CH-2 Flashcards by Mark Hawkins

What is an insurance policy?

a) The contract between the Insured and the Broker
b) The contract between the Insured and the Loss Adjuster
c) The contract between the Insured and the Insurance Company
d) The contract between the assured and the Insurance Company

c) The contract between the Insured and the Insurance Company

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The term Operative means?

a) In operation
b) Working
c) Active
d) Commenced

b) Working

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Which ONE of the following MUST be completed for a policy to exist at the time of a claim being made?

a) A deposit is paid
b) A contribution is paid
c) The excess is collected
d) A premium is paid

d) A premium is paid

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The operative clause generally starts with which phrase?

a) The Broker agrees
b) The Policyholder agrees
c) The Insurer agrees
d) The Underwriter agrees

c) The Insurer agrees

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Which of the following would NOT be requested if an item was lost or damaged?

a) Independent contractor report
b) A written, signed statement from a third-party confirming ownership
c) Crime reference number
d) Photographs of the item

b) A written, signed statement from a third-party confirming ownership

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Which of the following is NOT a policy definition?

a) Meaning of Words
b) Personal Possessions
c) Business Equipment
d) We, Us, Our, the Company

a) Meaning of Words

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Where a particular aspect is NOT defined by the policy, the FOS confirms what?

a) Contra Proferentem is implemented
b) The everyday meaning of the words is accepted
c) A decision will be made by an independent adjudicator
d) A similar policy will be sought for definition

b) The everyday meaning of the words is accepted

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What is a material fact?

a) A change that must be notified to the Insurers
b) Any factor that may affect the level of risk and must be disclosed
c) A fact that could prejudice the Insurer
d) An important detail concerning the structure of the insurable interest

a) A change that must be notified to the Insurers

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If a Policyholder is required to mitigate their loss, what should they do?

a) Make a full repair and invoice the insurer
b) Vacate the property in the interests of safety
c) Take steps to avoid further damage
d) Refer to policy wording for a specific meaning

c) Take steps to avoid further damage

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Which of the following is NOT a general exclusion?

a) Terrorism
b) Riot
c) Republic of Ireland
d) War Risks

c) Republic of Ireland

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A Policyholder has tickets for a theatre event on Friday night. On Friday morning, a fire occurs at the Policyholder’s home address and because of this; they’re forced to pull out of attending the event and will lose the money paid for the tickets. Who will cover the cost of these tickets?

a) The home insurer
b) The theatre company will refund 50% along with the Insurer due to circumstances
c) The tickets will not be covered by the Insurer
d) The Insurer goes above and beyond and places the Policyholder in a hotel a week later with complimentary tickets to an alternative show

c) The tickets will not be covered by the Insurer

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Which of the following is NOT an example of a Policy Condition?

a) Reasonable Care
b) Subrogation
c) Litigation
d) Arbitration

c) Litigation

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Which of the following does the FOS primarily consider to determine whether or not a Policyholder has taken Reasonable Care?

a) Is the Policyholder negligent
b) Is the Policyholder at fault
c) Has the Policyholder committed a civil wrong
d) Has the Policyholder been reckless

d) Has the Policyholder been reckless

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Which is the following is NOT true?

a) Warranties go to the root of a contract
b) Warranties are a reservation of rights
c) Warranties are conditions that are ongoing
d) Breach of warranty may make the policy voidable at the injured party’s option

b) Warranties are a reservation of rights

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Which of the following is the primary reason that Insurer’s use Warranties?

a) For increased premium
b) To control and reduce risk
c) To reduce claims
d) To increase turnover

b) To control and reduce risk

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Who requires that the retail Policyholder is treated fairly?

a) FCA
b) FOS
c) BIBA
d) FSA

a) FCA

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Which of the following is NOT an insured peril?

a) Fire
b) Accidental Damage to Underground Services
c) Escape of vermin
d) Flood

c) Escape of vermin

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Which of the following is NOT part of the legal definition of fire?

a) Actual ignition
b} Something on fire which should not have been on fire
c) No connection between the Insured and the fire
d) Actual trigger

d) Actual trigger

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Harris v Poland (1941} relates to what circumstances?

a) Jewellery was accidentally placed on a stove in 1938. There was a minor spill of oil, which immersed the jewellery, prompting the catching of fire
b) Jewellery was placed under a fire grate and forgotten about and a fire subsequently started
c) The material of Ronald Harris jewellery item caught fire when a lounge fire was stoked by Edward Poland, causing third degree burns to his left arm and part of his chest
d) Zinc metal Ronald Harris jewellery encased in resin was exposed to extreme sunlight and remarkably caught fire whilst Edward Poland sat in his rear garden in August, 1938

b) Jewellery was placed under a fire grate and forgotten about and a fire subsequently started

