Chapter 2 Flashcards by Charlotte Cummins

What was the primary reason for the establishment of the Motor Insurers’ Bureau (MIB) in 1946?

A) To ensure insurers cover claims for all road accidents.
B) To provide compensation for victims of accidents caused by uninsured or untraced drivers.
C) To regulate insurance premiums in the UK.
D) To manage claims resulting from motor vehicle-related terrorism.

B) To provide compensation for victims of accidents caused by uninsured or untraced drivers.

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How is the Motor Insurers’ Bureau (MIB) primarily funded?

A) Through government grants and subsidies.
B) By the levy on UK motor insurers, based on their gross premium income.
C) By collecting fines from uninsured drivers.
D) Through voluntary donations from the public.

B) By the levy on UK motor insurers, based on their gross premium income.

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What is the role of the levy paid by MIB members?

A) To cover the MIB’s operating costs and compensation for uninsured claims.
B) To regulate insurance policy pricing in the UK.
C) To fund road safety campaigns across the UK.
D) To provide compensation to drivers whose vehicles are stolen.

A) To cover the MIB’s operating costs and compensation for uninsured claims.

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What did the Motor Vehicles (Compulsory Insurance) (Miscellaneous Amendments) Regulations 2019 prevent?

A) Insurers avoiding liability through non-disclosure or misrepresentation.
B) The MIB from handling claims related to uninsured drivers.
C) Insured drivers from making claims for personal injuries.
D) Uninsured drivers from receiving compensation for accidents.

A) Insurers avoiding liability through non-disclosure or misrepresentation.

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What new responsibility does the MIB have regarding claims related to terrorism?

A) It handles all personal injury claims from terrorism-related accidents.
B) It now handles motor vehicle-related claims arising from terrorist acts.
C) It compensates drivers involved in terrorist attacks.
D) It manages claims related to property damage from terrorist acts.

B) It now handles motor vehicle-related claims arising from terrorist acts.

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What type of claims does the Uninsured Drivers’ Agreement cover?

A) Claims for property damage up to £1.2m and unlimited compensation for death or injury.
B) Claims for vehicle damage where the claimant’s vehicle is uninsured.
C) Claims for property damage caused by uninsured drivers, but no compensation for injuries.
D) Claims for uninsured motorists’ legal costs in defending claims.

A) Claims for property damage up to £1.2m and unlimited compensation for death or injury.

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Which of the following is NOT covered by the Uninsured Drivers’ Agreement?

A) Claims where the claimant’s vehicle is uninsured for third-party risks.
B) Claims where the victim is aware the driver was uninsured or driving a stolen vehicle.
C) Claims from pedestrians injured in a hit-and-run accident.
D) Claims for terrorism-related damages to property.

C) Claims from pedestrians injured in a hit-and-run accident.

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What was a key change introduced by the 2017 Supplementary Agreement to the Uninsured Drivers’ Agreement?

A) Claims for property damage prior to 2008 are no longer excluded.
B) Claims for vehicle damage where the claimant’s vehicle is uninsured are no longer excluded.
C) The first £300 of property damage claims is no longer excluded.
D) Claims involving foreign drivers are now included.

B) Claims for vehicle damage where the claimant’s vehicle is uninsured are no longer excluded.

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What must a claimant do to allow the MIB to recover costs from an uninsured driver?

A) Pay a portion of their compensation to the MIB.
B) Transfer their insurance policy to the MIB.
C) Assign their right of recovery against the uninsured driver to the MIB.
D) Allow the MIB to represent them in court.

C) Assign their right of recovery against the uninsured driver to the MIB.

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Under the Uninsured Drivers’ Agreement, when is the MIB strictly liable to pay a claim?

A) When the claimant has obtained a judgment and it remains unsatisfied for 14 days.
B) When the claim is made within 30 days of the accident.
C) When the claimant has obtained a judgment that has been outstanding for seven days.
D) When the claim involves bodily injury only.

C) When the claimant has obtained a judgment that has been outstanding for seven days.

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Under the Untraced Drivers’ Agreement, when is the MIB liable to pay a claim?

