IF2Set2010118V2 Flashcards
Under the Road Traffic Act 1988, how much cover must be provided by a motor insurance policy for bodily injury to third parties? A. £1.2 million B. £5 million C. £10 million D. An unlimited amount
D. An unlimited amount
If a vehicle is being driven in another EU country, what is the minimum cover required by the Third EU Motor Insurance Directive?
A. The minimum required by the country visited
B. The lower of the amounts required by the country visited or the country where the vehicle is usually kept
C. The minimum required by the country where the vehicle is usually kept
D. The greater of the amounts required by the country visited or the country where the vehicle is usually kept
D. The greater of the amounts required by the country visited or the country where the vehicle is usually kept
A third-party, fire and theft policy usually excludes cover of which of these perils in relation to the insured's vehicle? A. Explosion B. Lightning C. Fire D. Loss of use
D. Loss of use
Peter buys comprehensive motor insurance cover and wants to drive his brother’s car. What will usually be covered by his own policy if he has an accident while driving his brother’s car involving a third party?
A. Damage to the third-party vehicle only
B. Damage to the third-party vehicle and Peter’s brother’s vehicle
C. Damage to Peter’s brother’s car only
D. There would be no cover at all
A. Damage to the third-party vehicle only
Mike is worried about not having a car to use if his vehicle is off the road due to an accident. What optional extension should he purchase? A. Breakdown cover B. Election cover C. Loss of use D. Additional driver cover
C. Loss of use
Standard policy cover for motorcycle insurance typically excludes: A. personal accident benefit B. third party bodily injury C. theft of the motorbike D. third party property damage
A. personal accident benefit
Which of the following policies is likely to have the lowest limit of indemnity for third party property damage? A. Commercial motor B. Private motor C. Private motorbikes D. Commercial haulage
D. Commercial haulage
The Bespoke Sign Makers Company would like to provide an insurance cover which would give members of staff a lump sum benefit in the event of serious bodily injury. Which kind of insurance should they take out? A. Sickness insurance B. Public liability C. Personal accident D. Medical expenses
C. Personal accident
What type of policy is a personal sickness policy? A. A defined policy B. A benefit policy C. An indemnity policy D. A life assurance policy
B. A benefit policy
Under personal accident insurance, the weekly benefit for disablement will usually be: A. a fluctuating amount B. no more than normal weekly earnings C. an amount equal to company sick pay D. a negotiated amount
B. no more than normal weekly earnings
Alf suffers an injury that leaves him permanently disabled. Out of the following, the most likely benefit he will receive under his personal accident policy will be a: A. weekly benefit B. monthly benefit C. ten-year annuity D. twenty-year annuity
C. ten-year annuity
The sickness section of a personal accident insurance policy generally excludes sickness contracted within how many days of policy inception? A. 7 days B. 14 days C. 21 days D. 28 days
C. 21 days
In a personal accident policy, what is the usual percentage of the weekly benefit paid for a temporary total disablement that can be paid for a temporary partial disablement? A. 30% B. 40% C. 50% D. 60%
B. 40%
What is the typical age range covered in respect of sickness cover? A. 18-55 B. 16-60 C. 16-70 D. 18-65
B. 16-60
Medical expenses insurance usually excludes: A. hospital charges B. specialist fees C. ambulance fees D. long-term residential care
D. long-term residential care
Which of these is usually provided as a standalone rather than package policy? A. Travel insurance B. Household insurance C. Commercial insurance D. Motor insurance
D. Motor insurance
Ahmed's television is stolen. His insurer offers to give him a settlement to buy a new television at current prices. What is this type of cover called? A. Market value B. Indemnity C. Reparation D. Reinstatement
D. Reinstatement
Sophie's ten-year-old washing machine is damaged by a fire. Her household insurer offers her a settlement with an age deduction. What is this type of cover called? A. Indemnity B. Renovation C. Reinstatement D. New for old
A. Indemnity
Under a standard building insurance policy, storm or flood cover is:
A. always subject to an excess
B. always excluded
C. never subject to an excess
D. available only as an optional extension
A. always subject to an excess
Which of these things would usually be covered under the accidental damage section of household contents insurance? A. Contact lenses B. Clothing C. Food and drink D. Televisions
D. Televisions
Paul wants to obtain cover for any damage he might do to his house in the course of his DIY projects, such as drilling through a pipe. Which optional cover does he need to purchase? A. ‘All risks’ B. Accidental damage C. Malicious damage D. DIY damage
B. Accidental damage
Cover for accidental damage is usually excluded for which of these items under the sports equipment section of a household contents insurance policy? A. Cricket bats B. Tennis racquets C. Golf balls D. Golf clubs
C. Golf balls
Which of these is usually available as an optional extension to a travel insurance policy? A. Personal liability B. Hospital cash benefits C. Delayed baggage D. Loss of passport
D. Loss of passport
Which type of cover is used as the basis for most business insurances, unless package cover is bought? A. A standard public liability policy B. A standard fire policy C. A standard theft policy D. A standard motor policy
B. A standard fire policy
Who issued recommended wordings for fire and special perils called the Standard Fire and Special Perils Policy (Material Damage)? A. The AIRMIC B. The FCA C. The CII D. The ABI
D. The ABI
The standard fire policy is made up of which three covers?
A. Fire, spontaneous fermentation and limited explosion
B. Fire, lightning and limited explosion
C. Fire, subterranean fire and heating
D. Fire, heating and storm damage
B. Fire, lightning and limited explosion
Which of these is generally classed a miscellaneous peril? A. Impact B. Flood C. Explosion D. Subsidence
A. Impact
Special perils cover for ‘non-political’ malicious damage specifically excludes damage arising from: A. fire B. water C. theft D. petrol
C. theft
Damage caused by which of these is excluded by the special perils cover for escape of water?
A. Leakage of water from a sprinkler system
B. Leakage of water from a pipe
C. Escape of water from a tank
D. Escape of water from drinking water apparatus
A. Leakage of water from a sprinkler system
The definition of this is "movement of the land on which premises stand:" A. subsidence B. landslide C. ground heave D. landslip
A. subsidence
Which of these is a standard market exclusion applicable to property insurance? A. Aircraft B. Pollution C. Explosion D. Earthquake
B. Pollution
Which of the following statements regarding an ‘all risks’ policy is TRUE?
A. It can include cover for motor vehicles
B. It provides cover against every risk
C. There are no limitations to the policy
D. There are no optional extensions to the policy
D. There are no optional extensions to the policy
Which of the following perils may be covered on a ‘first loss’ basis within an ‘all risks’ policy? A. Theft B. Terrorism C. Pollution D. Corrosion
A. Theft
Jan’s theft policy is worded: ‘Theft involving entry or exit from the premises by forcible and violent means.’ In which of the following circumstances can she therefore expect her policy to pay out?
A. Entry to the premises by a stolen key
B. Entry to the premises by forcing a lock
C. Entry to the premises by a trick
D. Entry to the premises by hiding on the premises after hours
B. Entry to the premises by forcing a lock
A standard glass insurance policy usually excludes cover for: A. mirrored glass B. glazed partitions C. scratching or chipping D. damage to window frames
C. scratching or chipping
Business interruption insurance is triggered by:
A. a loss of profits due to increased competition
B. a fall in the insured’s turnover following material damage
C. damage or destruction by an insured peril
D. financial losses incurred by the insured
C. damage or destruction by an insured peril
Price Toolmakers want to offer their employees a policy that gives them personal legal protection. What kind of policy should they purchase? A. Group legal benefit B. Professional indemnity C. Commercial legal protection D. Employee’s liability insurance
A. Group legal benefit
What are conveyancing costs? The legal costs of:
A. buying and selling a property
B. exporting goods
C. protecting intellectual property
D. claiming for compensation for unfair dismissal
A. buying and selling a property
Which of these is one of the five main sections of a commercial legal protection policy?
A. Cover against the cost of investigation by a professional body
B. Criminal prosecution defence cover
C. Libel and slander protection
D. Cover against the costs of being involved in a public enquiry
B. Criminal prosecution defence cover
Dan has business interruption insurance. A fire takes place at his factory. Which of the following would his business interruption insurance cover?
A. Fire damage to the equipment in Dan’s factory
B. Loss of income due to inability to undertake work that Dan’s factory usually does
C. Compensation to a member of Dan’s staff for an injury received in the fire
D. The destruction of Dan’s factory
B. Loss of income due to inability to undertake work that Dan’s factory usually does
Insurers calculate gross profit with the equation: A. variable charges + turnover B. turnover + net profit C. net profit + standing charges D. net profit + variable charges
C. net profit + standing charges
Standing charges are also known as? A. Fixed charges B. Upright charges C. Variable charges D. Turnover charges
A. Fixed charges
Andrew’s business premises are damaged by fire. Under the increased cost of working section of his business interruption policy what would be excluded?
