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NEW QUESTION 38
An intermediary needs to place a large properly risk, however the insurance company can only write 25% of the risk. What type of insurance arrangement would the intermediary require to complete the risk?
- A. Dual insurance.
- B. Reinsurance.
- C. Self-insurance.
- D. Coinsurance.
Answer: D
NEW QUESTION 39
Sunita suffers a loss and makes a claim under her household contents insurance policy. When must insurable interest exist for her claim to be valid?
- A. At policy inception and at the time of the loss.
- B. At the time of the loss only.
- C. At the time of the proposal.
- D. At policy inception only.
Answer: A
NEW QUESTION 40
Joe is a broker who has become a Fellow of the Chattered Insurance Institute. If he would like to use the title Chartered Insurance Broker, what must he do. if anything?
- A. He cannot use the name as he would be in breach of the Insurance: Conduct of Business sourcebook (ICOBS).
- B. He must apply to the Chartered Insurance Institute.
- C. He must apply to the Prudential Regulation Authority.
- D. He must apply to the British Insurance Brokers' Association.
Answer: B
NEW QUESTION 41
How is Insurance Premium Tax collected within the UK?
- A. By HM Revenue & Customs on individual insurance contracts.
- B. By HM Revenue & Customs on the whole general account.
- C. By the insurer on the whole general and life accounts.
- D. By the insurer on individual insurance contracts.
Answer: C
NEW QUESTION 42
Sara searches on a comparison website for car insurance. She selects the cheapest quotation and pays by credit card for immediate cover. This is known as
- A. an offer.
- B. unconditional acceptance.
- C. a Terms of Business Agreement.
- D. conditional acceptance.
Answer: B
NEW QUESTION 43
If an insured signs an agreement with a hold harmless clause, this may prevent the insurer from
- A. disclosing details to a third party.
- B. pursuing subrogation rights.
- C. reinsuring the risk.
- D. increasing the premium.
Answer: B
NEW QUESTION 44
Insurers and intermediaries are required to adhere to solvency requirements as stipulated by the
- A. Financial Services Compensation Scheme.
- B. European Union.
- C. Financial Ombudsman Service.
- D. Association of British Insurers.
Answer: B
NEW QUESTION 45
In a chain of events, the proximate cause of a loss is always the
- A. dominant event leading to the loss.
- B. only event contributing towards the loss.
- C. last event before the loss occurs.
- D. only event which is not excluded by the terms of the policy.
Answer: A
NEW QUESTION 46
From April 2019. a small company with nine employees is in dispute with its insurer and wishes to refer the matter to the Financial Ombudsman Service (FOS). The FOS is only permitted lo deal with the dispute if the insured's turnover does NOT exceed
- A. £6,500,000
- B. £3,500,000
- C. £1,000,000
- D. £6,000,000
Answer: C
NEW QUESTION 47
For which professional is professional indemnity insurance compulsory by statute?
- A. A loss adjuster,
- B. A loss assessor.
- C. A chartered surveyor. .
- D. A solicitor.
Answer: D
NEW QUESTION 48
The Financial Ombudsman Service will make a ruling on a dispute between
- A. an insurer and a reinsurer.
- B. an insurance broker and an insurer.
- C. a private individual and an insurer.
- D. a third party and the insurer against whom he is making a liability claim.
Answer: C
NEW QUESTION 49
Bye-laws are passed at the Lloyd's Market by the
- A. Corporation of Lloyd's.
- B. Lloyd's Market Association.
- C. Lloyds Managing Agent.
- D. Council of Lloyd's.
Answer: D
NEW QUESTION 50
John has a whole of life policy and has recently been diagnosed with cancer. When, if at all. must he disclose this to his insurer?
- A. Immediately, irrespective of prognosis.
- B. Immediately, but only if the diagnosis is terminal.
- C. At the date of the next premium payment.
- D. He does not need to disclose this.
Answer: D
NEW QUESTION 51
Barbara owns a factory employing 20 people. What insurance is she required to hold by law?
- A. Products liability insurance.
- B. Public liability insurance.
- C. Professional indemnity insurance.
- D. Employers' liability insurance.
Answer: D
NEW QUESTION 52
Under the Insurance: Conduct of Business sourcebook (ICOBS) on product disclosure, what information about the claims-handling process must an intermediary provide to a consumer?
- A. The number of days the settlement should take.
- B. The contact details of the insurer.
- C. The policy number only.
- D. The contact details of the loss adjuster used by the insurer.
Answer: D
NEW QUESTION 53
Under common law. when does the insured's duly of fair presentation cease with regard to declarations that do NOT affect policy cover?
- A. When the policy contract lakes effect.
- B. When a claim is paid.
- C. At renewal.
- D. When a claim is submitted.
Answer: C
NEW QUESTION 54
What is the current rate of Insurance Premium Tax for a motor insurance policy?
- A. 20%
- B. 12%
- C. 9.5%
- D. 10%
Answer: B
NEW QUESTION 55
How would an employee benefit directly from her employer's business interruption insurance if its factory was forced to close temporarily due to flood damage?
- A. By payment of a redundancy lump sum.
- B. By payment of an early retirement pension.
- C. By continuation of her wages.
- D. By compensation for loss of bonus.
Answer: C
NEW QUESTION 56
If an insurer invokes the cancellation clause to cancel a policy mid-year due to a change in the risk, how much of the premium, if anything, is normally returned to the policyholder?
- A. The full year's premium less a fixed nominal charge.
- B. The full year's premium.
- C. A pro rata amount.
- D. None of the premium.
Answer: A
NEW QUESTION 57
John and his wife arrange a household contents insurance policy in joint names with insurer A for a sum insured of £10,000. His wife arranges a second policy on the same basis with insurer B for a sum insured of
£20,000. Both policies have identical terms and conditions. What is insurer A's liability if a valid claim of
£3,000 is subsequently made?
- A. £2,000
- B. £3,000
- C. £1,000
- D. £1,500
Answer: C
NEW QUESTION 58
If a firm is said to be risk averse, this means that it
- A. carries its own risk wherever possible.
- B. undertakes its own risk management research.
- C. tenders its insurance needs to the market.
- D. arranges insurance protection wherever possible.
Answer: A
NEW QUESTION 59
If the amount to be paid in the event of a total loss of insured property is agreed between the proposer and the insurer at inception of the policy, this is a modification of the principle of
- A. good faith.
- B. subrogation.
- C. indemnity.
- D. contribution.
Answer: C
NEW QUESTION 60
A risk that is always insurable is a
- A. speculative risk.
- B. pure risk.
- C. capital risk.
- D. fundamental risk.
Answer: B
NEW QUESTION 61
Which principle of insurance prevents a member of the public from taking out an insurance policy on the life of a celebrity in the hope of receiving a windfall on the celebrity's death?
- A. Good faith.
- B. Insurable interest.
- C. Proximate cause.
- D. Indemnity.
Answer: B
NEW QUESTION 62
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