IF2 Examination Guide

Question 1

A legal expenses insurance policy normally covers the insured for
A. the cost of attending jury service.
B. fines and penalties incurred.
C. negligent advice provided by the insured.
D. solicitors’ costs incurred in pursuing a claim against a third party.

Answer 1

D. solicitors’ costs incurred in pursuing a claim against a third party.

Question 2

Under which insurance policy does an employer normally insure his liability in respect of injury to his employees being driven as passengers in the employer’s cars?
A. An employers’ liability insurance policy.
B. A motor insurance policy.
C. A personal accident insurance policy.
D. A public liability insurance policy.

Answer 2

B. A motor insurance policy.

Question 3

An employee is assaulted and robbed of his employer’s takings whilst en route to bank them. Which insurance policy is most likely to provide personal accident benefits to the employee for the injuries sustained during the robbery?
A. An employers’ liability insurance policy.
B. A money insurance policy.
C. A public liability insurance policy.
D. A theft insurance policy.

Answer 3

B. A money insurance policy.

Question 4

Under a personal accident insurance policy, standard cover normally provides for payment of
A. benefits while incapacitated.
B. damages for pain and suffering.
C. private medical expenses.
D. private nursing.

Answer 4

A. benefits while incapacitated.

Question 5

Under a third party only private motor insurance policy, cover in respect of third party property damage is usually subject to what maximum limit?
A. £250,000
B. £1,200,000
C. £10,000,000
D. £20,000,000

Answer 5

D. £20,000,000

Question 6

What element of cover under a buildings insurance policy normally attracts a substantial compulsory excess?
A. Earthquake.
B. Impact.
C. Storm and flood.
D. Subsidence, ground heave and landslip.

Answer 6

D. Subsidence, ground heave and landslip.

Question 7

When criminal prosecution defence cover is included under a commercial legal expenses insurance policy, what type of fines, if any, are typically covered?
A. Fines are not covered.
B. Fines above the policy excess.
C. Fines which equal or exceed the franchise.
D. All fines are covered.

Answer 7

A. Fines are not covered.

Question 8

In what way are legal costs for landlord/tenant disputes normally covered, if at all, under the legal expenses extension of a household insurance policy?
A. All costs are covered rather than just court fees.
B. A significantly lower excess applies.
C. The standard sum insured limit is doubled.
D. They are not covered.

Answer 8

D. They are not covered.

Question 9

Under what type of insurance policy is a material damage warranty automatically imposed?
A. A business interruption insurance policy.
B. An extended warranty insurance policy.
C. A products liability insurance policy.
D. A professional indemnity insurance policy.

Answer 9

A. A business interruption insurance policy.

Question 10

What limit of indemnity is normally provided under an employers’ liability insurance policy?
A. £2,000,000
B. £5,000,000
C. £10,000,000
D. £25,000,000

Answer 10

C. £10,000,000

Question 11

One of the common exclusions under an extended warranty insurance policy relates to any risks normally covered by which other type of insurance policy?
A. A buildings insurance policy.
B. A household contents insurance policy.
C. A motor insurance policy.
D. A theft insurance policy.

Answer 11

B. A household contents insurance policy.

Question 12

Under a typical extended warranty insurance policy, what proportion of the cost of labour and parts is normally covered?
A. 80% of the cost of both labour and parts.
B. 80% of the cost of labour and 100% of the cost of parts.
C. 100% of the cost of both labour and parts.
D. 100% of the cost of labour and 80% of the cost of parts.

Answer 12

C. 100% of the cost of both labour and parts.

Question 13

A commercial property insurance policy will usually exclude damage arising from impact by
A. aircraft.
B. animals.
C. own vehicles.
D. third party vehicles.

Answer 13

C. own vehicles.

Question 14

For theft of shop stock to be covered under a theft insurance policy, there would usually need to be evidence of
A. forcible and violent entry to and exit from the premises.
B. forcible or violent entry to and exit from the premises.
C. forcible and violent entry to or exit from the premises.
D. forcible or violent entry to or exit from the premises.

Answer 14

C. forcible and violent entry to or exit from the premises.

Question 15

Following an insured loss at a solicitor’s premises, which insurance policy specifically covers the solicitor for loss of profits?
A. A business interruption insurance policy.
B. A legal expenses insurance policy.
C. A money insurance policy.
D. A professional indemnity insurance policy.

