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NEW QUESTION 23
When motor insurance is purchased directly with an insurer, what is usually the main disadvantage to the policyholder in the event of a claim compared to purchasing indirectly through a different marketing channel?
- A. A courtesy car is not available.
- B. There is no intermediary to provide assistance.
- C. The policy excess is higher.
- D. The risk of losing a no claims discount is greater.
Answer: B
NEW QUESTION 24
In the event of an insurer including an unclear clause in its household insurance policy, which statute could the policyholder rely upon if there was a contractual dispute?
- A. The Consumer Rights Act 2015.
- B. The Contracts (Rights of Third Parties) Act 1999.
- C. The Data Protection Act 2018.
- D. The Criminal Justice Act 1993.
Answer: A
NEW QUESTION 25
A house slatls to have subsidence problems due to the negligence of a cable-laying company. The owner of the house claims under his household buildings insurance policy. Which principle allows the insurer to recover from the cable-laying company?
- A. Assignment.
- B. Contribution.
- C. Subrogation.
- D. Salvage.
Answer: C
NEW QUESTION 26
What is the current rate of Insurance Premium Tax for a motor insurance policy?
- A. 12%
- B. 9.5%
- C. 20%
- D. 10%
Answer: A
NEW QUESTION 27
Sunita suffers a loss and makes a claim under her household contents insurance policy. When must insurable interest exist for her claim to be valid?
- A. At the time of the proposal.
- B. At policy inception only.
- C. At policy inception and at the time of the loss.
- D. At the time of the loss only.
Answer: C
NEW QUESTION 28
Joel buys a house in a flood plain, but it has NOT flooded for 10 years. In purchasing insurance, Joel is managing what element of risk?
- A. Uncertainty.
- B. Statutory requirements.
- C. Frequency.
- D. Certainty.
Answer: A
NEW QUESTION 29
A Terms of Business Agreement between an insurer and an intermediary will normally state that the insurer will deal with the policyholder
- A. outside normal business hours,
- B. only when collecting premiums.
- C. via the intermediary.
- D. on a direct basis,
Answer: C
NEW QUESTION 30
If an insured signs an agreement with a hold harmless clause, this may prevent the insurer from
- A. reinsuring the risk.
- B. increasing the premium.
- C. disclosing details to a third party.
- D. pursuing subrogation rights.
Answer: D
NEW QUESTION 31
Who is represented by a loss assessor?
- A. A policyholder.
- B. A claims handler.
- C. A broker.
- D. An underwriter.
Answer: A
NEW QUESTION 32
A policyholder achieves peace of mind when insuring his car by
- A. preventing the chance of a loss occurring.
- B. reducing the chance of a loss occurring.
- C. transferring the risk to the insurer.
- D. eliminating the risk of loss.
Answer: C
NEW QUESTION 33
Which professional body specialises in giving its members advice on the long-term management of assets and liabilities?
- A. The Institute and Faculty of Actuaries.
- B. The Lloyd's Market Association.
- C. The Chartered Institute of Loss Adjusters.
- D. The International Underwriting Association of London.
Answer: A
NEW QUESTION 34
An investor is unable to obtain insurance to protect his potential losses while trading on the stock market because the category of risk is deemed to be
- A. particular.
- B. financial.
- C. pure.
- D. speculative.
Answer: D
NEW QUESTION 35
Alex decides to insure his factory. In doing this he is primarily
- A. protecting his business against certainty of loss.
- B. reducing his moral hazard.
- C. reducing his physical hazard.
- D. transferring the risk to the insurer.
Answer: D
NEW QUESTION 36
A loss adjuster normally acts on behalf of the
- A. insured.
- B. Financial Services Compensation Scheme.
- C. Financial Ombudsman Service.
- D. insurer.
Answer: D
NEW QUESTION 37
If a proposer has failed to fully answer a question on a proposal form, the insurer is deemed to have waived its rights to this information because it
- A. has statistics on similar risks.
- B. should be able to underwrite the risk based on the information already provided.
- C. does not have the right to ask the proposer for more information.
- D. did not request further information.
Answer: D
NEW QUESTION 38
A retail customer CANNOT buy insurance directly from which type of insurer?
- A. A composite insurer.
- B. A direct insurer.
- C. A captive insurer.
- D. A mutual insurer.
Answer: C
NEW QUESTION 39
What is the basis of settlement under a new for old insurance policy if a television is stolen?
- A. The original cost, less wear and tear.
- B. The original cost in full.
- C. The replacement cost, less wear and tear.
- D. The replacement cost in full.
Answer: C
NEW QUESTION 40
Under a coinsurance arrangement, who is ultimately responsible for payment of an agreed claim?
- A. The lead insurer.
- B. Each coinsurer for its own proportion, but also a share of any proportion unpaid due to the default of another coinsurer.
- C. The intermediary.
- D. Each coinsurer for its own proportion only.
Answer: D
NEW QUESTION 41
The principle of indemnity is the
- A. obligation of the insurer to provide a maximum sum insured or limit of liability.
- B. placing of the insured, at expiry of a policy, in the same financial position as enjoyed at inception.
- C. obligation of the insurer to pay all valid claims according to the terms and conditions of the policy.
- D. placing of the insured, after a loss, in the same financial position as enjoyed immediately before the loss.
Answer: D
NEW QUESTION 42
An insurance company has employed an individual from a rival firm to carry out a similar job. At which stage would the regulatory requirements for retaining training and competence records first apply to the new employee, if at all?
- A. Within 18 months of employment.
- B. When the employee first has contact with members of the public.
- C. From the initial interview.
- D. It would not apply, as the employee is already fully competent.
Answer: B
NEW QUESTION 43
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