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Explosion was defined in Commonwealth Smelting Ltd v Guardian Royal Exchange Assurance (1984) as?

a) Violent, noisy and caused by rapid chemical or nuclear reaction or the bursting out of gas or vapour under pressure
b) Manifest violence and a shattering destruction
c) The compromise of the molecular integrity of chemicals that would result in violent and noisy reaction
d} Violent combustion of chemicals

a) Violent, noisy and caused by rapid chemical or nuclear reaction or the bursting out of gas or vapour under pressure

According to Oddy v Phoenix (1966) what is the definition of Storm?

a) Storm means storm to me and connotes some sort of violent wind usually accompanied by rain or hail or snow
b) A storm must be something more prolonged and widespread than a gust of wind
c) A storm must be something greater and widespread than a gust of wind
d) Storm means storm and to me connotes some sort of violent wind usually accompanied by rain or hail or snow

d) Storm means storm and to me connotes some sort of violent wind usually accompanied by rain or hail or snow

Very subtle change of the position of the word ‘and’ at the beginning of the sentence.

Which TWO of the following make up the FOS ‘two-tier’ test to establish storm?

a) ‘But for’ test to determine the proximate cause
b) ‘Negligence’ test to determine if the Policyholder is at fault
c) ‘Gradually Operating Cause’ test to see if existing building material should have withstood the storm
d) ‘Common sense’ test to review the evidence

a) ‘But for’ test to determine the proximate cause

d) ‘Common sense’ test to review the evidence

Which of the following is NOT an element of the Public Order Act 1986?

a) Where twelve or more persons who are present together use or threaten unlawful violence for a common purpose and the conduct of them (taken together) is such as would cause a person of reasonable firmness present at the scene to fear for his personal safety, each of the persons using unlawful violence for the common purpose is guilty of riot
b) The common purpose may be inferred by natural conduct
c) Riot may be committed in private as well as in public places
d) It is immaterial whether or not the twelve or more use or threaten unlawful violence simultaneously

b) The common purpose may be inferred by natural conduct

insertion of the word natural

This Act provides that where certain property is damaged, destroyed or stolen by any persons “riotously and tumultuously assembled together” compensation is payable by the Police Authority. Which Act does this refer to?

a) The Riot Damages Act 1896
b) The Riot Compensation Act 2016
c) The Riot Damages Act 1986
d) The Riot Damages & Compensation 2006

b) The Riot Compensation Act 2016

Riot damage claims must be made to the police within how many days? a) 42 b) 30 c) 7 d) 14

a) 42

How does the Theft Act 1968 define Theft? a) A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it; and "thief" and "steal" shall be construed accordingly b) A person is guilty of theft if he knowingly and willfully appropriates property belonging to another with the intention of permanently depriving the other of it; and "thief" and "steal" shall be construed accordingly c) A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it; and "thief" and "taken" shall be construed accordingly d) A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of depriving the other of it; and "theft" and "steal" shall be construed accordingly

a) A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it; and "thief" and "steal" shall be construed accordingly

In R v Ghosh (1982) the test of which TWO of the following is the correct investigation of dishonest appropriation? a) Whether the person acted dishonestly by the standard of ordinary and honest people b) Whether he himself must have realised that what he was doing was by those standards dishonest c) Whether the person acted dishonestly by the standard of regular, honest people d) If he so acted, whether he himself must have realised that what he was doing was by those standards dishonest

a) Whether the person acted dishonestly by the standard of ordinary and honest people d) If he so acted, whether he himself must have realised that what he was doing was by those standards dishonest

How is Accidental Damage defined in the dictionary? a) Something that happens that cannot be foreseen and cannot be controlled b) Something that happens which is unforeseen or unexpected, a chance mishap, not an inevitable happening and not deliberate c) Something that cannot be foreseen, is not deliberate and cannot be controlled or mitigated d) A chance mishap that cannot be foreseen or expected, is not deliberate and cannot be mitigated

b) Something that happens which is unforeseen or unexpected, a chance mishap, not an inevitable happening and not deliberate