Answer 15

A. A business interruption insurance policy.

Question 16

What cover, if any, is provided under a comprehensive private motor insurance policy for a caravan whilst it is attached to the insured vehicle?
A. No cover is provided.
B. Third party only.
C. Third party, fire and theft.
D. Comprehensive.

Answer 16

B. Third party only.

Question 17

What standard cover is provided under a third party only motorcycle insurance policy in respect of injury to the insured in the event of an accident?
A. Emergency treatment fees.
B. Loss of earnings.
C. Medical expenses.
D. Personal accident benefits

Answer 17

A. Emergency treatment fees.

Question 18

In what circumstances will a public liability insurance policy pay a claim for pollution of air, water or soil?
A. When a court finds that the cause of pollution was an act of God.
B. When pollution is caused by immediate discharge consequent upon an accident.
C. When the insured has paid the appropriate additional premium for pollution.
D. When the insured is legally liable for pollution clean-up costs.

Answer 18

B. When pollution is caused by immediate discharge consequent upon an accident.

Question 19

A shoe manufacturer’s products liability insurance policy is issued with a limit of indemnity of £1,000,000. There are three different products liability claims in the first period of insurance, one for £500,000, one for £750,000 and a final one for £1,100,000. What will the policy pay out in total for the three claims?
A. £1,000,000
B. £1,250,000
C. £2,250,000
D. £2,350,000

Answer 19

A. £1,000,000

Question 20

What type of insurance policy would provide cover for an accountant’s liability to compensate her clients for losses due to errors or omissions by her staff?
A. An employers’ liability insurance policy.
B. A money insurance policy.
C. A professional indemnity insurance policy.
D. A public liability insurance policy.

Answer 20

C. A professional indemnity insurance policy.

Question 21

Under a personal accident insurance policy, what is the maximum number of weeks for which temporary total disablement benefit is usually paid?
A. 26 weeks.
B. 52 weeks.
C. 104 weeks.
D. 156 weeks.

Answer 21

C. 104 weeks.

Question 22

What amount should the sum insured under the buildings section of a household insurance policy represent?
A. The cost of rebuilding the property.
B. The market value of the property.
C. The maximum likely cost of fire damage to the property.
D. The outstanding mortgage loan on the property.

Answer 22

A. The cost of rebuilding the property.

Question 23

The cancellation section of a travel insurance policy normally excludes claims in relation to
A. death of a close relative.
B. jury service.
C. permanent disablement.
D. pregnancy.

Answer 23

D. pregnancy.

Question 24

An insurance policy for a small business includes cover for fire, special perils, theft, business interruption, money and other types of insurance under a single contract. This policy is known as
A. an all risks insurance policy.
B. a collective insurance policy.
C. an open cover insurance policy.
D. a packaged insurance policy.

Answer 24

D. a packaged insurance policy.

Question 25

From where may an insured obtain free advice regarding the cover provided under his motor insurance policy?
A. The Chartered Insurance Institute.
B. The Financial Ombudsman Service.
C. The insurer’s telephone helpline.
D. The Motor Insurers’ Bureau.

Answer 25

C. The insurer’s telephone helpline.

Question 26

Authorised motor repairers are approved by the
A. Department for Business, Energy and Industrial Strategy.
B. Financial Conduct Authority.
C. insurer.
D. Motor Insurers’ Bureau.

Answer 26

C. insurer.

Question 27

Which type of personal insurance policy most commonly provides an uninsured loss recovery service?
A. A household insurance policy.
B. A private motor insurance policy.
C. A sickness insurance policy.
D. A travel insurance policy.

Answer 27

B. A private motor insurance policy.

Question 28

Under a typical legal expenses insurance policy, what limit of cover, if any, usually applies during the period of insurance?
A. Cover is unlimited.
B. Overall cover is limited, but there is no limit per claim.
C. Overall cover is limited and there is also a limit per claim.
D. Overall cover is unlimited, but there is a limit per claim.

Answer 28

D. Overall cover is unlimited, but there is a limit per claim.

Question 29

Under a travel insurance policy, cover for baggage will NOT generally include damage to
A. binoculars.
B. clothing.
C. contact lenses.
D. jewellery.

Answer 29

C. contact lenses.

Question 30

Under a household insurance policy, subsidence cover responds to damage caused by
A. faulty workmanship.
B. riverbank erosion.
C. settlement.
D. tree roots.

Answer 30

D. tree roots.

Question 31

What is the minimum limit of indemnity legally required under an employers’ liability insurance policy?
A. £1,000,000
B. £2,000,000
C. £5,000,000
D. £10,000,000

Answer 31

C. £5,000,000

Question 32

A basic feature of glass insurance is that it will exclude glass breakages caused by
A. fire, lightning or explosion.
B. impact by vehicles.
C. storm, tempest or flood.
D. theft or malicious damage.

Answer 32

A. fire, lightning or explosion.

Question 33

Who would take out an extended warranty insurance policy in respect of electrical goods?
A. The manufacturer.
B. The purchaser.
C. The repairer.
D. The retailer.

Answer 33

B. The purchaser.

Question 34

What cover must be included under a motor insurance policy to comply with the Road Traffic Act?
A. Death or injury to the insured driver only.
B. Death or injury to the insured driver, any passengers and any third parties.
C. Legal liability for death or injury to third parties.
D. Personal accident for any passengers.

Answer 34

C. Legal liability for death or injury to third parties.

Question 35

Owing to an accident resulting in injury to an arm, a hairdresser is unable to carry out any work for three months. What benefit will be provided under his personal accident insurance policy?
A. A capital sum for the partial loss of the use of a limb.
B. A capital sum for the total loss of the use of a limb.
C. A regular payment for temporary partial disablement.
D. A regular payment for temporary total disablement.

Answer 35

D. A regular payment for temporary total disablement.

Question 36

A woodwork company has a fire insurance policy containing a clause which requires the removal of any sawdust shavings from the premises at the end of each working day. Failure to do so may make any associated claim invalid. This is known as
A. an exclusion.
B. a franchise.
C. a representation.
D. a warranty.

Answer 36

D. a warranty.

Question 37

An insurance policy’s legal significance is as the
A. basis of the contract.
B. confirmation of cover.
C. contract itself.
D. evidence of the contract

Answer 37

D. evidence of the contract

Question 38

What is normally the main rating factor used when considering an application for personal accident insurance?
A. Geographical location.
B. Health.
C. Income.
D. Occupation.

Answer 38

D. Occupation.

Question 39

Why does an underwriter need to be aware of material circumstances when processing an application for insurance?
A. They can affect the terms on which the risk is accepted.
B. They can reduce the likelihood of subrogation.
C. They will dictate whether or not the contract is regulated by the Financial Conduct Authority.
D. They will indicate the legal status of the contract.

Answer 39

A. They can affect the terms on which the risk is accepted.

Question 40

An underwriter has identified a good physical hazard in relation to an insurance application. What impact will this tend to have on the likelihood and severity of loss?
A. An increase in both the likelihood and severity.
B. A decrease in both the likelihood and severity.
C. An increase in the likelihood, but a decrease in the severity.
D. A decrease in the likelihood, but an increase in the severity.

Answer 40

B. A decrease in both the likelihood and severity.

Question 41

The proposal form being completed by an applicant specifically asks for the details of anyone under the age of 25 who is to be covered by the insurance policy. What type of policy is this most likely to be?
A. A medical expenses insurance policy.
B. A motor insurance policy.
C. A personal accident insurance policy.
D. A travel insurance policy.

Answer 41

B. A motor insurance policy.

Question 42

Under which part of a property insurance policy will the insured perils be listed?
A. The conditions.
B. The exceptions.
C. The operative clause.
D. The recital clause.

Answer 42

C. The operative clause.

Question 43

By what means would an insurer normally collect the premium from an insured who is permitted to pay by instalments?
A. By banker’s draft.
B. By cash.
C. By direct debit.
D. By post-dated cheques.

Answer 43

C. By direct debit.

Question 44

Martin buys a car and asks an intermediary to arrange insurance. From what point does the insurance become effective?
A. When the intermediary submits the quotation.
B. From the time and date shown on the cover note issued by the intermediary.
C. When Martin receives the insurance policy document.
D. When the intermediary receives the full premium.

Answer 44

B. From the time and date shown on the cover note issued by the intermediary.

Question 45

A fire occurs at a factory one month after the insurance policy renewal date, but the renewal premium has NOT been paid. What is the legal position of the insurer in the event of a claim?
A. The insurer can reject the claim in its entirety.
B. The insurer must pay the claim, but with a deduction for the unpaid premium.
C. The insurer must pay the claim in full, unless a cancellation notice has been issued.
D. The insurer must delay settlement until the premium has been paid.

Answer 45

A. The insurer can reject the claim in its entirety.

Question 46

Which part of an insurance policy personalises the cover to the insured?
A. The heading.
B. The operative clause.
C. The recital clause.
D. The schedule.

Answer 46

D. The schedule.

Question 47

Under the standard fire insurance policy, the pro rata condition of average requires the sum insured, at the date of loss, to be what minimum percentage of the value at risk to obtain full settlement?
A. 70%
B. 80%
C. 90%
D. 100%

Answer 47

D. 100%

Question 48

When two insurance policies cover the same risk and they both contain a contribution condition, how would a claim usually be settled?
A. Only one policy would contribute the full amount.
B. Both policies would contribute a proportionate amount.
C. Both policies would contribute an equal amount.
D. Both policies would contribute the full amount.

Answer 48

B. Both policies would contribute a proportionate amount.

Question 49

An insured has a household insurance policy with an excess of £100 in respect of each claim. If a valid claim for £450 is submitted, what maximum amount would the insured receive in settlement?
A. £100
B. £350
C. £450
D. £550

Answer 49

B. £350

Question 50

A franchise under an insurance policy means that the
A. insured always pays an agreed amount towards a claim.
B. insured never has to contribute towards a claim.
C. insurer pays the full value of any claim which exceeds a specified amount.
D. insurer pays the full value of any claim which falls below a specified amount.

Answer 50

C. insurer pays the full value of any claim which exceeds a specified amount.

Question 51

What is always the consequence of a proposer failing to inform an underwriter of material circumstances relating to a proposed industrial risk?
A. A claim cannot be made against the insurance policy.
B. The insurer’s liability is limited to third parties.
C. The premium is set at a higher level.
D. The risk is not accurately assessed.

Answer 51

D. The risk is not accurately assessed.

Question 52

A proposal form is normally used by an underwriter as a means of obtaining material information because it
A. is a regulatory requirement.
B. is convenient and cost-effective.
C. prevents misrepresentation by the proposer.
D. provides evidence of a contract.

Answer 52

B. is convenient and cost-effective.

Question 53

Which peril is always excluded under a commercial fire and special perils insurance policy as a market exclusion?
A. Earthquake.
B. Flood.
C. Riot.
D. War.

Answer 53

D. War.

Question 54

An insurer usually grants a limited grace period in order to give an insurance policyholder time to
A. cancel the policy without penalty.
B. notify the insurer of a claim.
C. notify the insurer of a complaint.
D. pay the policy renewal premium.

Answer 54

D. pay the policy renewal premium.

Question 55

What is the rate of Insurance Premium Tax on a private motor insurance policy?
A. 6%
B. 12%
C. 17.5%
D. 20%

Answer 55

B. 12%

Question 56

Under the cancellation clause of a personal insurance policy, what postal method does the insurer usually use to advise the insured that the policy is cancelled?
A. A couriered letter to the insured’s intermediary.
B. A couriered letter to the insured’s last known address.
C. A recorded delivery letter to the insured’s intermediary.
D. A recorded delivery letter to the insured’s last known address.

Answer 56

D. A recorded delivery letter to the insured’s last known address.

Question 57

Under a cancellation clause, when may an insurer cancel an insurance policy?
A. At inception of the policy only.
B. At renewal of the policy only.
C. At any time during the period of the policy.
D. Only after a claim has occurred under the policy.

Answer 57

C. At any time during the period of the policy.

Question 58

How is the likelihood of a loss occurring usually affected by the existence of a poor physical hazard?
A. It always remains constant.
B. It may remain constant or increase.
C. It may remain constant or decrease.
D. It may increase or decrease.

Answer 58

B. It may remain constant or increase.

Question 59

An insurer mistakenly quotes a premium of £500 instead of £5,000. The quotation has NOT yet been accepted. What option, if any, is available to the insurer to rectify its mistake?
A. The insurer is bound by the quotation.
B. Send the proposer a second quotation with the correct premium stated.
C. Vary the level of cover to suit the misquoted premium.
D. Vary the period of cover to suit the misquoted premium.

Answer 59

B. Send the proposer a second quotation with the correct premium stated.

Question 60

What personal information about the proposer, other than name and address, is required on a commercial fire insurance proposal form?
A. Age.
B. Marital status.
C. Nationality.
D. Occupation.

Answer 60

D. Occupation.

Question 61

A theft insurance policy has a £50,000 franchise. If a valid claim of £55,000 is made, how much, if anything, will the insurer pay?
A. Nothing.
B. £5,000
C. £50,000
D. £55,000

Answer 61

D. £55,000

Question 62

A direct motor insurer asks a proposer questions over the telephone and prepares a statement of fact based on the proposer’s responses. What is the next stage in processing this proposal?
A. The insurer draws up an insurance policy which is sent to the proposer for consideration.
B. The insurer issues a certificate pending receipt of the premium.
C. The insurer issues a cover note pending receipt of the premium.
D. The statement of fact is sent to the proposer to check.

Answer 62

D. The statement of fact is sent to the proposer to check.

Question 63

John purchases a motor insurance policy and asks the insurer NOT to send him a policy document as he understands the extent of cover. Why would the insurer send him a policy document anyway?
A. John cannot make a claim under the policy without the policy document.
B. The insurer is legally obliged to issue the policy document within 60 days of inception.
C. The policy is evidence of the contract and it must be sent to meet contract certainty regulations.
D. The policy document must be issued before the premium is legally payable.

Answer 63

C. The policy is evidence of the contract and it must be sent to meet contract certainty regulations.

Question 64

A customer requests an insurance quotation and indicates a wish to accept it. At what point is the contract made?
A. When the customer agrees to pay the premium.
B. When the customer pays the premium.
C. When the policy document is issued by the insurer.
D. When the policy document is received by the customer.

Answer 64

A. When the customer agrees to pay the premium.

Question 65

What type of fact, if fraudulently omitted by the proposer when completing a public liability form, might allow the insurer to avoid the insurance policy?
A. A fact of common knowledge.
B. A fact of law.
C. A fact which lessens the risk.
D. A material fact.

Answer 65

D. A material fact.

Question 66

A public liability insurance policy contains a condition precedent to liability concerning the precautions to be taken when using cutting torches. In the event of a claim for damage arising from the use of cutting torches and the insured has specifically failed to comply with this condition, the insurer will normally
A. cancel the policy.
B. offer part payment of the claim.
C. refuse to settle the claim.
D. settle the claim and sue the insured for recovery.

Answer 66

C. refuse to settle the claim.

Question 67

The sum insured under a buildings insurance policy is £70,000. A rate of £0.30% applies and a 10% discount is allowed. What is the premium excluding Insurance Premium Tax?
A. £63
B. £189
C. £210
D. £231

Answer 67

B. £189

Question 68

What is the premium before Insurance Premium Tax for a products liability insurance policy rated at £1 per mille on a turnover of £5,000,000?
A. £50
B. £500
C. £5,000
D. £50,000

Answer 68

C. £5,000

Question 69

When considering a motor claim settlement, salvage is the
A. actual cost of repairing a vehicle beyond economic repair.
B. actual vehicle remnants following a total loss claim.
C. amount paid in settlement of a claim.
D. destruction of a vehicle following a claim.

Answer 69

B. actual vehicle remnants following a total loss claim.

Question 70

A consumer used the services of an intermediary to effect a household insurance policy. In the event of a claim, who is legally responsible for proving the amount of the loss?
A. The consumer in all cases.
B. The insurer in all cases.
C. The intermediary in all cases.
D. The intermediary if independent, otherwise the customer.

Answer 70

A. The consumer in all cases.

Question 71

What settlement method would normally be used for a valid claim under a business interruption insurance policy?
A. Payment for repairs.
B. Payment of money.
C. Reinstatement.
D. Replacement.

Answer 71

B. Payment of money.

Question 72

When a motor insurer takes advantage of contribution rights, from whom can some of its claims settlement costs be recovered?
A. Another insurer.
B. A negligent third party.
C. The Motor Insurers’ Bureau.
D. The policyholder.

Answer 72

A. Another insurer.

Question 73

A specialist motor insurer has recently experienced a high level of fraudulent claims. Which of its policyholders could suffer as a result of this fraud?
A. All policyholders.
B. New policyholders only.
C. Policyholders who pay by instalments only.
D. Policyholders with a significant no claims discount only.

