CII
In insurance, the principle of proximate cause is important because it:
a.enables insurers to pursue third parties to reclaim costs.
b.ensures that those that take out insurance have a financial interest in the insured risk.
c.establishes the cause of a loss.
d.enables insurers to reclaim part of the cost of a claim from other insurers.
c.establishes the cause of a loss.
This is found in Chapter 3F
Which insurance principle requires the proposer to disclose all material facts?
a.Good faith.
b.Insurable interest.
c.Contribution.
d.Indemnity.
a.Good faith.
This is found in Chapter 3D
Under common law, an insurer has the right to pursue a responsible third party to minimise its loss. What is this known as?
a.Redress.
b.Subrogation.
c.Contribution.
d.Averaging.
b.Subrogation.
This is found in Chapter 3H
An insurer quotes a premium and provides full policy details to a customer, who then accepts these. This is known as a[n]:
a.unconditional acceptance.
b.conditional acceptance.
c.unconditional offer.
d.conditional offer.
a.unconditional acceptance.
This is found in Chapter 3A2A
With an insurance contract, what does 'consideration' usually mean?
a.The need to suffer financially should a loss occur.
b.The need to fully disclose the information requested at outset.
c.The need to comply with all policy warranties.
d.The payment of the premium.
d.The payment of the premium.
This is found in Chapter 3A3
A valid contract requires certain conditions to be met, EXCEPT:
a.there must be consideration.
b.an offer must be made.
c.there must always be a counter offer.
d.there must be acceptance of the offer.
c.there must always be a counter offer.
This is found in Chapter 3A1
What is the insurance principle called that requires the insured to have a financial interest in the subject matter of the insurance?
a.Indemnity.
b.Proximate cause.
c.Utmost good faith.
d.Insurable interest.
d.Insurable interest.
This is found in Chapter 3C1
Under common law, the principle of contribution is most likely to result in a payment from:
a.insurer to reinsurer.
b.insurer to insurer.
c.intermediary to insurer.
d.policyholder to insurer.
b.insurer to insurer.
This is found in Chapter 3G
If an insured understates the value of the risk, the insurer may reduce the value of any claim under the principle of:
a.indemnity.
b.contribution.
c.average.
d.subrogation.
c.average.
This is found in Chapter 3I
When might contribution NOT be possible?
a.If each policy is liable for the loss.
b.Where the subject matter is the same.
c.Where policies do not have a common insurable interest.
d.If the peril is common to both policies.
c.Where policies do not have a common insurable interest.
This is found in Chapter 3G2
What is the insurance principle of indemnity intended to do?
a.Uphold the responsibility of the insurer to pay a claim.
b.Provide the insurer with the ability to reinsure some or all of the risk.
c.Put the insured back to the same financial position as they were before a loss.
d.Ensure the insured gets some financial support but not for their whole loss.
c.Put the insured back to the same financial position as they were before a loss.
This is found in Chapter 3E1
When an agent acts outside the agency agreement but afterwards the principal accepts that this was done on their behalf, what is this known as?
a.Agency by client interest.
b.Agency by ratification.
c.Agency by necessity.
d.Agency by consent.
b.Agency by ratification.
This is found in Chapter 3B2
If a household insurance policy will replace stolen property with new items without any deduction for wear and tear, what is this known as?
a.New for old.
b.Agreed value.
c.Indemnity.
d.First Loss.
a.New for old.
This is found in Chapter 3E3B
What type of insurance policy only pays claims up to a sum insured that is less than the total value of the insured goods?
a.A new for old policy.
b.A first loss policy.
c.An agreed value policy.
d.A partial replacement policy.
b.A first loss policy.
This is found in Chapter 3E3C
Before an insurer can recover costs from a third party, under common law, what must it do?
a.Obtain a court agreement to do so.
b.Have started settling the insured's claim.
c.Nothing. It can seek to recover costs at any time after a loss has occurred.
d.Settle the insured's claim.
d.Settle the insured's claim.
This is found in Chapter 3H
What method of providing indemnity under an insurance policy is the insured LEAST likely to experience?
a.Replacement.
b.Cash payment.
c.Reinstatement.
d.Repair.
c.Reinstatement.
This is found in Chapter 3E2D
Under the Consumer Insurance [Disclosure and Representations] Act 2012, if a misrepresentation is regarded as deliberate or reckless, an insurer:
a.will still need to settle any claim in full.
b.will always decline all claims and will retain the premiums paid.
c.can make a proportionate response based on the severity of the misrepresentation.
d.may treat the policy as if it never existed and decline all claims.
d.may treat the policy as if it never existed and decline all claims.
This is found in Chapter 3D1A
An insured's home contents are valued at £9,000 but are only insured for £6,000. If his contents policy is subject to average and he suffers a loss of £3,500, how much will his insurer pay?
a.£1,167.
b.£2,333.
c.£3,500.
d.£1,542.
b.£2,333.
This is found in Chapter 3I
For contribution to arise, a number of requirements must be satisfied. Which is NOT one of these?
a.Common peril.
b.Three or more policies must exist.
c.The same insurable interest.
d.Common subject matter.
b.Three or more policies must exist.
This is found in Chapter 3G2
Janice was riding her motorbike when she had to swerve to avoid a dog, which resulted in damage to the bike. She may be entitled to reclaim the costs of this under:
a.common law.
b.statute law.
c.criminal law.
d.contract law.
a.common law.
This is found in Chapter 3H2A
Mary is a grandmother who gives her son Steve money to buy a car for the use of her grandchildren, Gemma and Matt. Who has insurable interest in the car?
a.Gemma and Matt.
b.Steve only.
c.Mary and Steve.
d.Mary only.
b.Steve only.
This is found in Chapter 3C1
Sven has his possessions stolen while on holiday. They are insured under both his contents policy and his travel insurance and both are liable for the loss. If there is no contribution clause in either policy, what is most likely to happen?
a.Sven would need to claim from each insurer separately for a proportion of the loss.
b.Whichever insurer Sven claims against is required to meet the loss in full.
c.Sven will receive reimbursement for his loss twice.
d.One insurer will meet the claim and seek a contribution from the other.
d.One insurer will meet the claim and seek a contribution from the other.
This is found in Chapter 3G
Under the Insurance Act 2015, the duty of the proposer to make a fair presentation of a risk to an insurer applies to:
a.consumers and charitable trusts only.
b.commercial customers.
c.all customers.
d.consumers.
b.commercial customers.
This is found in Chapter 3D1B
Which parties to a commercial insurance contract are subject to the duty of disclosure?
a.Insurer only.
b.Insured only.
c.Both the insurer and the insured.
d.Neither the insured nor the insurer.
c.Both the insurer and the insured.
This is found in Chapter 3D