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IF8 > Chapter 5 > Flashcards

Chapter 5 Flashcards

1
Q

What is the information gathering and quotation process starting with information about the risk to be insured

A

Insurer

Information about the quotation and the cover

Insured

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2
Q

When did the Insurance Act 2015 come into effect

A) August 2016
B) September 2016
C) October 2016

A

A) August 2016

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3
Q

Prior to the passing of the insurance act 2015 the rules for gathering material information were largely governed by who

A) CIDRA
B) Marine insurance Act 1906

A

B) Marine insurance Act 1906

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4
Q

What is the below:

Every circumstance is material which would affect the judgment of a prudent underwriter in fixing the premium or determine whether he will take the risk

A) point of interest
B) material fact

A

B) material fact

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5
Q

What two things would effect the judgment of an insurer when it comes to material fact starting with

1) whether or not they want to accept the risk

A

2) if willing to Accept the risk. What premium and terms will apply

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6
Q

Who has a duty to disclose all material facts about the risks to the insurer

A) insurer
B) proposer

A

B) proposer

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7
Q

What has the process of information gathering been significantly changed by

A) insurance act 2015
B) CIDRA

A

A) insurance act 2015

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8
Q

Prior to the passing of the insurance act the position was considered to be unfairly weighted in favour of who

A) insured
B) insurer

A

B) insurer

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9
Q

Is the below a material circumstance

Info that should reasonably have been revealed by a reasonable search of info held with the insureds own organisation

A

Yes

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10
Q

Why was the reform of the Marine insurance act needed

A) it caused disputes reducing trust and confidence
B) it caused extra premiums for the insureds

A

it caused disputes reducing trust and confidence

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11
Q

Why was the Insurance act needed

A) it caused higher premiums
B) it was inconsistent with global business practice

A

B) it was inconsistent with global business practice

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12
Q

What was the aim of the Insurance Act 2015

A) to become neutral
B) to become neutral between the insurer and the insured

A

B) to become neutral between the insurer and the insured

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13
Q

What is the pre contractual duty of disclosure for the insurance act 2015

A) it requires policyholder to make a fair presentation of the risk to the insurer
B) it requires the policyholder to remedy for a breach of the duty

A

A) it requires policyholder to make a fair presentation of the risk to the insurer

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14
Q

What are the two things that a policyholder that has a duty of disclosure of starting with

Every material circumstance which the insured knows or ought to know that would influence the judgement of an insurer

A

Sufficient info on material circumstances to put a prudent insurer on notice that need to make further enquiries

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15
Q

What must the manner of presentation be

A) clear
B) reasonably clear and accessible

A

B) reasonably clear and accessible

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16
Q

Is the below a material circumstance

Those that the insurer ought to know in the ordinary course of conducting their business. They include info known by the senior management

A

Yes

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17
Q

Does the insured need to disclose the following:

Matters known to individuals who participate on behalf of the insurer in deciding whether to take the risk and in what terms (eg underwriting teams)

A

No

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18
Q

What happens if the breach was neither deliberate and reckless but the insurer would have entered into the policy but on different terms

A) may avoid the policy
B) must be treated as if it has been entered into on those different terms but can’t seek to avoid the policy all together. If the insurer would have charged more for the policy they are entitled to reduce the amount paid on a claim

A

B) must be treated as if it has been entered into on those different terms but can’t seek to avoid the policy all together. If the insurer would have charged more for the policy they are entitled to reduce the amount paid on a claim

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19
Q

Does the insured need to disclose the following:

Matters known by an employee or agent of the insurer, which should reasonably have been passed on to the person deciding whether to take the risk (eg claims department)

A

No

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20
Q

What is contracting out subject to:

A) transparency requirements
B) clear and ambiguous terms

A

A) transparency requirements

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21
Q

What does the transparency requirements state

A) that all terms must be clear and unambiguous before the contract is entered into

B) that there is a pre contractual duty or disclosure

A

A) that all terms must be clear and unambiguous before the contract is entered into

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22
Q

Prior to the insurance act 2015 any breach of the duty of disclosure gave insurers the right to:

A) not pay the claim
B) avoid the contract in its entirety

A

B) avoid the contract in its entirety

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24
Q

What two things must be met for transparency requirements starting herb

The insureds likely life’s of understanding of insurance

A

2) the circumstances of the transaction

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25
Q

What means if the breach is deliberate or reckless

A) the insured didn’t know or care that they are in breach of their duty of fair presentation

B) beaches made innocently or merely carelessly

A

A) the insured didn’t know or care that they are in breach of their duty of fair presentation

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26
Q

What are the physical characteristics referring to:

Systems or check and control

) property damage
B) liability
C) personal accident
D) fidelity insurance

A

D) fidelity

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27
Q

Is the below a material circumstance

Confidential info acquired through a business relationship unconnected to the contract of insurance

A

No

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28
Q

Is the below a general question Or specific questions for prop form

Contents- sums insured

A

Specific

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29
Q

What does it mean if a beach was neither deliberate nor reckless

A) the insured didn’t know or care that they are in breach of their duty of fair presentation

B) beaches made innocently or merely carelessly

A

B) beaches made innocently or merely carelessly

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31
Q

What happens if the breach was not deliberate or reckless but the insurer would not have entered the policy on any terms

A) the policy must be treated as it had been entered

B) the insurer may avoid the policy and refuse to pay all claims but must return the premiums paid

A

B) the insurer may avoid the policy and refuse to pay all claims but must return the premiums paid

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32
Q

What does the IA2 contain 2 provisions concerning starting with

The effect of warranties contained in the policy

A

2) insurers remedies for fraudulent claims

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33
Q

What is one area of concern for the duty of fair presentation

A) or cover is placed online
B) if premiums are competitive

A

) or cover is placed online

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34
Q

What is a fair presentation or risk guarantee

A) that provide the insured answers the online questions and assumptions accurately they will accept as a fair presentation of the risk

B) that if all questions are answered correctly terms must be upheld

A

A) that provide the insured answers the online questions and assumptions accurately they will accept as a fair presentation of the risk

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35
Q

Is the below a peril or hazard

Is an event which can cause a loss

A

Peril

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36
Q

Is the below a peril or hazard

Is not itself the cause of a loss but it can increase or decrease the effect of a peril and may make the operation of a peril more likely

A

Hazard

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37
Q

What does physical hazard relate to:

A) physical characterises of the risk, in other words the measurable dimensions
B) the cause of loss

A

A) physical characterises of the risk, in other words the measurable dimensions

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38
Q

What are the physical characteristics referring to:

Construction of the building, type of stock, security features

A) property damage
B) liability
C) personal accident
D) fidelity insurance

A

A) property damage

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39
Q

What are the physical characteristics referring to:

Type of business

A) property damage
B) liability
C) personal accident
D) fidelity insurance

A

B) liability

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40
Q

Is the below a general question Or specific questions for prop form

Concerning the proposer and their business

A

General

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41
Q

What are the physical characteristics referring to:

Age, occupation

) property damage
B) liability
C) personal accident
D) fidelity insurance

A

C) personal accident

42
Q

Is the below a general question Or specific questions for prop form

Computers

A

Specific

43
Q

What is the prime consideration in relation to moral hazard

A) the insured person
B) the insurer

A

A) the insured person

44
Q

Is the below a material circumstance

Information held by others such as the insureds brokers

A

Yes

46
Q

Are the below example of physical or moral hazard

The submission of false or exaggerated claims

The insured withholding or misrepresent essential information

Failure of the insured to take reasonable care to prevent loss

A

Moral

47
Q

What is a convenient, speedy and cost effective way for insurers to gather information

A) proposal forms
B) online forums
C) social media

A

A) proposal forms

48
Q

Under the IA 2015 what must insureds take care to do on prop forms

A) make a fair presentation of the risk
B) known to be a material to risk

A

A) make a fair presentation of the risk

49
Q

Does the insured need to disclose the following:

Knowledge which is held by the insurer and is readily available to the person deciding whether to take the risk