A) Whenever an accident occurs involving an untraced driver.
B) Only if the accident occurred on a ‘road’ as defined by the RTA and the untraced driver would have been found liable.
C) If there is a police report proving the accident happened.
D) Only when the vehicle is identified.

B) Only if the accident occurred on a ‘road’ as defined by the RTA and the untraced driver would have been found liable.

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How did the 2011 Supplementary Agreement impact property damage claims?

A) It introduced a new £500 excess for all property damage claims.
B) It removed the excess for property damage claims where the offending vehicle was identified.
C) It eliminated all compensation for property damage claims.
D) It raised the property damage compensation cap to £5 million.

B) It removed the excess for property damage claims where the offending vehicle was identified.

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Which of the following changes was introduced in the 2017 Untraced Drivers’ Agreement?

A) The definition of Significant Personal Injury (SPI) was changed to include death, two or more inpatient days, or three or more outpatient sessions.
B) The property damage excess was reduced to £200.
C) The MIB no longer investigates claims involving untraced drivers.
D) All claims must now be reported to the police within 24 hours.

A) The definition of Significant Personal Injury (SPI) was changed to include death, two or more inpatient days, or three or more outpatient sessions.

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What was the key legal issue in Cameron v. Hussain (2017)?

A) Whether insurers were liable for claims where the driver was untraced but the vehicle was identified.
B) Whether the MIB should compensate all victims of road accidents.
C) Whether the time limit for claims should be extended to 5 years.
D) Whether the MIB should introduce a separate fund for property damage claims.

A) Whether insurers were liable for claims where the driver was untraced but the vehicle was identified.

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How does the MIB fund compensation for victims under the Untraced Drivers’ Agreement?

A) Through a government grant.
B) Through a levy on all UK motor insurers, passed on to policyholders through premiums.
C) By charging a fee to claimants.
D) From court fines collected from uninsured drivers.

B) Through a levy on all UK motor insurers, passed on to policyholders through premiums.

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What is the purpose of Article 75 in the MIB’s Articles of Association?

A) To allow insurers to avoid all liability for uninsured claims.
B) To require insurers to meet certain claims even when they have no strict contractual or RTA liability.
C) To provide government funding for uninsured claims.
D) To transfer all uninsured claims to the MIB’s Central Fund.

B) To require insurers to meet certain claims even when they have no strict contractual or RTA liability.

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Which of the following scenarios would trigger Article 75 liability for an insurer?

A) A policy is voided after an accident, but the insurer had already obtained a declaration under RTA s.152 before the accident.
B) A policy is correctly cancelled, but the insurer failed to update the Motor Insurance Database (MID).
C) A driver with a valid policy is involved in an accident and admits fault.
D) A policyholder voluntarily cancels their policy before selling their vehicle.

B) A policy is correctly cancelled, but the insurer failed to update the Motor Insurance Database (MID).

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Under Article 75, who is responsible for paying the claim when a vehicle is deemed uninsured for RTA purposes?

A) The MIB’s Central Fund.
B) The government.
C) The insurer, even though they have no strict contractual or RTA liability.
D) The claimant’s own insurer, through subrogation.

C) The insurer, even though they have no strict contractual or RTA liability.

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Which of the following is a limitation on Article 75 liabilities?

A) Insurers must cover all uninsured losses, including subrogated claims.
B) Subrogated claims are excluded, meaning insurers cannot recover outlays from another party via the MIB.
C) Insurers can refuse to handle uninsured claims altogether.
D) Article 75 only applies to policies issued after October 2022.

B) Subrogated claims are excluded, meaning insurers cannot recover outlays from another party via the MIB.

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What is the legal consequence of making a false declaration under RTA Part VII s.174(5)?

A) It is considered a civil offence with no legal penalties
B) It is an offence if done to obtain an insurance certificate
C) It automatically voids the insurance policy from inception
D) It only affects third-party claims and not the policyholder

B) It is an offence if done to obtain an insurance certificate

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According to s.152 of the RTA, when is information considered ‘material’?