Which of the following is NOT an essential element of claims validation? a) Validation of the cause of the loss or damage b) Validation that the item claimed for existed c) Validation of the original monetary value of the damaged or missing item d) Validation that the item said to be lost or damaged is actually lost or damaged

c) Validation of the original monetary value of the damaged or missing item

Where does Claims Validation start? a) With the Handler b) With the Adjuster c) With the Insurer d) With the Policyholder

d) With the Policyholder

Which of the following is NOT a parameter of an acceptable outcome? a) Best possible outcome b) Acceptable outcome c) Average outcome d) Unacceptable outcome

c) Average outcome

Which of the following is the primary objective in a negotiation? a) Obtaining the most profitable agreement possible b) Obtaining the most accurate agreement possible c) Obtaining the most successful agreement possible d) Obtaining the most equitable agreement possible

d) Obtaining the most equitable agreement possible

Which of the following is incorrect in relation to a negotiation? a) Disagree the disagreeable b) Identify who you are best able to negotiate with c) Remember the importance of listening d) Ensure that you set expectations as soon as possible

a) Disagree the disagreeable

When evaluating whether the Policyholder exercised reasonable care, which two questions arise? a) Who is the judge of the level of reasonable care? b) What degree of reasonable care was required? c) Who is the judge of the adequacy of reasonable care? d) What degree of adequate reasonable care was required?

b) What degree of reasonable care was required? c) Who is the judge of the adequacy of reasonable care?

What is meant by the word mitigation in the context of insurance claims? a) Actions that are taken to reduce the damage or negative effect of a claim b) Actions that are taken to lower the severity or negative effects of a claim c) Actions that are taken to lower the damage or negative effects of a claim d) Actions that are taken to reduce the severity or negative effects of a claim

d) Actions that are taken to reduce the severity or negative effects of a claim

When deciding on restoration or repair, which of the following need NOT be considered? a) The basis of settlement b) The short-term effects of damage c) Effective and acceptable restoration d) The long-term effects of damage

b) The short-term effects of damage

When considering a Gradually Operating Cause, which of the following does NOT need to be considered? a) Whether the Policyholder made a previous claim b) Whether the Policyholder could have known that the damage was occurring c) The action the Policyholder took when it became apparent that damage was occurring d) Any other exclusions that might apply

a) Whether the Policyholder made a previous claim

With regard to underground services, what is the FOS stance on accidental damage? a) It can occur in slow motion b) A gradually operating cause is acceptable c) Due to access, issues are to be expected resulting in acceptable claims d) Due to access, issues are to be expected resulting in claims to be repudiated

a) It can occur in slow motion

Where can policy exclusions for Gradually Operating Cause be found? a) General Exclusions b) Peril Specific exclusions c) General exclusions under specific perils d) General exclusions and/or peril specific exclusions

d) General exclusions and/or peril specific exclusions

Which of the following is NOT a penalty for underinsurance? a) Change of the basis of settlement b) Pro rata Average c) Day Two Average d) Reinstatement Average

c) Day Two Average

Which of the following is NOT a type of Average in Commercial Policies? a) Pro rata Condition of Average b) The Special Condition of Average c) The Two Conditions of Average d) The rate in lieu of Average

d) The rate in lieu of Average

Which of the following is the correct calculation for Average? a) Sum Insured divided by Value at Risk multiplied by Loss b) Value at Risk multiplied by Sum Insured divided by Loss c) Sum Insured multiplied by Value at Risk divided by Loss d) Loss divided by Sum Insured multiplied by Value at Risk

a) Sum Insured divided by Value at Risk multiplied by Loss

Which of the following is NOT something that you should include in repudiation? a) Your opinion of the loss and circumstances of the loss b) The limitation in cover in respect of the loss and why the claim is not covered c) Supporting evidence such as a quotation from the Policy d) A polite softener to close the matter off

a) Your opinion of the loss and circumstances of the loss

What should follow a verbal repudiation? a) A letter of confirmation to the Policyholder b) A letter of confirmation to the Insurer c) A letter of confirmation to the Broker d) A formatted copy of the claim file to the Insurer

a) A letter of confirmation to the Policyholder

Which of the following is NOT a fraud indicator? a) Attitude b) Work habits c) Hobbies d) Lifestyle

c) Hobbies

What is meant by money laundering? a) Theft of money with an intent to use legitimately b) Illegitimate money used legally c) An attempt to turn illegitimate money into legitimate money d) An attempt to transform money from dirty to clean

c) An attempt to turn illegitimate money into legitimate money

What is NOT part of the definition of Financial Crime, as provided by the Financial Services Act 2012 a) Illegal handling of a monetary amount for any given purpose b) Fraud or dishonesty c) Misconduct in, or misuse of information relating to, a financial market d) Handling the proceeds of crime

a) Illegal handling of a monetary amount for any given purpose

Which of the following is a financial crime? a) Identity theft b) Robbery of a bank c) Direct theft of money d) Unlawful distribution of illegitimate funds

a) Identity theft

The Money Laundering Regulations were introduced in which year? a) 2005 b) 2006 c) 2007 d) 2008

c) 2007