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NEW QUESTION # 15
What is the intended purpose of a subrogation waiver clause in an insurance po
- A. Cover is suspended whilst the insurer pursues an action for subrogation.
- B. The insurer's subrogation rights will not be exercised against certain parties associated with the insured.
- C. The doctrine of subrogation is excluded from the policy.
- D. The insured has a duty to ensure that the insurer's subrogation rights are maintained.
Answer: B
NEW QUESTION # 16
What is the most common for of corporation?
- A. Statutory corporation.
- B. Corporation sole.
- C. Registered corporation.
- D. Chartered corporation.
Answer: C
NEW QUESTION # 17
In terms of private motor insurance, a renewal offer can be accepted
- A. only by the proposer personally.
- B. by any third party.
- C. by the proposer acting in reliance of the offer.
- D. only by written communication.
Answer: C
NEW QUESTION # 18
John owns stock that he intentionally insured for £15,000, although the full value of the stock is £18.000. His insurance policy has no excess and is subject to a pro rata condition of average. In the event of water damaging
£6.000 of John's stock, how much will the insurer pay for a valid claim after the application of average?
- A. £5,000
- B. £15,000
- C. £3,000
- D. £6,000
Answer: A
NEW QUESTION # 19
How can an agency relationship be best described?
- A. A person has the authority to act on behalf of another party.
- B. A person has transferred his obligations under a contract to another party.
- C. A person, who has paid another party under a contract, has the right to stand in the place of that other party and avail himself of the rights and remedies of that party.
- D. A person has ratified another party's action.
Answer: A
NEW QUESTION # 20
A married couple have equal shares in a property and are insured under a buildings insurance policy. What is the likely position in law of a breach of good faith by one party, which was unknown to the other party?
- A. Cover would be maintained in full for the innocent party as the cover is likely to be a joint policy
- B. Cover would be maintained in full for the innocent party as the cover is likely to be a composite policy.
- C. Cover for both parties would be invalidated as the cover is likely to be a joint policy.
- D. Cover for both parties would be invalidated as the cover is likely to be a composite policy.
Answer: C
NEW QUESTION # 21
For this question more than 1 option is correct. You must select all the correct options to gain the mark. What are the main sources of new English Law?
- A. Legislation.
- B. International treaties.
- C. Case law.
- D. Official law reports.
Answer: A,C
NEW QUESTION # 22
The proximate cause of a loss is best described as the
- A. most dominant cause of the loss.
- B. final peril to cause the loss.
- C. first peril to cause the loss.
- D. most remote cause of the loss.
Answer: A
NEW QUESTION # 23
For this question more than 1 option is correct. You must select fill the correct options to gain the mark. In what circumstances would an agency agreement be automatically terminated?
- A. Bankruptcy of the principal.
- B. Disclosure of the name of the principal.
- C. Death of the agent.
- D. Bankruptcy of the agent.
Answer: A,C
NEW QUESTION # 24
Bill owned a painting which was insured under a policy containing a first refusal clause. The painting was stolen and Bill's claim was settled, but several months later the painting was recovered by the police. As a consequence, what is Bill's position under his insurance policy?
- A. Bill must buy the painting back.
- B. Bill must return the claim settlement in exchange for the painting.
- C. Bill may keep the claim settlement and also keep the painting.
- D. Bill may exercise an option to buy the painting back.
Answer: D
NEW QUESTION # 25
The branch of law particularly relevant when handling negligence claims is
- A. public law.
- B. civil law.
- C. administrative.
- D. constitutional law.
Answer: B
NEW QUESTION # 26
At what stage is insurable interest required for a marine cargo insurance policy?
- A. At both inception of the policy and at the time of the loss.
- B. Throughout the duration of the contract.
- C. At the time of the loss only.
- D. At inception of the policy only.
Answer: C
NEW QUESTION # 27
For this question more than 1 option is correct. You must select all the correct options to gain the mark.
A proposer for private motorcycle insurance carelessly states the motorcycle's engine capacity as 500cc when in fact it is 1500cc. A policy is issued by the insurer on this basis. In the event of a valid claim causing damage to the motorcycle, what potential remedies are available to the insurer under the Consumer Insurance (Disclosure and Representations) Act 2012?
- A. Reduce the claim amount in proportion to the premium it would have charged.
- B. Avoid the contract, refuse all claims and keep the premium.
- C. Apply any terms it would have applied if the misrepresentation had not taken place.
- D. Reject the claim, but maintain the policy.
Answer: A,C
NEW QUESTION # 28
What are the main objectives of the principle of insurable interest?
- A. To reduce physical hazard and to discourage wagering.
- B. To reduce physical hazard and to discourage profiteering.
- C. To reduce moral hazard and to discourage profiteering.
- D. To reduce moral hazard and to discourage wagering.
Answer: D
NEW QUESTION # 29
Tim is a local insurance broker. He has authority to receive premiums for a personal lines insurer and earns commission from the insurer for sales. Paul, an elderly customer, asked Tim for advice regarding his personal insurance requirements and to assist with completing the proposal form for household insurance. In these circumstances, who, if anyone, is Tim's principal?
- A. The insurer at all times.
- B. No one as Tim is not a party to the insurance contract.
- C. Paul as it is a consumer contract.
- D. Both the insurer and Paul at different times.
Answer: A
NEW QUESTION # 30
For this question more than 1 option is correct. You must select ail the correct options to gain the mark.
In what circumstances does the Fires Prevention (Metropolis) Act 1774 require insurance companies to ensure that claims monies are used to rebuild or reinstate buildings destroyed or damaged by fire?
- A. When fraud or arson by the insured is suspected.
- B. Upon the request of any person(s) interested in the buildings.
- C. Where the building was destroyed by an explosion.
- D. Where there is underinsurance.
Answer: A,B
NEW QUESTION # 31
Why may an insurer insert a continuing warranty into an insurance policy?
- A. To enable an insurer to charge an additional premium if the warranty is continually breached.
- B. To maintain the annual aggregate limit of liability throughout the policy period.
- C. To encourage good risk management by the insured throughout the policy period.
- D. To ensure that underinsurance is avoided at all times.
Answer: C
NEW QUESTION # 32
The principle of subrogation prevents a policyholder from profiting from
- A. assigning abandonment rights to the insurer.
- B. retaining salvaged property.
- C. claiming under both his insurance policy and against any negligent third party.
- D. submitting a full claim recovery under more than one insurance policy.
Answer: C
NEW QUESTION # 33
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