Answer 73

A. All policyholders.

Question 74

Application of the arbitration clause might occur under a fire insurance policy as a result of a dispute between the insurer and the insured regarding the
A. amount of a claim.
B. amount of the premium.
C. policy cover.
D. policy renewal terms.

Answer 74

A. amount of a claim.

Question 75

Vanessa insures the contents of her house under a typical household contents insurance policy with a £250 excess, but fails to advise her insurer that she takes in lodgers. She discovers that some jewellery valued at £1,000 is missing and there is no evidence of a forced entry. What maximum payment, if any, is her insurer obliged to make?
A. Nil.
B. £250
C. £750
D. £1,000

Answer 75

A. Nil.

Question 76

An insured is subject to implied duties when
A. amending an insurance policy.
B. proposing an insurance policy.
C. renewing an insurance policy.
D. submitting a claim under an insurance policy.

Answer 76

D. submitting a claim under an insurance policy.

Question 77

In the event of a valid claim under a personal accident and sickness insurance policy, what documentary evidence will an insurer always require in addition to a claim form?
A. A doctor’s certificate to confirm the nature and duration of the claimant’s disability.
B. A letter from the claimant’s employer to confirm that he has been absent from work.
C. The policy document or renewal confirmation to confirm that cover exists.
D. A statement of earnings to confirm the amount earned by the claimant during the past year.

Answer 77

A. A doctor’s certificate to confirm the nature and duration of the claimant’s disability.

Question 78

A motorist suffers damage to his comprehensively insured vehicle and takes it to a repairer with whom the insurer has direct billing arrangements. The insurance policy has a £100 excess. Assuming the claim is valid, how is the claim likely to be settled?
A. The insurer pays the repairer in full, reclaiming the excess from the insured.
B. The insured pays the repairer in full, reclaiming the costs less the excess from the insurer.
C. The insured pays the excess to the repairer and the insurer then pays the balance to the repairer.
D. The insured pays the excess to the insurer and the insurer then pays the full amount to the
repairer.

Answer 78

C. The insured pays the excess to the repairer and the insurer then pays the balance to the repairer.

Question 79

Which organisation will settle a claim from a pedestrian injured by an uninsured motorist?
A. The Association of British Insurers.
B. The British Insurance Brokers’ Association.
C. The Financial Conduct Authority.
D. The Motor Insurers’ Bureau.

Answer 79

D. The Motor Insurers’ Bureau.

Question 80

Under the standard fire policy, in order for a claim to be accepted it is essential that the damage is caused by
A. the actions of a third party.
B. a fire.
C. an inevitable event.
D. a named peril.

Answer 80

D. a named peril.

Question 81

Upon becoming aware that a fraudulent claim has been made, what is the earliest point from which an insurer may terminate the insurance policy?
A. From inception of the policy.
B. From the date of the fraudulent act.
C. From the date of discovery of the fraud.
D. From the next renewal date of the policy.

Answer 81

A. From inception of the policy.

Question 82

When is an amount initially reserved in the claims process?
A. At inception of the insurance policy.
B. At the time the claim is notified.
C. At the time the claim is settled.
D. At the time average is applied.

Answer 82

B. At the time the claim is notified.

Question 83

Why would an insurer register claim details on MIAFTR2?
A. To allow claim payments to be made by electronic transfer.
B. To check claim information against details provided on the proposal form.
C. To enable intermediaries to access information electronically.
D. To help prevent fraud.

Answer 83

D. To help prevent fraud.

Question 84

Which insurance policy condition can an insurer invoke to recover all of its outlay in respect of a claim?
A. Arbitration.
B. Average.
C. Contribution.
D. Subrogation.

Answer 84

D. Subrogation.

Question 85

The purpose of the Claims and Underwriting Exchange is to
A. decide which party is liable for a claim.
B. help detect fraudulent claims.
C. pursue recovery of uninsured losses.
D. set premium rates.

Answer 85

B. help detect fraudulent claims.

Question 86

Under an employers’ liability insurance policy, delays often occur between a claim being notified and final settlement. To ensure adequate funds are available to ultimately pay the claim, an insurer will rely on correct
A. excesses.
B. rates.
C. reserving.
D. wages declarations.