A. Rental of new premises
B. Advertising to reassure customers
C. Reinstatement cover for damaged equipment
D. Employing additional staff
C. Reinstatement cover for damaged equipment
The standard perils under a business interruption policy are extended from the standard perils on a material damage policy to include explosion of: A. vessels B. tubes C. non-domestic boilers D. steam pipes
C. non-domestic boilers
What kind of insurance do employers need to have by law in the UK to compensate workers who suffer bodily injury or disease due to the employer's negligence? A. Public liability insurance B. Employers’ compensation insurance C. Employers’ liability insurance D. Directors’ and officers’ insurance
C. Employers’ liability insurance
Jack, a visitor to Speedy Deliveries, is injured whilst on their premises. Which of Speedy Deliveries insurance policies should compensate him for his injuries? Their: A. public liability policy B. group accident and sickness policy C. professional indemnity insurance D. employers’ liability policy
A. public liability policy
Under an Employers’ liability policy, cover applies in respect of bodily injury or disease:
A. caused during the period of insurance
B. that becomes apparent during the period of insurance
C. where a claim is made during the period of insurance
D. that is medically diagnosed during the period of insurance
A. caused during the period of insurance
Public liability insurance offers which of the following covers as standard? A. Loss or damage to property B. Defective premises C. Motor vehicles D. Professional negligence
A. Loss or damage to property
Public liability insurance typically offers which of the following as an optional extension? A. Contractual liability B. Tenant's liability C. Consequential loss D. Cost of rectifying defective work
B. Tenant’s liability
Which of the following is excluded by a directors’ and officers’ liability policy?
A. Cover for directors and officers in their personal capacity where they are unable to claim an indemnity from the company
B. Claims based upon improper personal gain by a director
C. Cover for the company, for repayment of legal dispute costs
D. Cover for past directors
B. Claims based upon improper personal gain by a director
Which of the following would be covered by charity trustees insurance?
A. The costs of a charity trustee unsuccessfully defending a criminal prosecution arising from fraud
B. Any fines incurred by a charity trustee
C. The personal liability of a charity trustee arising from their breach of trust
D. Liabilities to the charity resulting from the trustee’s conduct that the trustee knew, or should have known, was not in the interests of the charity
C. The personal liability of a charity trustee arising from their breach of trust
Which of these is an emergency cover typically offered completely free of charge as part of the assistance service offered by a home insurance provider? A. Legal advice B. Roof damage C. Glazing service D. Blocked drains
A. Legal advice
Amy’s sofa is damaged by fire. Her insurer asks her to go to their recommended supplier to get a replacement. An advantage of this to Amy is:
A. it avoids the need for a cash settlement
B. no need for negotiation over the price
C. preferential rates
D. the benefit of guarantees provided by the retailer
D. the benefit of guarantees provided by the retailer
How is every category of risk classified for fire insurance purposes? A. Sum insured and occupation B. Occupation and construction C. Sum insured and postcode D. Postcode and construction
B. Occupation and construction
For which type of cover is it unusual for a survey to be carried out? A. Business interruption B. Money insurance C. Material damage D. Theft insurance
B. Money insurance
Which of these is a moral hazard that a specialist employers’ liability surveyor would focus on? A. The guarding of dangerous machinery B. The construction of the building C. The positioning of fire exits D. The adequacy of training
D. The adequacy of training
Which of the following covers is typically mainly rated on historical claims experience? A. Engineering B. Motor fleet C. Employers’ liability D. Theft
B. Motor fleet
In which of the following circumstances might a person with comprehensive motor insurance be able to recover their excess using a loss recovery service?
A. Where the damage to their car has been caused by someone else
B. Never. Excesses are not recoverable under any circumstances
C. Only where the excess was compulsory
D. Only where the excess was voluntary
A. Where the damage to their car has been caused by someone else
Which of these is a material circumstance that would require disclosure by an insured at proposal stage?
A. Circumstances that lessen the risk
B. Unspent convictions
C. Circumstances the insurer ought to know
D. Circumstances where the insurer has waived its rights
B. Unspent convictions
Michael is completing a proposal form for his house insurance. He has recently built a pond in the garden, but the proposal form does not ask about ponds. Should he declare this to his insurers?
