FINANCIAL MANAGEMENT

YOUR COMPLETED WORK MUST BE SUBMITTED WITHIN THE SPECIFIED DURATION OUTLINED ABOVE TO PREVENT PENALTIES

SECTION A

Instruction: Complete ALL questions from this section.

CASE STUDY

Mr. Shawn Manson is a salesman of Grace Kennedy Products Limited who on his journey on January 12th, 2021 to a potential retailer got into a head-on collision with Ms. Janice Musgrave. Both vehicles were totalled. Mr. Manson filed a report with his supervisor a day after detailing the incident, which is mandatory as he receives a monthly travel allowance for the use of his vehicle to conduct the affairs of the company. He is also expected to do a quarterly service of the vehicle. The last service date before the incident was October 29th, 2020. Ms. Musgrave’s insurance company Sagicor has filed a claim against Mr. Manson’s insurance company Guardian Life. Sagicor also has intentions of going against Grace Kennedy Products Limited: Ms. Musgrave sustained a severe back injury and as a result, has had to go to weekly therapy sessions since the incident. The claim report from Sagicor to Guardian Life has put the blame on Mr. Manson. They have alleged that Mr. Manson’s car skidded as a result of smooth and wet roads. An investigation is ongoing by Guardian Life to determine the legitimacy of the allegation.

Required

A. Discuss the type of Liability Exposure prevalent in the case. (6 marks)

B. What implication is being made about Mr. Manson in the third paragraph? How can it

affect his employer? (4 marks)

C. Identify ONE (1) direct loss and ONE (1) indirect loss from the incident. (4 marks)

D. Discuss TWO (2) types of Liability Damages that have occurred in this case. (6 marks)

(Total 20 marks)

END OF SECTION A

SECTION B

Instruction: Complete ALL questions from this section.

Question 1

A cargo ship operated by A.P. Moller-Maersk A/S lost several hundred containers in the Pacific Ocean while sailing through heavy seas from China to Los Angeles earlier this year. Rough seas during the trip caused the loss. The company said the Maersk Essen, which has capacity for more than 13,000 containers, lost an estimated 750 of them about halfway through its trans-Pacific sailing from China’s Port of Xiamen. The World Shipping Council, a Washington-based trade body representing liner companies, said in a report last July that between 2008 and 2019 on average 1,382 containers were lost at sea each year.

A. If the proximate cause of loss is a known peril can negligent claims be made against the

ship’s operator? Discuss the extent of the ship operator’s responsibility. (10 marks)

B. What recourse does a shipper have as it relates to guarding against losses from such occurrences? (4 marks)

C. In most, if not all countries, auto liability insurance is a legal requirement. Self-insurance, however, is not usually an option as insufficient exposure exists even though some individuals own more than two or three automobiles.

Explain FOUR (4) elements of the Personal Automobile Policy (PAP). (6 marks)

(Total 20 marks)

Question 2

A. Explain THREE (3) ways in which a firm can practice funded retention. (9 marks)

B. Outline the various alternatives available to fund workers’ compensation losses. (5 marks)

C. Discuss TWO (2) potential problems a firm may face if self-insurance is chosen to fund

workers’ compensation losses. (6 marks)

(Total 20 marks)

Question 3

A. Discuss why an agent from a Life Insurance Company will have a one-on-one relationship with the Human Resource Manager for a firm. (8 marks)

B. A new intern has been assigned to your Tatil Motor Insurance branch and as the supervisor, you are tasked with training. In no more than THREE (3) paragraphs, explain to the new intern the underwriting function of insurance. (6 marks)

C. Discuss why insurance is usually heavily regulated. (6 marks)

(Total 20 marks)

END OF ASSESSMENT

21/05 The Council of Community Colleges of Jamaica Page 1

21/05 The Council of Community Colleges of Jamaica Page 1

21/05 The Council of Community Colleges of Jamaica Page 4