Chapter 5

Question 1

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

Answer 1

Insurer

Information about the quotation and the cover

Insured

Question 2

When did the Insurance Act 2015 come into effect

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

Answer 2

A) August 2016

Question 3

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

Answer 3

B) Marine insurance Act 1906

Question 4

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

Answer 4

B) material fact

Question 5

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

Answer 5

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

Question 6

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

A) insurer
B) proposer

Answer 6

B) proposer

Question 7

What has the process of information gathering been significantly changed by

A) insurance act 2015
B) CIDRA

Answer 7

A) insurance act 2015

Question 8

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

A) insured
B) insurer

Answer 8

B) insurer

Question 9

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

Answer 9

Yes

Question 10

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

Answer 10

it caused disputes reducing trust and confidence

Question 11

Why was the Insurance act needed

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

Answer 11

B) it was inconsistent with global business practice

Question 12

What was the aim of the Insurance Act 2015

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

Answer 12

B) to become neutral between the insurer and the insured

Question 13

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

Answer 13

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

Question 14

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

Answer 14

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

Question 15

What must the manner of presentation be

A) clear
B) reasonably clear and accessible

Answer 15

B) reasonably clear and accessible

Question 16

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

Answer 16

Yes

Question 17

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)

Answer 17

No

Question 18

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

Answer 18

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

Question 19

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)

Answer 19

No

Question 20

What is contracting out subject to:

A) transparency requirements
B) clear and ambiguous terms

Answer 20

A) transparency requirements

Question 21

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

Answer 21

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

Question 22

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

Answer 22

B) avoid the contract in its entirety

Question 24

What two things must be met for transparency requirements starting herb

The insureds likely life’s of understanding of insurance

Answer 24

2) the circumstances of the transaction

Question 25

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

Answer 25

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

Question 26

What are the physical characteristics referring to: Systems or check and control ) property damage B) liability C) personal accident D) fidelity insurance

Answer 26

D) fidelity

Question 27

Is the below a material circumstance Confidential info acquired through a business relationship unconnected to the contract of insurance

Answer 27

No

Question 28

Is the below a general question Or specific questions for prop form Contents- sums insured

Answer 28

Specific

Question 29

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

Answer 29

B) beaches made innocently or merely carelessly

Question 31

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

Answer 31

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

Question 32

What does the IA2 contain 2 provisions concerning starting with The effect of warranties contained in the policy

Answer 32

2) insurers remedies for fraudulent claims

Question 33

What is one area of concern for the duty of fair presentation A) or cover is placed online B) if premiums are competitive

Answer 33

) or cover is placed online

Question 34

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

Answer 34

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

Question 35

Is the below a peril or hazard Is an event which can cause a loss

Answer 35

Peril

Question 36

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

Answer 36

Hazard

Question 37

What does physical hazard relate to: A) physical characterises of the risk, in other words the measurable dimensions B) the cause of loss

Answer 37

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

Question 38

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

Answer 38

A) property damage

Question 39

What are the physical characteristics referring to: Type of business A) property damage B) liability C) personal accident D) fidelity insurance

Answer 39

B) liability

Question 40

Is the below a general question Or specific questions for prop form Concerning the proposer and their business

Answer 40

General

Question 41

What are the physical characteristics referring to: Age, occupation ) property damage B) liability C) personal accident D) fidelity insurance

Answer 41

C) personal accident

Question 42

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

Answer 42

Specific

Question 43

What is the prime consideration in relation to moral hazard A) the insured person B) the insurer

Answer 43

A) the insured person

Question 44

Is the below a material circumstance Information held by others such as the insureds brokers

Answer 44

Yes

Question 46

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

Answer 46

Moral

Question 47

What is a convenient, speedy and cost effective way for insurers to gather information A) proposal forms B) online forums C) social media

Answer 47

A) proposal forms

Question 48

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

Answer 48

A) make a fair presentation of the risk

Question 49

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

Answer 49

No

Question 49

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

Answer 49

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

Question 49

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

Answer 49

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

Question 50

Is the below a general question Or specific questions for prop form Shops- type of goods and value of target stock

Answer 50

Specific

Question 51

Is the below a general question Or specific questions for prop form Details of previous claims