A. Yes, he should declare all circumstances, even if he is not sure if they are material
B. No, because this is not a material circumstance
C. Yes, because ponds are always considered a poor physical hazard
D. No, because there is no question on the proposal form
D. No, because there is no question on the proposal form
The subject matter of the insurance for a liability policy would be the:
A. policy wording
B. scope of the business activities covered
C. physical risk insured
D. limit of liability chosen
B. scope of the business activities covered
Supplementary questionnaires are used by insurers:
A. when dealing with particular aspects risks
B. to enable them to charge a higher premium
C. to discourage applications for cover from proposers with complex risks
D. instead of proposal forms
A. when dealing with particular aspects risks
What term is used to describe an authorised person used to access a particular market, usually Lloyd’s or the London market?
A. An appointed representative
B. A wholesale broker
C. An introducer appointed representative
D. An approved person
B. A wholesale broker
In which one of the following types of insurance is an individual most likely to be acting in the capacity of both consumer and commercial customer? A. Motor B. Household C. Medical expenses D. Travel
A. Motor
Which document governs the relationship between an intermediary and their client? A. Initial Disclosure Document B. Terms of Business Agreement C. Service Level Agreement D. Customer Service Agreement
B. Terms of Business Agreement
If an insurer is aware that a customer is acting in both a personal and commercial capacity, how does the FCA require them to be managed? A. As a personal customer B. As a consumer C. As a professional client D. As a commercial client
D. As a commercial client
A products liability insurance was effected on the basis of an estimated annual turnover of £25m at a rate of 0.5 per mille on turnover. The actual declared turnover at the end of the year is £20m. Ignoring tax, how will this affect the insured’s premium?
A. They will receive a refund of £2,500
B. They will receive a refund of £5,000
C. They will have to pay an additional premium of £2,500
D. They will have to pay an additional premium of £5,000
A. They will receive a refund of £2,500
Which of the following statements regarding commission and fees is TRUE?
A. There is no mandatory requirement to automatically disclose commission as part of the presentation of a quotation
B. There is no need to state separate fees charged by an intermediary instead of or in addition to commission
C. If a consumer asks for information regarding commission, they must be told in writing or other durable medium of the total remuneration payable to the intermediary
D. If a commercial customer asks for information regarding commission, they can be told orally of the total remuneration payable to the intermediary
A. There is no mandatory requirement to automatically disclose commission as part of the presentation of a quotation
Of what are critical illness policies an example? A. Payment protection policies B. Pure protection policies C. Strict liability policies D. Indemnity policies
B. Pure protection policies
Which of the following must be included in a key features document? A. Price information B. The service the firm will provide C. The address of the insurer D. The key facts logo
D. The key facts logo
Under which part of a policy document is the customer reminded to check the accuracy of the contents of the proposal confirmation? A. The operative clauses B. The recital clause C. The heading D. The policy schedule
B. The recital clause
Which of these elements, usually contained in a policy schedule, often also appears elsewhere in the policy? A. The insured's name B. The premium C. The insured's address D. The law applicable to the policy
D. The law applicable to the policy
Terrorism cover can be purchased as part of a commercial property cover with an insurer that participates in a scheme with a specialist reinsurer. This scheme has reserves that an insurer can call on if a loss reaches a certain level and if its reserves are met, the government will step in. This reinsurer is called: A. Government pool B. Pool Re C. Terrorism pool D. Pool risks
B. Pool Re
The subrogation condition allows the insurer to take over the insured’s rights to recover damages from a third party:
A. if the insured agrees to it specifically
B. before the payment of a claim
C. after the payment of a claim
D. if a case goes to court
B. before the payment of a claim
If a policy has a franchise of £200 and a claim is made for £600 what would the settlement amount be? A. £200 B. £400 C. £600 D. £800
C. £600
Under the terms of their policy, an insured promises that a state of affairs will exist now and in the future. What is the technical term used to describe this promise? A. A continuing warranty B. A policy condition C. A franchise D. A representation
A. A continuing warranty
Which of the following might an insurer be able to overlook or, at its option, avoid a policy? A. Lack of insurable interest B. An illegal contract C. A fundamental mistake D. A deliberate mis-statement
D. A deliberate mis-statement
Which of the following does not usually appear in the policy wording? A. Franchises B. Representations C. Exclusions D. Warranties
B. Representations
If the policy is a policy of indemnity, what must the insured prove in the event of a claim? That they have suffered: A. a financial loss B. a bodily injury C. mental distress D. physical damage
A. a financial loss
Which of these rights does an insurer forego when settling a claim on an ex gratia basis? A. Premium B. Contribution C. Disclosure D. Subrogation
D. Subrogation
What is the name given to duties imposed at common law whether or not they are actually found in the policy wording? A. Imposed duties B. Tortuous duties C. Express duties D. Implied duties
D. Implied duties
What is a motor claim form more commonly known as? A. A claims report B. A claim record C. An incident form D. An accident report form
D. An accident report form
Contribution only applies to: A. indemnity policies B. benefit policies C. motor policies D. marine policies
A. indemnity policies
Which clause deals with what happens when there is a dispute between the insurer and the insured over a claim settlement? A. Alteration B. Arbitration C. Contribution D. Subrogation
B. Arbitration
What do the majority of insurers follow when dealing with subrogated motor claims? A. The Motor Insurance Directive B. Alternative Dispute Resolution C. The Civil Procedure Rules D. An ABI Memorandum of Understanding
D. An ABI Memorandum of Understanding
In the event of a motor claim, the insurer agrees the insured may retain their vehicle as salvage. How does this affect the final settlement?