A) When it is relevant to an insurer’s decision on risk and policy terms
B) When the policyholder believes it is important
C) When the insurer asks for it, regardless of its impact on underwriting
D) Only when it relates to a criminal conviction

A) When it is relevant to an insurer’s decision on risk and policy terms

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Why does a false declaration not immediately lead to a prosecution for driving without insurance?

A) The insurer must first confirm whether they will avoid the policy
B) False declarations only affect the insurer, not the policyholder
C) The RTA does not consider misrepresentation a serious issue
D) Police must first issue a warning before prosecuting

A) The insurer must first confirm whether they will avoid the policy

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What was the significance of the Adams v. Dunne (1978) case?

A) A driver can be convicted of driving without insurance immediately after a false declaration
B) A driver cannot be convicted of driving without insurance until the insurer has formally avoided the policy
C) Insurers can retrospectively void policies from inception without due process
D) Any false declaration automatically cancels insurance cover under the RTA

B) A driver cannot be convicted of driving without insurance until the insurer has formally avoided the policy

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What is the legal consequence of making a false declaration under RTA Part VII s.174(5)?

B) It is an offence if done to obtain an insurance certificate

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According to s.152 of the RTA, when is information considered 'material'? A) When it is relevant to an insurer's decision on risk and policy terms B) When the policyholder believes it is important C) When the insurer asks for it, regardless of its impact on underwriting D) Only when it relates to a criminal conviction

A) When it is relevant to an insurer's decision on risk and policy terms

Why does a false declaration not immediately lead to a prosecution for driving without insurance? A) The insurer must first confirm whether they will avoid the policy B) False declarations only affect the insurer, not the policyholder C) The RTA does not consider misrepresentation a serious issue D) Police must first issue a warning before prosecuting

A) The insurer must first confirm whether they will avoid the policy

What was the significance of the Adams v. Dunne (1978) case? A) A driver can be convicted of driving without insurance immediately after a false declaration B) A driver cannot be convicted of driving without insurance until the insurer has formally avoided the policy C) Insurers can retrospectively void policies from inception without due process D) Any false declaration automatically cancels insurance cover under the RTA

B) A driver cannot be convicted of driving without insurance until the insurer has formally avoided the policy

What is the main offence under RTA Part VII s.173(1)? A) Creating or using a forged document with intent to deceive B) Losing an official document and failing to report it C) Using an expired certificate of insurance D) Forgetting to carry insurance documents while driving

A) Creating or using a forged document with intent to deceive

What additional offence is covered under s.173(1)? A) Allowing someone else to use a forged document B) Failing to renew an insurance certificate on time C) Refusing to provide insurance details to the police D) Accidentally damaging an insurance certificate

A) Allowing someone else to use a forged document

What does s.173(1) say about documents that resemble official documents? A) It is only illegal if the document is used in a transaction B) It is an offence to make or possess such a document if it is likely to deceive C) It is only a civil offence, not a criminal one D) It applies only to banknotes and passports, not insurance documents

B) It is an offence to make or possess such a document if it is likely to deceive

Under s.173(1), which type of document is specifically mentioned? A) A certificate of insurance B) A driving test certificate C) A vehicle service record D) A road tax disc

A) A certificate of insurance

What does RTA Part VII s.175 prohibit? A) Any error in an insurance certificate, regardless of intent B) Issuing an insurance certificate that is knowingly false in a material way C) Selling insurance policies at a discount D) Failing to provide an insurance certificate on request

B) Issuing an insurance certificate that is knowingly false in a material way

What is required for an offence to be committed under s.175? A) Any false information, regardless of intent B) The issuer must have known the information was false C) The policyholder must suffer a financial loss D) The insurer must revoke the policy

B) The issuer must have known the information was false

What was the key ruling in Ocean Accident and Guarantee Corporation v. Cole (1932)? A) Any mistake in an insurance certificate is a criminal offence B) An innocent mistake does not count as issuing a false document under s.175 C) A backdated insurance certificate is always illegal D) The insurer is always liable for mistakes in issued certificates

