IF2Set1010118v1 Flashcards
For practical purposes, the minimum level of motor insurance cover usually offered by insurers is: A. third party, fire and theft B. third party only C. Road Traffic Act only D. comprehensive
B. third party only
Which EU Motor Insurance Directive states that all policies must cover liability to persons in the employment of the insured when travelling as passengers in the course of employment, but not the driver? A. First B. Second C. Third D. Fourth
C. Third
Which of these is usually excluded from a third party only policy?
A. Damage to the insured’s vehicle
B. Damage to the third-party vehicle
C. Legal costs for defending a claim
D. Cover for vehicles whilst not on a road or public place but within territorial limits
A. Damage to the insured’s vehicle
Marianne has taken out a comprehensive motor insurance policy. Which of these covers will usually be included? A. Malicious damage B. Punctures C. Wear and tear and depreciation D. Mechanical failure
A. Malicious damage
Under a motor policy, a no claim discount will usually be unaffected by a claim for: A. personal belongings B. breakage of glass C. third party property damage D. attempted theft
B. breakage of glass
Which of these is usually an optional extension to a comprehensive motor insurance policy?
A. Personal belongings and clothing to £250
B. Malicious damage
C. Young additional drivers
D. Medical expenses for the insured or a passenger to £200
C. Young additional drivers
Items carried by a commercial vehicle are usually covered by: A. loading insurance B. commercial motor insurance C. goods in transit insurance D. product liability insurance
C. goods in transit insurance
Sue would like to take out a cover that would enable her to seek treatment outside of the NHS in the event of her needing it. Which kind of insurance should she take out? A. Life assurance B. Sickness insurance C. Medical expenses insurance D. Personal accident insurance
C. Medical expenses insurance
How many rating classes do personal accident insurers have for calculating premiums, based on a proposer's occupation? A. One B. Two C. Three D. Four
D. Four
Janine has taken out a personal accident and sickness policy. In order for a valid death claim to be made under this type of policy, within how many months of the event giving rise to the claim must her death usually have occurred? A. 3 months B. 6 months C. 12 months D. 24 months
C. 12 months
Under the accident section of a personal accident policy, if the insured is temporarily totally disabled, what is the maximum length of time the weekly benefit will usually pay out for? A. 13 weeks B. 26 weeks C. 52 weeks D. 104 weeks
D. 104 weeks
How many days is the usual time franchise under the sickness section of personal accident insurance? A. 5 days B. 7 days C. 10 days D. 14 days
B. 7 days
Which of the following benefits from a personal accident and sickness policy would usually be paid out as an income rather than a capital lump sum? A. Sickness B. Death C. Loss of sight D. Loss of limbs
A. Sickness
Which of the following statements relating to the limitations of a personal accident and sickness policy is TRUE?
A. The most common age range for accident cover is 18 – 70
B. Cover for sickness is usually worldwide, whereas accident cover is usually restricted to geographical limits
C. The level of benefits provided for children is the same as for adults
D. Pregnancy and childbirth is typically excluded
D. Pregnancy and childbirth is typically excluded
As a person gets older, premiums for medical expenses insurance usually: A. vary according to claims made B. increase C. remain static D. decrease
B. increase
What is the correct term for a policy that brings together several different types of cover in a single document? A. A parcel policy B. A group policy C. A package policy D. A public policy
C. A package policy
What is the most common option for settlement of a household insurance claim where the item is irreparable? A. New for old B. Indemnity C. Market value D. Second-hand value
A. New for old
What is another name for 'market value', where a household insurer offers an amount to replace a damaged item with another of a similar condition or age? A. Liability B. Indemnity C. Reinstatement D. Manifestation
B. Indemnity
A typical policy condition of a household Insurance policy is that some covers will not apply if a property is: A. unoccupied for 30 or 60 days B. damaged by lightning C. hit by an aeroplane D. flooded due to burst pipes
A. unoccupied for 30 or 60 days
Damage to a television aerial itself under a household policy is:
A. covered under the buildings section
B. covered under the contents section
C. excluded from cover due to their fragile nature
D. covered only if the roof is damaged at the same time
B. covered under the contents section
Loss of rent cover usually includes the cost of alternative but similar accommodation at which level? A. 10-15% of the buildings sum insured B. 20-30% of the buildings sum insured C. 30-40% of the buildings sum insured D. 50-60% of the buildings sum insured
A. 10-15% of the buildings sum insured
What is the usual limit of liability for incurred costs and expenses under household legal expenses cover? A. £50,000 B. £100,000 C. £150,000 D. £200,000
A. £50,000
The loss of deposits section of a travel insurance policy usually excludes: A. death of a close relative B. disinclination to travel C. unforeseen accumulation of work D. a fire at the insured's home address
B. disinclination to travel
A common exclusion under the business ‘all risks’ extension to a trader's package policy is: A. pilferage and shoplifting B. trade equipment C. fixtures and fittings D. accidental loss or damage
A. pilferage and shoplifting
What can be added to a basic fire policy to enhance the nature of cover provided? A. Standard perils B. Special perils C. Extra perils D. ‘All risks’ perils
B. Special perils
Which of these covers is included in a standard fire policy?
