CII IF1 Chapter 3 Flashcards
If a reinsurer has been asked to provide reinsurance and has agreed the terms of this, what further action is required to complete the contract?
The insurer needs to agree to make a payment to the reinsurer.
An independent insurance broker acts as the agent of the insurance company when:
The broker has authority from the insurer to handle proposal forms and confirm cover.
For a contract to be valid and enforceable it must be what?
involve an offer and an acceptance and be supported by consideration
Mr Smith decides to accept a travel insurer’s offer of cover for £25. His wife subsequently decides to join him on holiday. He contacts the insurance company to say that he will accept their offer, if his wife’s possessions are also included in the cover.
What would you consider to be the correct contractual position?
Mr Smith has made a counter-offer which the insurance company is entitled to accept or decline
When is a contract made when dealing with postal acceptance?
When the acceptance is posted.
How long do you have to cancel a payment protection policy?
-14 days
-30 days
-10 working days
-You can always cancel
30 days
Jerry has his car stolen mid-way through the term of his motor insurance policy and his motor insurer pays a total loss settlement based on the car’s pre-theft value.
What do you suppose will happen to the cover under Jerry’s motor policy following the settlement?
The policy is cancelled and there is no return premium because the contract has been fulfilled by paying out the value of the car.
What would become of an insurance contract in the following scenario?
James deliberately tells his insurer he has no previous driving convictions when, in fact, he served a five year sentence for drink-driving.
Void ab initio
Where a policyholder breaches a policy condition what happens?
The policy is voidable meaning the insurer can either accept or void the policy dependant on the risk at hand.
What would become of an insurance contract in the following scenario?
Dave fails to tell his insurer of a theft from his property within the required 30 days.
Where an insured fails to meet claim conditions, the claim itself is likely to fail, but the policy itself will continue. So, it is neither void or voidable.
What are the 3 methods of creating an agency/ principle relationship
Consent (Most common)
Necessity
Ratification
Certain duties are imposed on both parties by the general law of agency, irrespective of whether such a TOBA exists.
Which of the duties below are imposed on the Agent?
-Remuneration
-Obedience
-Personal Performance
-Due care and skill
-Indemnity
-Obedience
-Personal Performance
-Due care and skill
Which of the following are specific duties of a principal to their agent?
Remuneration; Indemnity
What is the document called that sets out the basis of the relationship between the intermediary and the insurer?
An agency agreement between a broker and a policyholder would NOT be terminated by which of the following:
-mutual agreement.
-the broker requesting termination of the agreement.
-bankruptcy of the policyholder.
-an insurance claim.
An insurance claim.
