risk cover
short delivery and war risk from ‘Insurance Co. B’.
B. Present insurance certificate for $10,000.00 with risk cover pilferage, short delivery
and war risk from ‘Insurance Co. A’ and another insurance certificates for $20,000.00
with risk cover pilferage, short delivery and war risk from ‘Insurance Co. B’.
C. Present Insurance policy with ICC (A) for $33,000 excluding war risk.
D. Present Insurance policy with ICC (A) for $33,000.00

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 CDCS EXAM 2019 (April Intake) PREPARATION PROGRAM
Weekly Progress & Evaluation Test 26
15. A credit requires presentation of an ‘Insurance Policy’ covering all risks. The
requirement can be satisfied by presentation of an Insurance policy:
I. Containing a notation of ‘All risks’
II. Stating it covers Institute Cargo Clauses (A)
III. Stating it covers Institute Cargo Clauses (B)
IV. Stating it covers Institute Cargo Clauses (C)
A. All of the above B. (I) only
C. Both (I) and (II) D. (I), (II) and (III)
16. An applicant requires shipment to be effected by air. He also requires presentation of
an ‘Insurance Policy’ covering all risks. The issuing bank should ask for an insurance policy
covering:
A. Institute Cargo Clauses (A) B. Institute Cargo Clauses (B)
C. Institute Cargo Clauses (C) D. Institute Cargo Clauses (Air)
17. An insurance document shows insured amount as USD10,000.00. The documents
indicate that coverage is subject to an excess of 10%. If the actual loss amount is
USD1,500.00, the amount borne by the insurer is:
A. USD1,500.00 B. USD1,000.00
C. USD 500.00 D. No loss is borne by the insurer.
18. An insurance document shows insured amount as USD10,000.00. The documents
indicate that coverage is subject to an excess of 10%. If the actual loss amount is
USD1,000.00, the amount borne by the insurer is:
A. USD1,500.00 B. USD1,000.00
C. USD500.00 D. No loss is borne by the insurer.
19. A transferable letter of credit is issued in favor of ‘Company A’. The value of the credit
is USD 85,000.00, covers shipment of toys and states the Incoterms as CIF. The
documentary requirements include ‘Insurance certificate covering all risks’, without any
further qualification within the credit. ‘Company A’ requests that the credit be transferred
to its sole supplier, ‘Company B’, to the value of USD 60,000.00
How should the insurance requirements be best expressed in the transferred credit?
A. Insurance certificate for a minimum of 110% of the CIF invoice value of the goods
covering all risks.
B. Insurance certificate for a minimum of 142% of the CIF invoice value of the goods
covering all risks.
C. Insurance certificate for a minimum of 156% of the CIF invoice value of the goods
covering all risks.
D. Insurance certificate covering all risks.

20. A documentary credit for USD 150,000.00 calls for a full set of bills of lading and an
insurance certificate to cover all risks. The bill of lading presented indicates an on board
date of 15 December. Which of the following insurance documents are acceptable?
A. Policy for USD 185,000.00 with ICC A coverage having 20% Excess dated 15 Dec.
B. Certificate with ICC A coverage for USD 200,000.00 dated 17 December.
C. Declaration signed by a Underwriter with ‘ICC A’ coverage for USD 200,000.00
dated 15 December.
D. Certificate but Subject to a franchise for USD 170,00.00 having all risk notation
dated 20 December coverage started from 14 December .
A. 1 and 2 only B. 1 and 4 only
C. 2 and 3 only D. 3 and 4 only

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