A. Earthquake or subterranean fire
B. Explosion resulting from fire
C. Spontaneous fermentation of the insured property
D. Fire damage to an adjacent property following spontaneous fermentation
D. Fire damage to an adjacent property following spontaneous fermentation
Riot, civil commotion, strikers, locked-out workers, persons taking part in labour disturbances and malicious persons are examples of what type of peril? A. Miscellaneous B. Chemical C. Nature D. Social
D. Social
Which of these is a standard exclusion incorporated in all material damage insurances? Damage caused by: A. the crashing of a satellite B. pressure waves from sonic bangs C. the crashing of an aircraft D. articles dropped from an aircraft
B. pressure waves from sonic bangs
One of Mark’s horses knocks down a fence on his property. This would:
A. be covered if he added special perils to his household policy at outset
B. be covered only if he requested ‘own impact cover’ on his household policy at outset
C. not be covered because impact by own animal is a general exclusion to all household policies
D. be covered by the standard perils of his household policy
B. be covered only if he requested ‘own impact cover’ on his household policy at outset
Which of these is specifically excluded under the special peril of sprinkler leakage which covers the accidental escape of water?
A. Explosion, earthquake, subterranean fire
B. A mechanical defect in the installation
C. Damage to sprinkler head by impact
D. Freezing of water followed by pipes bursting
A. Explosion, earthquake, subterranean fire
Which of the following can be described as: "ground which has low moisture content suddenly taking in moisture and swelling": A. Subsidence B. Landslide C. Landslip D. Ground heave
D. Ground heave
Which of the following is an example of a gradually operating exclusion that would typically be found in an ‘all risks’ policy? A. Terrorism B. Corrosion C. Consequential loss D. Nuclear assemblies
B. Corrosion
Which of the following is an example of a standard market exclusion for an ‘all risks’ policy?