Answer 51

General

Question 53

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

Answer 53

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

Question 54

Is the below a general question Or specific questions for prop form Name of the proposer- needed to indicate trade. Correspondence purposes etc

Answer 54

General

Question 55

Is the below a general question Or specific questions for prop form Concerning the specific type of insurance being proposed

Answer 55

Specific

Question 55

Is the below a general question Or specific questions for prop form The business of the proposer- allows the risk to be considered fully

Answer 55

General

Question 56

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

Answer 56

Should shown all the full names including all forenames

Question 57

What should a partnership name be like on a proposal form

Answer 57

Should show the full names as well as the partnership name eg Jodie Collins T/A The dickhead

Question 59

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

Answer 59

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

Question 60

Is the below a general question Or specific questions for prop form The address of the proposer/ need for both correspondence and rating purposes

Answer 60

General

Question 61

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

Answer 61

A) Marine insurance Act 1906

Question 62

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

Answer 62

General

Question 63

Is the below a general question Or specific questions for prop form Details of other insurances- contribution and potential dual insurance

Answer 63

General

Question 64

Is the below a general question Or specific questions for prop form Moral history/ convictions, bankruptcy

Answer 64

General

Question 65

What seeks information on the risk, it’s nature and risk management A) specific questions B) general questions

Answer 65

A) specific questions

Question 66

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

Answer 66

Specific

Question 67

Is the below a general question Or specific questions for prop form Security- alarms etc

Answer 67

Specific

Question 67

Is the below a general question Or specific questions for prop form Business all risks- nature and value of contents

Answer 67

Specific

Question 68

Is the below a general question Or specific questions for prop form Money/ max amount or money in transit

Answer 68

Specific

Question 69

Is the below a general question Or specific questions for prop form Insurance history- been refused/ declined etc

Answer 69

General

Question 69

Is the below a general question Or specific questions for prop form BI- basis of cover, indemnity period. Sum insured for book debts

Answer 69

Specific

Question 70

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

Answer 70

Statement of fact

Question 71

Is the below a general question Or specific questions for prop form Personal Accident- number of employees

Answer 71

Specific

Question 72

Is the below a general question Or specific questions for prop form Hotels/ number of bedrooms, facilities and entertainment provided

Answer 72

Specific

Question 73

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

Answer 73

Specific

Question 74

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

Answer 74

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

Question 75

What will an insurance checklist contain: A) a statement or fact B) an eligibility statement

Answer 75

B) an eligibility statement

Question 76

Is the below an eligibility criteria or a statement of fact Proposers moral history, Claims history Security construction and maintenance Business activities

Answer 76

Eligibility criteria

Question 77

Is the below an initial disclosure documentation or demands and needs Must be established before an intermediary provides a recommendation

Answer 77

D&N

Question 78

Is the below an eligibility criteria or a statement of fact Any incorrect or incomplete information must be notified to the insurer

Answer 78

Statement f fact

Question 79

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

Answer 79

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

Question 80

What do some intermediaries find cost effective to obtain information from A) scheme underwriters B) meeting with the client C) survey

Answer 80

B) meeting with the client

Question 81

Is the below a general question Or specific questions for prop form Liability- limits Any work away from the premises

Answer 81

Specific

Question 82

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

Answer 82

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

Question 83

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

Answer 83

A) ICOBS

Question 84

Is the below a general question Or specific questions for prop form Glass- dimensions, type or glass and fittings

Answer 84

Specific

Question 85

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

Answer 85

No

Question 86

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

Answer 86

initial disclosure documentation

Question 87

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

Answer 87

Initial disclosure

Question 88

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

Answer 88

Initial disclosure

Question 89

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

Answer 89

Initial disclosure

Question 90

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

Answer 90

Initial disclosure

Question 91

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

Answer 91

Initial disclosure documentation

Question 92

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

Answer 92

D&N

Question 93

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

Answer 93

Specific

Question 94

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

Answer 94

D&N

Question 95

To help prevent money laundering what must be checked if it’s genuine A) company name B) address

Answer 95

B) address

Question 96

Is the below a general question Or specific questions for prop form Salons- details of treatments offered and if any equipment is hired out

Answer 96

Specific

Question 97

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

Answer 97

A) the address and information in the prop form