A. There is no bearing on the final amount paid
B. The claim is reduced by the value of the salvage
C. The excess is not applied to the claim
D. The claim is increased by the value of the salvage
B. The claim is reduced by the value of the salvage
The Motor Insurers’ Bureau operates under two main agreements. What are they?
A. The Uninsured Drivers and the Untraced Drivers Agreement
B. The Green Card and the Uninsured Drivers Agreement
C. The Green Card and the Untraced Drivers Agreement
D. The Road Traffic Act and the Green Card
A. The Uninsured Drivers and the Untraced Drivers Agreement
The General Data Protection Regulation states that personal data must be processed in a way that is: A. lawful B. efficient C. expedient D. vital
A. lawful
The General Data Protection Regulation introduces a duty of breach notification on?
A. All organisations
B. Organisations with more than 20 employees
C. Organisations with a turnover in excess of £500,000
D. Organisations with more than 100 data subjects
A. All organisations
Which of the following is a criminal offence introduced by the Computer Misuse Act 1990? A. Unauthorised access to a computer B. Unauthorised use of the internet C. Use of pirated software D. Distribution of copycat software
A. Unauthorised access to a computer
What is the function of an insurance aggregator?
A. It concludes agreements with a number of insurers to provide a comparative quote
B. It purchases small and SME broking firms to accumulate market share
C. It captures electronic policy data and provides this to insurers as market intelligence
D. It controls insurers’ exposure to risk by capping the amount of claims during a policy period
A. It concludes agreements with a number of insurers to provide a comparative quote
Which of the following technologies was first used in commercial vehicles? A. Webchat B. Telematics C. Social media D. Apps
B. Telematics
Which of these is a real concern for insurers when using social media to promote their services?
A. Access to non-EU markets
B. Premium rates
C. The potential for increased claims
D. The storage and protection of customer data
D. The storage and protection of customer data
How might an insurer ensure its employees are adequately protecting the data of its customers when using laptops and tablets for work purposes?
A. By limiting the types of policies that can be sold electronically
B. By taking up full character references on all new employees
C. By obtaining full permission from customers for use of personal data
D. By implementing an effective security policy
D. By implementing an effective security policy
What is another name for internal and external customers? A. Stakeholders B. Administrators C. Purchasers D. Shareholders
A. Stakeholders
Of what are 24-hour helplines and complaint handling mechanisms examples? A. Risk reduction techniques B. Chargeable add-ons C. Value-added services D. Extensions to cover
C. Value-added services
Customer service standards should be:
A. understandable, promotional, realistic
B. realistic, understandable, measurable
C. realistic, measurable, promotional
D. measurable, understandable, promotional
B. realistic, understandable, measurable
Which body uses the ‘Firm Supervision Framework’ to assess if the interests of customers and market integrity are at the heart of how a firm is run? A. The ABI B. The FOS C. The PRA D. The FCA
D. The FCA
The FCA’s Principle 8 states that a firm must manage conflicts of interests: A. thoroughly B. aggressively C. fairly D. proactively
C. fairly
What do industry standards allow an insurer to do in the context of customer service?
A. Compare itself to other insurance companies
B. Compare its current performance to past performance
C. Consider actual practices between and within its departments
D. Improve its overall market profile
A. Compare itself to other insurance companies