A. Wind or rain damage to moveable property in the open
B. Damage caused by a change in temperature
C. Damage caused by pollution or contamination
D. Malicious damage to empty buildings
C. Damage caused by pollution or contamination
Most commercial theft insurance policies:
A. relate to buildings
B. do not distinguish between different types of stock
C. state that the theft must involve the use of force or violence to the property
D. use the definition of theft as given in the Theft Act 1968
C. state that the theft must involve the use of force or violence to the property
Derren takes out a theft policy to cover his high street store. Which of the following would typically be a specific limitation of his policy? A. Robbery and aggravated burglary B. Replacement of locks C. Breakage of glass D. Cash and bank notes
D. Cash and bank notes
Which of the following can be added to a standard money policy by means of an optional extension? A. Postage stamps B. Cash C. Credit cards D. Cheques
C. Credit cards
Cover under legal expenses insurance is usually limited to an amount per: A. claim B. policy period C. type of claim D. month
A. claim
Crazy Marketing would like to buy a policy that provides them with cover for legal costs in the event of an employee taking action against them for unfair dismissal. What kind of policy should they take out? A. Professional indemnity B. Commercial legal protection C. Group legal benefit D. Litigation insurance
B. Commercial legal protection
Which of these is a cover typically available under a standard commercial legal protection policy? A. Employment cover B. Personal cover C. Conveyancing cover D. Libel and slander cover
A. Employment cover
Gerald runs a small factory, which manufactures printer components. He wants to ensure that if his factory is damaged and is out of commission for a while that the resultant loss of earnings and additional expenses incurred are covered. What is the name currently given to the policy that can provide this insurance? A. Time loss B. Consequential loss C. Business interruption D. Loss of profits
C. Business interruption
An example of a fixed charge is: A. rent B. raw materials C. delivery charges D. packaging
A. rent
Which of these is a typical example of an uninsured working expense? A. Fixed charges B. Staff wages C. Variable charges D. Rent
C. Variable charges
How does a “declaration linked” policy fix the sum insured in a business interruption policy? By requiring the policyholder to:
A. estimate figures for the coming year
B. provide details of turnover for the previous year
C. provide details of turnover for the previous three years
D. estimate figures for the next three years
A. estimate figures for the coming year
What do the six special perils under a business interruption policy relate to? A. Engineering B. Service industries C. Natural disasters D. Operational error
A. Engineering
Jerome runs a small bakery. He has two full-time workers and one part-time worker. Which of the following insurances is it compulsory for him to purchase? A. Public liability B. Employers’ liability C. Product liability D. Professional indemnity
B. Employers’ liability
Which of the following statements relating to the limitations of an employers’ liability policy is TRUE?
A. There are many standard exclusions
B. There is a standard war risk exclusion
C. Cover may be limited by the underwriter
D. Most exclusions are permitted by law
C. Cover may be limited by the underwriter
An employer is liable to employees for injury or damage caused by their co- employees. This is called: A. public liability B. co-worker liability C. employee liability D. vicarious liability
D. vicarious liability
Public liability insurance can be thought of as an: A. open policy B. closed policy C. specific policy D. compulsory policy
A. open policy
Which of these is a limitation on a public liability policy? A. Injury to persons B. Consequential loss C. Contractual liability D. Damage to property
C. Contractual liability
What is the basis of cover in a directors’ and officers' liability policy? A. Claims made B. Claims occurring C. Manifestation D. Claims accepted
A. Claims made
Pension funds trustees insurance excludes?
A. Risk of personal liability for trustees, for the commission of a wrongful act
B. Theft of fund assets
C. Loss of documents
D. Failure of the employer to collect contributions
D. Failure of the employer to collect contributions
Which of the following statements regarding the provision of a 24-hour helpline is TRUE?
A. The cost is added to the standard premium
B. It can minimise claims costs
C. Legal advice is rarely offered
D. The insurer will pay any costs that arise out of an incoming call
B. It can minimise claims costs
Which of these is primarily an advantage to the insurer, as opposed to the insured, of having an approved repairer scheme?
A. No requirement to obtain estimates
B. Collection and delivery of vehicle
C. Potential discount on parts and labour
D. Provision of a loan car
C. Potential discount on parts and labour
In the context of risk management, what is an EML? A. Estimated maximum loss B. Excess material loss C. Estimated material loss D. Exposed maximum loss
A. Estimated maximum loss
Which of these contained in a surveyor's report might lead to a reduction in premium if acted upon? A. Risk arrangements B. Risk recommendations C. Risk requirements D. Risk identifications
B. Risk recommendations
Adequacy of staff training and staff relations are examples of an employers’ liability risk which can be described as: A. physical hazard B. moral hazard C. physical peril D. moral peril
B. moral hazard
Which of these is an area for recommendation that an insurer will look at in relation to products liability insurance? A. Defensive driving courses B. Labelling for clarity C. Method of transit D. Adequacy of training
B. Labelling for clarity
On what basis do accident management companies pursue uninsured losses?
A. Where the client has admitted liability
B. Where there is a reasonable chance of recovery
C. Where the client is blameless
D. Where the client has no previous claims
C. Where the client is blameless
Apart from considering whether or not to accept a risk, material facts also allow a prudent insurer to:
A. confirm the relevant physical or moral hazards applicable
B. identify the target audience for the policy
C. ascertain which cover to sell
D. determine the rate of premium to charge
D. determine the rate of premium to charge
Which of these is an example of a moral hazard?