Answer 86

C. reserving.

Question 87

An insurer can usually terminate an insurance policy without refunding premiums if the policyholder
A. arranges identical cover elsewhere.
B. becomes insolvent.
C. loses insurable interest.
D. makes a fraudulent claim.

Answer 87

D. makes a fraudulent claim.

Question 88

A commercial fire insurance policy contains a condition requiring the insured to provide proof of loss. In the event of a fire giving rise to damage, the insured must supply the insurer with
A. a brief description of the damaged property.
B. full information relating to the damaged property.
C. a statement from the fire brigade about the cause of the fire.
D. a supplier’s estimate of the cost to replace the damaged property.

Answer 88

B. full information relating to the damaged property.

Question 89

Mediation and conciliation are methods of
A. alternative dispute resolution.
B. assessing indemnity limits.
C. fraud detection.
D. reserving.

Answer 89

A. alternative dispute resolution.

Question 90

John’s car is involved in an accident and declared to be beyond economic repair. He has a comprehensive insurance policy with no excess and his insurer assesses the pre-accident value of the car to be £1,000. The insurer estimates the salvage could be sold for £100, but John asks to keep the car. How much will the insurer offer to settle the claim?
A. £100
B. £900
C. £1,000
D. £1,100

Answer 90

B. £900

Question 91

Colin has a comprehensive motor insurance policy allowing any driver to use his car. Joan, who has the same level of cover and a driving other cars extension, borrows Colin’s car and injures a third party whilst driving. How will the subsequent claim from the third party be dealt with?
A. Both insurers will share the cost of the claim equally.
B. Colin’s insurer will pay in full.
C. Joan’s insurer will pay for the injury claim and Colin’s insurer will pay for the damage claim.
D. Joan’s insurer will pay in full.

Answer 91

B. Colin’s insurer will pay in full.

Question 92

A workshop is insured for £40,000 under a fire insurance policy subject to the pro rata condition of average. A fire occurs causing £10,000 of damage and at the time of the fire the full rebuilding cost is assessed at £50,000. What amount, if any, is payable by the insurer?
A. Nil.
B. £2,000
C. £8,000
D. £10,000

Answer 92

C. £8,000

Question 93

Gary would like to have a copy of all the records held on computer and paper by his insurer concerning his motor insurance policy and its associated claims. Under the General Data Protection Regulation, what are Gary’s rights, if any?
A. He has no right to have a copy of any records held.
B. He only has the right to have a copy of any computer records held.
C. He only has the right to have a copy of any paper records held.
D. He has the right to have a copy of both computer and paper records held.

Answer 93

D. He has the right to have a copy of both computer and paper records held.

Question 94

A high street intermediary has installed a new router into its computer system. What is the main purpose of this device?
A. To create a daily backup of data.
B. To expand the system’s memory capacity.
C. To manage the flow of electronic traffic.
D. To protect the system from viruses.

Answer 94

C. To manage the flow of electronic traffic.

Question 95

It is prudent for a company to house a backup copy of important computer data to protect the data from being
A. accessed by an unauthorised third party.
B. copied by an industrial spy.
C. lost due to a disastrous event such as a fire.
D. stolen by a competitor.

Answer 95

C. lost due to a disastrous event such as a fire.

Question 96

What is the main reason for which an employee must enter a password before using a company computer?
A. To ensure that any documents printed will include employee details.
B. To prevent open access to confidential information.
C. To register the time that the employee signed in.
D. To run a report showing the amount of work input.

Answer 96

B. To prevent open access to confidential information.

Question 97

Which type of computer-held data is regulated under the General Data Protection Regulation?
A. All data.
B. Corporate data only.
C. Personal data only.
D. Public data only.

Answer 97

C. Personal data only.

Question 98

What major benefit is a customer most likely to derive from an insurer which has instigated a quality customer service policy?
A. Enhanced claim payments.
B. Faster claim settlements.
C. Longer policy terms.
D. Wider cover.

Answer 98

B. Faster claim settlements.

Question 99

Which body imposes regulations which require claims to be handled promptly and fairly?
A. Association of British Insurers.
B. Chartered Insurance Institute.
C. Consumers’ Association.
D. Financial Conduct Authority.

Answer 99

D. Financial Conduct Authority.

Question 100

When an insurer implements a service standard, this will usually be aimed at
A. all staff.
B. claims handlers only.
C. customer-facing staff only.
D. underwriters only.

Answer 100

A. all staff.