B) An innocent mistake does not count as issuing a false document under s.175

What does 'false in a material particular' mean under s.175? A) Any minor error in an insurance certificate B) Information that affects the validity or coverage of the policy C) Only financial details, such as premium amounts D) Any statement that is incorrect, even if irrelevant to the policy

B) Information that affects the validity or coverage of the policy

A broker accidentally types the wrong vehicle registration number on a certificate of insurance. They realize the mistake later and correct it. Have they committed an offence under s.175? A) Yes, because any error in an insurance document is illegal B) No, because the mistake was not made knowingly C) Yes, because the mistake could have misled the policyholder D) No, because brokers are not responsible for document accuracy

B) No, because the mistake was not made knowingly

A driver purchases insurance for social and domestic use but unknowingly uses their car for business purposes. What type of uninsured driving is this? A) Accidental uninsured driving B) Intentional uninsured driving C) Fraudulent uninsured driving D) Non-motor-related criminal activity

A) Accidental uninsured driving

A person with a history of driving offences chooses not to buy insurance, assuming they won’t get caught. They also drive without a valid MOT and road tax. How would the Greenaway Report classify this behaviour?

B) Intentional uninsured driving

A driver renews their insurance but forgets to check the new policy covers their additional use of the car for commuting. If stopped by police, how would this situation be classified? A) No offence has occurred B) Accidental uninsured driving C) Intentional uninsured driving D) Non-motor criminal activity

B) Accidental uninsured driving

A driver cancels their insurance policy after receiving their car’s tax renewal notice. They continue to drive daily, believing they won’t be detected. What type of offence is this? A) A minor offence with no penalty B) Accidental uninsured driving C) Intentional uninsured driving D) An issue that only affects the insurer

C) Intentional uninsured driving

A driver is caught using a fake insurance certificate to release their impounded car. What measure prevents this? A) The Road Safety Act 2006 B) Insurers’ voluntary exclusion clauses for impounded vehicle cover C) The introduction of ANPR cameras D) The MIB's financial compensation scheme

B) Insurers’ voluntary exclusion

A police officer scans a vehicle’s number plate and discovers it is uninsured. What technology is being used? A) Manual insurance certificate checks B) Motor Insurance Database (MID) linked to ANPR cameras C) Vehicle registration lookup by calling the DVLA D) Reports from local garages about uninsured vehicles

B) Motor Insurance Database (MID) linked to ANPR cameras

A person forgets to renew their car insurance and continues driving. What legislation could result in their car being seized? A) The introduction of No Claims Bonus protection B) The Serious and Organised Crime and Police Act 2005 C) The Greenaway Report’s recommendation for voluntary insurer guidelines D) The 2011 implementation of Continuous Insurance Enforcement (CIE)

D) The 2011 implementation of Continuous Insurance Enforcement (CIE)

A vehicle owner deliberately cancels their insurance but continues driving, assuming they won’t get caught. What action can authorities take? A) Send a warning letter but take no further action B) Use MID and ANPR technology to detect and seize the vehicle C) Charge a late renewal fee but allow them to continue driving D) Require them to complete a mandatory driving course

B) Use MID and ANPR technology to detect and seize the vehicle

What is the primary aim of Continuous Insurance Enforcement (CIE)? A) To identify uninsured vehicles from the DVLA and MID records B) To issue fines to drivers caught without insurance at police checkpoints C) To encourage drivers to take out fully comprehensive insurance D) To allow insurers to cancel policies without informing customers

A) To identify uninsured vehicles from the DVLA and MID records

A driver forgets to renew their insurance and does not use the vehicle. What could happen under CIE? A) Nothing, because the vehicle is not being used B) They could receive a warning letter, then a fine, and possibly have their vehicle clamped C) The police would arrest them for driving without insurance D) The insurer would automatically renew the policy without informing the driver

B) They could receive a warning letter, then a fine, and possibly have their vehicle clamped

A registered keeper sells their car but does not inform the DVLA. The new owner fails to insure it. Who is responsible? A) The new owner, because they now have the car B) The registered keeper, unless they update the DVLA records C) The insurer, because they should have checked the policy details D) The police, for not enforcing insurance at the point of sale