A. The proposer’s occupation
B. The insured’s personal attitude and conduct
C. The construction of a building
D. The age of a proposer for a car insurance policy
B. The insured’s personal attitude and conduct
A proposer's address is a significant rating factor in: A. motor insurance B. personal accident insurance C. travel insurance D. income protection insurance
A. motor insurance
How does the London market usually obtain information about a proposed risk? A. Supplementary questionnaires B. Market reform contract C. Interviews D. Internet search
B. Market reform contract
Contract certainty is the complete and final agreement of terms between the insurer and the insured:
A. before policy completion
B. by the time they enter into the contract
C. by the time the policy is issued
D. by the end of the contract
B. by the time they enter into the contract
What are introducer appointed representatives only involved in? A. Performance of insurance contracts B. Placing and negotiation C. Non-real-time promotions D. Real time promotions
C. Non-real-time promotions
Under which body’s jurisdiction do the processes of acquiring information, providing a quotation in response to an insurance enquiry and the subsequent negotiations leading to the final issue of policy documentation come under? A. The FPC B. The ABI C. The PRA D. The FCA
D. The FCA
The information about an intermediary and its services which must be provided prior to the conclusion of a contract is most likely to be included in: A. a Key Features Document B. a Service Level Agreement C. a Statement of Demands and Needs D. an Initial Disclosure Document
D. an Initial Disclosure Document
Which of the following products has been subject to a significant number of consumer complaints relating to ineligibility to claim benefit? A. Payment protection insurance B. Legal expenses cover C. Medical expenses insurance D. Personal accident and sickness cover
A. Payment protection insurance
An underwriter is asked to rate a yacht with a sum insured of £100,000. The rate per cent is 6%. What will the premium before insurance premium tax be? A. £600 B. £660 C. £6,000 D. £6,600
C. £6,000
A premium rate set at a price in pounds for each hundred pounds of sum insured is called a: A. rate per mile B. rate per mille C. flat rate D. rate per cent
D. rate per cent
If an insurer cannot determine an exact figure for a premium base at the beginning of a period of insurance they will often offer the proposer: A. an additional premium B. an adjustable premium C. a base premium D. a flat premium
B. an adjustable premium
Under which element of an insurance policy would you find the name of the insurer and, in some cases, the address and company logo? A. Heading B. Recital clause C. Operative clauses D. Policy schedule
A. Heading
What is the particular name given to a policy condition that exists whether or not it is written in the policy? A. Legal condition B. Express condition C. Implied condition D. Stated condition
C. Implied condition
What is the specific term given to exclusions that are common to all general insurance policies? A. Market exclusions B. Specific exclusions C. Industry exclusions D. General exclusions
A. Market exclusions
Which condition allows an insurer to reduce a claims payment in proportion to any under insurance? A. Contribution B. Subrogation C. Average D. Arbitration
C. Average
A very large excess is called: A. A franchise B. A deductible C. A super excess D. A contribution
B. A deductible
Which of the following statements regarding warranties is true?
A. They are used to define the boundaries of policy cover
B. They do not appear in the policy itself
C. They give the insurer the right to avoid the policy for any breach
D. They must be strictly and literally complied with
D. They must be strictly and literally complied with
Insurable interest is a: A. continuing condition precedent B. condition precedent to the contract C. condition precedent to liability D. condition subject to liability
B. condition precedent to the contract
Implied warranties are only found in which type of insurance? A. Travel B. Commercial C. Motor D. Marine
D. Marine
Whose responsibility is it to prove that an insured has a valid claim?
A. The insurer’s underwriter
B. The insured
C. The insurer’s claims personnel
D. The broker who sold the policy to the insured
B. The insured
In the event of a claim an insurer must prove:
A. the amount of the loss
B. the value of the loss is reasonable
C. that the insured has suffered a loss
D. that the insured has suffered a financial loss
B. the value of the loss is reasonable
Which of these is an implied duty of the insured in relation to a loss?
