Overview
- The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.
- Assignments submitted through email will not be accepted.
- Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.
- Students must mention question number clearly in their answer.
- Late submission will NOT be accepted.
- Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.
- All answers must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism.
- Submissions without this cover page will NOT be accepted.
Assignment Questions: (Marks 15)
Q1. What do you mean by Guaranty Fund and Other Assessments in the insurance industry? Describe with suitable examples the three primary methods used to assess guaranty funds assessments for property and liability insurance firms.
Note: Your answer must include suitable examples for each method. (5 Marks) (Week 10, Chapter 8)
Answer:
Q2. Part a) What are the various transactions involved in Takaful Operations? (2 Marks)
Part b) The following financial transactions are related to a General Takaful Product: (3 Marks)
i. An amount of SAR 15,500 received as advanced contribution from new participants.
ii. An amount of SAR 11,250 received as a contribution from new participants.
iii. Contribution renewal received from participants SAR 13,750.
You are required to prepare the necessary journal entries. (Week 11, Chapter 3)
Answer:
Q3. AT&T Company has the following financial data: (5 marks) (Week 12, Chapter 4)
Particulars | Amounts (SAR) |
Total Profit for the Year | 86,625 |
General Takaful Assets (Year 2019) | 238,500 |
General Takaful Assets (Year 2020) | 257,625 |
Cash | 31,725 |
Short-term Investment | 33,525 |
Short term liabilities | 42,750 |
Underwriting Surplus Distributable to Participants/Participants' Share of Profit | 51,825 |
Gross Contribution | 173,700 |
Net Contribution | 129,375 |
Wakalah Fee | 41,625 |
Commission Paid | 34,245 |
Management Expense | 38,700 |
Net Claim Incurred | 73,125 |
Earned Contribution | 124,875 |
Calculate:
- Return on Assets
- Quick Liquidity
- Surplus Distribution Ratio
- Expense Ratio
- Claims Ratio
Answer: