IFSet3010118v2 Flashcards
Which of the following insurance principles relates to disclosing information? A. Quantum B. Offer and acceptance C. Insurable interest D. Utmost good faith
D. Utmost good faith
The case that established the principle that the duty of utmost good faith applies to an insurer as well as a proposer was:
A. Rozanes v. Bowen (1928)
B. Carter v. Boehm (1766)
C. London General Omnibus Co. Ltd. V. Holloway (1912)
D. Banque Keyser Ullmann SA v. Skandia (UK) Insurance Company Ltd. (1986)
D. Banque Keyser Ullmann SA v. Skandia (UK) Insurance Company Ltd. (1986)
The Marine Insurance Act 1906 defined a material fact as something that would affect the judgment of a: A. particular insurer B. shrewd insurer C. prudent insurer D. prudential insurer
C. prudent insurer
Mike’s potential insurer has asked permission to send round a surveyor to take a look at the risk. This is most likely because Mike is looking for: A. private motor insurance B. professional indemnity insurance C. commercial property insurance D. household buildings insurance
C. commercial property insurance
Which of the following would be considered as a poor moral hazard under motor insurance? A. The age of the vehicle B. A driver’s lack of care C. The age of the driver D. The condition of the vehicle
B. A driver’s lack of care
In the context of duty of disclosure, what core change was brought about by the Consumer Insurance (Disclosure and Representations) Act 2012?
A. Transfer of the duty of disclosure from the insured to the intermediary
B. Creation of the requirement for insurers to include ‘opt out’ provisions in their
proposals forms
C. Creation of a legal duty for consumers to volunteer material facts
D. Abolition of the duty on consumers to volunteer material facts
D. Abolition of the duty on consumers to volunteer material facts
Fraudulent non-disclosure or misrepresentation is also known as? A. Inducement B. Corruption C. Concealment D. Laundering
C. Concealment
Under the Consumer Insurance (Disclosure and Representations) Act 2012, in the case of a deliberate or reckless breach of the duty of disclosure by a policyholder which induces the insurer to enter a contract of insurance, the remedy available to an insurer is?
A. Avoid the policy (it will be held to have never existed)
B. Alter their terms and deal with the risk in the same way they would have done had there been no breach
C. Request payment of any higher premium that should have been paid had there been no breach and then pay out the claim
D. Proportionately reduce the amount payable for a claim if they would have charged a higher premium had there been no breach
A. Avoid the policy (it will be held to have never existed)
A risk survey can help determine each of the following with the exception of: A. a description of the risk B. estimated maximum loss C. an assessment of the level of risk D. premium rating
D. premium rating
When an insurer has provided a proposer with the subjectivities of a policy such as the premium and terms and conditions, this is known as? A. a quotation B. a proposal C. an estimate D. a statement of fact
A. a quotation
Chris gets a quote for car insurance. The quote is valid for 30 days. He decides to accept the quote after 31 days; what will happen?
A. The insurer must issue a new quote
B. Nothing, the insurer is forbidden to honour the quote by law
C. The insurer may choose to honour the quote
D. Nothing, the insurance is already on cover
C. The insurer may choose to honour the quote
In the context of insurance, what is ‘Lemonade’? A. A price comparison website B. An American online insurer C. An underwriting network D. A fraud database
B. An American online insurer
Why is it necessary for the proposal form for a commercial risk to include a warning about material information and material circumstances?
A. To comply with FCA regulation
B. To point out the dangers of non-disclosure
C. To meet data protection provisions
D. To assist in the identification of fraudulent proposals
B. To point out the dangers of non-disclosure
A products liability insurance was effected on the basis of annual turnover of £25m at a rate of 0.5 per mille on turnover. What would the premium have been? A. £12,500 B. £23,750 C. £25,000 D. £50,000
A. £12,500
What enables an insurer to accurately determine a fair premium for a risk where they already have a large pool of similar exposures? A. The law of large numbers B. The law of average C. The law of tort D. The law of equality
A. The law of large numbers
Martin's house is valued at £200,000. His insurer applies a premium rate of 0.5%. What would his premium be? A. £500 B. £1,000 C. £1,500 D. £2,000
B. £1,000
If an insured cannot provide an exact figure for the premium basis at the beginning of the policy period, they pay an initial premium based on an estimate. This is called: A. a deposit premium B. an initial premium C. an adjustable premium D. a conditional premium
A. a deposit premium
What can an insurer issue for the insured as proof of cover during the period that further information is being awaited before the final policy documents are issued? A. A charter note B. A schedule C. An endorsement D. A cover note
D. A cover note
Employers are required to display employers’ liability certificates in their place of business. If they don’t do this, where else is an acceptable place to provide them to employees?
A. In an encrypted format
B. In new employees’ welcome packs
C. On request in the personnel department
D. In an electronic format, accessible by all employees
D. In an electronic format, accessible by all employees
Which rule means that neither the insurer nor the proposer can rely on negotiations leading up to the contract for its terms and conditions but must rely on the contract itself? A. The parol evidence rule B. The contract certainty rule C. The Rylands v. Fletcher rule D. The uberrimae fides rule
A. The parol evidence rule
According to the 'contra proferentem' rule, if an insurance policy contains an ambiguous term who will it be interpreted in favour of? A. The insured B. The insurer C. Either the insured or the insurer D. Neither the insured or the insurer
A. The insured
The common policy condition which states that an insured must not hinder the insurer in their investigation of a claim is usually: A. a compulsory condition B. an implied condition C. an express condition D. an additional condition
B. an implied condition
Details of complaints procedures can be found in which section of the policy? A. The recital clause B. The operative clause C. The information section D. The schedule
C. The information section
Which type of exclusion applies only to particular parts of the policy? A. Specific exclusions B. Market exclusions C. General exclusions D. Particular exclusions
A. Specific exclusions
Which of these statements relating to the most recent Pool Re scheme is FALSE?
A. The insured can choose whether to purchase the additional cover
B. The premium rates are set by the government
C. All damage caused by a terrorist attack is excluded in the insurer’s standard commercial property wordings for the risks
D. Each individual insurer’s maximum liability is capped for each terrorist attack and per year
B. The premium rates are set by the government
In the event of an insurer exercising subrogation rights to recover payment from a third party, whose name will the court action be held in? A. Joint names B. The third party's name C. The insured's name D. The insurer's name
C. The insured’s name
Each of these statements regarding warranties is true with the exception of?
A. They must be strictly and literally complied with
B. They may relate to past or present facts
C. Express warranties are written and will be incorporated into the policy
D. The law on warranties is unaffected by the Insurance Act 2015
D. The law on warranties is unaffected by the Insurance Act 2015
In relation to representations made by consumers, which of these is an effect of the Consumer Insurance (Disclosure and Representations) Act 2012?
A. Representations made by consumers can no longer be converted to warranties
B. Representations made by consumers must be converted to warranties
C. Representations made by consumes cannot be converted to conditions
D. Representations made by consumers are converted to implied conditions
A. Representations made by consumers can no longer be converted to warranties
A policy where the insured needs cover for a finite period, such as a contract works policy for a buildings insurance, is a: A. benefit policy B. short-term policy C. contract policy D. renewable policy
B. short-term policy
What is usually the method that insurers use to invite an insured to renew their policy?
A. Awaiting telephone contact by the insured
B. Issuing a renewal notice
C. Phoning the customer
D. Deducting a premium from the customer’s bank account
B. Issuing a renewal notice