A

No

49
Q

What happens if the breach was deliberate or reckless

A) insurer can treat the policy as if it never existed and decline all claims. They don’t need to return any premiums paid

B) the insured must return premiums paid

A

A) insurer can treat the policy as if it never existed and decline all claims. They don’t need to return any premiums paid

49
Q

Instead of a specific question on a prop form what may happen

A

There may be a standard declaration detailing criteria which the proposer must confirm are true

50
Q

Is the below a general question Or specific questions for prop form

Shops- type of goods and value of target stock

A

Specific

51
Q

Is the below a general question Or specific questions for prop form

Details of previous claims

A

General

53
Q

What do ICOBS require under the IA 2015 legal requirements

A) they require insurers and intermediaries to speak rally explain to the insured their duty to disclose all circumstances material to a policy and what happens if they breach this duty

B) it is a legal requirement to disclose all items that could be breached

A

A) they require insurers and intermediaries to speak rally explain to the insured their duty to disclose all circumstances material to a policy and what happens if they breach this duty

54
Q

Is the below a general question Or specific questions for prop form

Name of the proposer- needed to indicate trade. Correspondence purposes etc

A

General

55
Q

Is the below a general question Or specific questions for prop form

Concerning the specific type of insurance being proposed

A

Specific

55
Q

Is the below a general question Or specific questions for prop form

The business of the proposer- allows the risk to be considered fully

A

General

56
Q

What should a sole trader name be like on a prop form

A

Should shown all the full names including all forenames

57
Q

What should a partnership name be like on a proposal form

A

Should show the full names as well as the partnership name eg

Jodie Collins T/A The dickhead

59
Q

What should a limited company name look like on a proposal form

A

Show the name of the company and not that or the shareholders

60
Q

Is the below a general question Or specific questions for prop form

The address of the proposer/ need for both correspondence and rating purposes

A

General

61
Q

What contained a duty to disclose material facts implicit in all insurance negotiations and this was particularly important at the proposal stage

A) Marine insurance Act 1906
B) CIDRA

A

A) Marine insurance Act 1906

62
Q

Is the below a general question Or specific questions for prop form

Period of insurance

A

General

63
Q

Is the below a general question Or specific questions for prop form

Details of other insurances- contribution and potential dual insurance

A

General

64
Q

Is the below a general question Or specific questions for prop form

Moral history/ convictions, bankruptcy

A

General

65
Q

What seeks information on the risk, it’s nature and risk management

A) specific questions
B) general questions

A

A) specific questions

66
Q

Is the below a general question Or specific questions for prop form

Premises- whether they are in a good state or repair; whether the premises are in the insureds sole occupation; construction details, rebuilding cost of buildings

A

Specific

67
Q

Is the below a general question Or specific questions for prop form

Security- alarms etc

A

Specific

67
Q

Is the below a general question Or specific questions for prop form

Business all risks- nature and value of contents

A

Specific

68
Q

Is the below a general question Or specific questions for prop form

Money/ max amount or money in transit

A

Specific

69
Q

Is the below a general question Or specific questions for prop form

Insurance history- been refused/ declined etc

A

General

69
Q

Is the below a general question Or specific questions for prop form

BI- basis of cover, indemnity period. Sum insured for book debts

A

Specific

70
Q

Is the below an eligibility criteria or a statement of fact

Details about the risk given by the proposer in response to questions on the checklist

The standard declaration, detailing criteria which the proposer which the proposer will have confirmed are true

A

Statement of fact

71
Q

Is the below a general question Or specific questions for prop form

Personal Accident- number of employees

A

Specific

72
Q

Is the below a general question Or specific questions for prop form

Hotels/ number of bedrooms, facilities and entertainment provided

A

Specific

73
Q

Is the below a general question Or specific questions for prop form

Commercial liability- details of work in high risk premises, overseas or at heights

A

Specific

74
Q

What is the insurance checklist cover

A) the same type of info as a prop form but instead of the proposer having to write everything down asks the prop a series of on screen promoted questions

B) statement of fact

A

A) the same type of info as a prop form but instead of the proposer having to write everything down asks the prop a series of on screen promoted questions