A. Prompt notification to the insurer
B. To act as though uninsured
C. To comply with all claims conditions
D. To provide proof and details of loss in writing within a certain timescale
B. To act as though uninsured
For which type of insurance is an accident report form rather than a claim form issued by the insurer? A. Motor B. Employers’ liability C. Personal accident D. Medical expenses
A. Motor
The claims condition that allows an insurer to call on another insurer, who covers the same risk, to share in the claim payment, is called: A. arbitration B. average C. contribution D. subrogation
C. contribution
Mr Peters has insured his household contents for £5,000. He suffers a fire and calculates that his possessions were actually worth £10,000 and he has lost £8,000 of his possessions. If his policy has an average condition, how much would his insurer pay in a claim settlement? A. £4,000 B. £5,000 C. £8,000 D. £10,000
A. £4,000
Which form of alternative dispute resolution means that the parties are bound by the recommendations of the facilitator and cannot usually use the court system afterwards? A. Arbitration B. Mediation C. Conciliation D. Alteration
C. Conciliation
What is the maximum amount of damages that can be awarded under the uninsured drivers agreement for third party property damage? A. £250,000 B. £500,000 C. £1,000,000 D. £1,200,000
D. £1,200,000
Who has the “right of recovery” to stolen goods which have been the subject of an insurance claim?
A. The police
B. The ABI Crime and Fraud Prevention Bureau
C. The policyholder
D. The insurer
D. The insurer
Which of these is an example of corporate data? A. Information accessible in a library B. Payments made to employees C. Information available online D. A person's insurance history
B. Payments made to employees
Which of the following highlights a potential weakness in data security? A. Secure storage and file disposal B. Open access to computer systems C. Document retention procedures D. File saving and back-up
B. Open access to computer systems
Personal data, as opposed to corporate data, must be particularly protected against: A. malicious alteration B. deliberate destructive acts C. being used for blackmail D. industrial espionage
C. being used for blackmail
Which of these is the key growth platform for personal general insurance distribution? A. The internet B. Telesales C. SMS texting D. TV advertising
A. The internet
“It is a website search utility which enables a client to gain several quotes via an electronic form.” What does this describe? A. An e-slip B. An aggregator C. A search engine optimisation tool D. A data management system
B. An aggregator
Which of these describes telematics?
A. Technology that analyses the claims data of motor insurance policies
B. Actuarial analysis of claims data
C. Technology that captures data on how a car is driven
D. Technology that reduces motor insurers’ exposure to claims
C. Technology that captures data on how a car is driven
Web browsers are examples of what? A. Aggregators B. Social media C. Computer hardware D. Applications (Apps)
D. Applications (Apps)
Who are the internal customers of an insurance company? A. Third party administrators B. The company's employees C. Brokers and intermediaries D. The company’s shareholders
B. The company’s employees
A way of making standards of customer service quantifiable is: A. telephone networks B. codes of conduct C. salary penalties D. customer incentives
B. codes of conduct
The three key areas driving the increasing importance of customer service are:
A. customer expectations, competition and the internet
B. cost, consumer awareness and customer expectations
C. consumer awareness, customer expectations and competition
D. competition, customer expectations and legislation
C. consumer awareness, customer expectations and competition
‘A firm must pay due regard to the interests of its customers and treat them fairly.’ What does this most accurately describe?
A. The ABI Code of Practice for Intermediaries
B. FCA Principle 6
C. The CII Code of Ethics
D. Industry best practice
B. FCA Principle 6
What is considered to be a guide for the ICOBS rule that claims should be handled promptly?
A. Claims should be handled within 5 business days of receipt, although it may be less because of the type of claim
B. Claims should be handled immediately
C. Claims should be handled in the month of receipt of claims notification
D. Claims should be handled within 5 business days of receipt, notwithstanding policy type
A. Claims should be handled within 5 business days of receipt, although it may be less because of the type of claim
“It is a minimum level of service quality and quantity that a customer service system must reach in order to meet its customer service objectives.” What are we describing here? A. A performance standard B. A claims-handling objective C. A customer expectation D. A customer service policy
A. A performance standard