B) The registered keeper, unless they update the DVLA records

A driver receives a CIE warning letter but their car is actually insured. What should they do? A) Ignore the letter, assuming the system will correct itself B) Check with their insurer and ensure details are correctly recorded on the MID C) Immediately pay the fine to avoid further issues D) Contact the police to dispute the letter

B) Check with their insurer and ensure details are correctly recorded on the MID

A person owns a classic car that is kept in a garage and never driven. How can they avoid CIE penalties? A) They must buy insurance regardless of whether they drive the car B) They should submit a Statutory Off Road Notification (SORN) to the DVLA C) They must pay a fine every year if they do not insure the vehicle D) They should register the vehicle in another person's name

B) They should submit a Statutory Off Road Notification (SORN) to the DVLA

A driver ignores multiple CIE notices and refuses to insure their vehicle. What is the final consequence? A) Their driving licence is automatically suspended B) The vehicle can be clamped, seized, or destroyed C) They will receive a permanent ban from buying car insurance D) The fine will increase to £5,000

B) The vehicle can be clamped, seized, or destroyed

What happens if a registered keeper ignores a CIE warning letter and fixed penalty notice? A) The police will issue a driving ban B) The vehicle may be clamped, removed, or disposed of C) The driver will be required to take a mandatory insurance course D) The vehicle's registration will be permanently cancelled

B) The vehicle may be clamped, removed, or disposed of

What is the primary purpose of the Motor Insurance Database (MID)? A) To help insurers detect fraudulent claims B) To enable the police to check if a vehicle is insured and assist in international claims handling C) To store driving history records of all UK motorists D) To help drivers compare insurance prices

B) To enable the police to check if a vehicle is insured and assist in international claims handling

Which organization manages the MID? A) The Financial Conduct Authority (FCA) B) The Department for Transport (DfT) C) The Motor Insurers’ Bureau (MIB) via the UK Information Centre (UKIC) D) The Association of British Insurers (ABI)

C) The Motor Insurers’ Bureau (MIB) via the UK Information Centre (UKIC)

A foreign driver is involved in an accident in the UK. How does the MID assist? A) The police can use the MID to verify the UK vehicle's insurance details B) The MID automatically processes the insurance claim C) The driver must manually provide their insurance details to authorities D) The MID informs the DVLA of the accident

A) The police can use the MID to verify the UK vehicle's insurance details

What is the time target for insurers to supply data for individually insured vehicles (MID1) to the MID? A) 30 days B) 7 days C) 14 days D) 21 days

B) 7 days

What happens if an insurer fails to meet the data submission target for the MID? A) The insurer will be automatically penalized by the DVLA B) The insurer may face sanctions under the MIB Data Quality Self-Regulation Sanction Rules C) The insurer is required to submit a new policy immediately D) The insurer is fined by the police

B) The insurer may face sanctions under the MIB Data Quality Self-Regulation Sanction Rules

A vehicle's insurance details are not appearing on the MID. The driver claims the vehicle is insured. How can the police verify this? A) By inspecting the vehicle's paperwork B) By using the MIB-operated police helpline C) By waiting for an update on the MID D) By contacting the DVLA

B) By using the MIB-operated police helpline

What happens if the cost of insurance rises significantly? A) Insurers will offer higher coverage B) The market for the product may diminish C) The number of claims will decrease D) Insurers will be forced to reduce premiums

B) The market for the product may diminish

Why do insurers have a fundamental interest in reducing risk? A) To increase the number of claims B) To increase premiums C) To ensure the sustainability of the insurance market and maintain affordable premiums D) To avoid providing coverage for high-risk drivers

C) To ensure the sustainability of the insurance market and maintain affordable premiums

Which database, launched in 2014, enables insurers to verify driver information? A) The Motor Insurance Repair Research Centre (MIRRC) B) MyLicence (formerly IIADD) C) The Insurance Fraud Register (IFR) D) The Driver Information Database (DID)

B) MyLicence (formerly IIADD)