75
Q

What will an insurance checklist contain:

A) a statement or fact
B) an eligibility statement

A

B) an eligibility statement

76
Q

Is the below an eligibility criteria or a statement of fact

Proposers moral history,
Claims history
Security construction and maintenance
Business activities

A

Eligibility criteria

77
Q

Is the below an initial disclosure documentation or demands and needs

Must be established before an intermediary provides a recommendation

A

D&N

78
Q

Is the below an eligibility criteria or a statement of fact

Any incorrect or incomplete information must be notified to the insurer

A

Statement f fact

79
Q

What is a scheme underwriter

A) where an underwriter from the insurer works in an intermediary’s office and they get provided info from a prop form, checklist or accessing the info on the intermediary’s files

B) chose an intermediary’s services specifically

A

A) where an underwriter from the insurer works in an intermediary’s office and they get provided info from a prop form, checklist or accessing the info on the intermediary’s files

80
Q

What do some intermediaries find cost effective to obtain information from

A) scheme underwriters
B) meeting with the client
C) survey

A

B) meeting with the client

81
Q

Is the below a general question Or specific questions for prop form

Liability- limits
Any work away from the premises

A

Specific

82
Q

What are the other 6 ways to obtain information other than proposal forms

A 
1- insurance checklists
2- statement of fact
3- scheme underwriters
4- meetings with the client 
5- surveys
6- the internet
83
Q

Under her FCA handbook what sections are the below:

The information which must be provided
The process for providing it
When it must be provided

A)ICOBS
B) PRA
C) FSA

A

A) ICOBS

84
Q

Is the below a general question Or specific questions for prop form

Glass- dimensions, type or glass and fittings

A

Specific

85
Q

Is there a requirement to issue initial disclosure documentation or a demands and needs statement when an insurer deals directly with a commercial customer

A

No

86
Q

Is the below an initial disclosure documentation or demands and needs

The FCA rules give get some of certain info about the intermediary and it services which must be provided before the conclusion of an initial contest of insurance

A

initial disclosure documentation

87
Q

Is the below an initial disclosure documentation or demands and needs

May be provided in:
Initial disclosure documentation prescribed by the FCA or
a standard term or business agreement developed by the intermediary that contains the relevant info

A

Initial disclosure

88
Q

Is the below an initial disclosure documentation or demands and needs

Following must be used-
Name and address
Details of any links
Whether it gives advice on the basis of a fair analysis of the market

A

Initial disclosure

89
Q

Is the below an initial disclosure documentation or demands and needs

Following must be used
Details of any fees
Procedures to be followed if the customer has a complaint
Whether the financial services compensation scheme applies

A

Initial disclosure

90
Q

Is the below an initial disclosure documentation or demands and needs

Info must be given in a clear, accurate and comprehensible manner. Must be provided on paper or any other durable medium. But if cover is requested immediately orally is fine until they can sent it out

A

Initial disclosure

91
Q

Is the below an initial disclosure documentation or demands and needs

An intermediary must disclose the commission that it receives in connection with a policy of the customer requests it

A

Initial disclosure documentation

92
Q

Is the below an initial disclosure documentation or demands and needs

The following requirements must be fulfilled-
Suitability
Statement to D&N- implies that there is a comprehensive fact gathering exercise that must be undertaken placing the onus on the intermediary to establishing the facts

A

D&N

93
Q

Is the below a general question Or specific questions for prop form

Loss of licence

A

Specific

94
Q

Is the below an initial disclosure documentation or demands and needs

Must be issued prior the conclusion of the contract on paper or another durable medium

A

D&N

95
Q

To help prevent money laundering what must be checked if it’s genuine

A) company name
B) address

A

B) address

96
Q

Is the below a general question Or specific questions for prop form

Salons- details of treatments offered and if any equipment is hired out

A

Specific

97
Q

What is not needed if business is translated by post or phone providing the payment is made from the proposers account at an authorised financial or credit institution

A) the address and information in the prop form
B) the prop form
C) the address

A

A) the address and information in the prop form

IF8 (9 decks)

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