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NEW QUESTION # 49
Bye-laws are passed at the Lloyd's Market by the
- A. Lloyds Managing Agent.
- B. Corporation of Lloyd's.
- C. Council of Lloyd's.
- D. Lloyd's Market Association.
Answer: C
NEW QUESTION # 50
How would an employee benefit directly from her employer's business interruption insurance if its factory was forced to close temporarily due to flood damage?
- A. By continuation of her wages.
- B. By compensation for loss of bonus.
- C. By payment of a redundancy lump sum.
- D. By payment of an early retirement pension.
Answer: A
NEW QUESTION # 51
The principle of indemnity is the
- A. obligation of the insurer to provide a maximum sum insured or limit of liability.
- B. obligation of the insurer to pay all valid claims according to the terms and conditions of the policy.
- C. placing of the insured, at expiry of a policy, in the same financial position as enjoyed at inception.
- D. placing of the insured, after a loss, in the same financial position as enjoyed immediately before the loss.
Answer: D
NEW QUESTION # 52
John and his wife arrange a household contents insurance policy in joint names with insurer A for a sum insured of £10,000. His wife arranges a second policy on the same basis with insurer B for a sum insured of
£20,000. Both policies have identical terms and conditions. What is insurer A's liability if a valid claim of
£3,000 is subsequently made?
- A. £3,000
- B. £2,000
- C. £1,000
- D. £1,500
Answer: C
NEW QUESTION # 53
Michael, an insurance company employee, strongly suspects that a recent transaction involved money laundering but decides NOT to report his suspicions to anyone. How is this treated under the current Money Laundering Regulations?
- A. It is a criminal offence.
- B. It is a disciplinary offence under the Banking Code.
- C. It is a civil offence.
- D. It is a disciplinary offence dealt with by the Money Laundering Joint Steering Committee.
Answer: D
NEW QUESTION # 54
The Principles for Business slate that all customers should be treated
- A. to a minimum standard.
- B. fairly.
- C. with due respect.
- D. equally.
Answer: B
NEW QUESTION # 55
If the amount to be paid in the event of a total loss of insured property is agreed between the proposer and the insurer at inception of the policy, this is a modification of the principle of
- A. subrogation.
- B. indemnity.
- C. good faith.
- D. contribution.
Answer: B
NEW QUESTION # 56
Self-insurance arises when a
- A. policyholder decides to insure proportions of his property with different insurers.
- B. company decides to set aside a fund to pay losses that may occur.
- C. number of insurers agree to collectively insure a particular risk in agreed proportions.
- D. policyholder finds that he has inadvertently taken out more than one policy covering the same risk.
Answer: B
NEW QUESTION # 57
A loss adjuster normally acts on behalf of the
- A. Financial Ombudsman Service.
- B. insured.
- C. Financial Services Compensation Scheme.
- D. insurer.
Answer: D
NEW QUESTION # 58
What is the current rate of Insurance Premium Tax for a motor insurance policy?
- A. 12%
- B. 10%
- C. 20%
- D. 9.5%
Answer: A
NEW QUESTION # 59
A broker collects premiums on behalf of an insurer and subsequently goes into liquidation. Various premiums are outstanding to the insurer, despite policyholders having paid the broker What action is the insurer most likely to take?
- A. Write to the liquidator to register the debt.
- B. Apply for a second payment from the policyholders.
- C. Cancel the policies from inception for non-payment.
- D. Offer a discounted premium payment to the policyholders.
Answer: A
NEW QUESTION # 60
An owner of a building reduces its sum insured from £1,000.000 lo £500.000 to save premiums. A Tire causes
£300,000 damage to the building. If the building has a reinstatement value of £750,000 and average is applied, how much will the insured receive in settlement?
- A. £150.000
- B. £300.000
- C. £200.000
- D. £500.000
Answer: C
NEW QUESTION # 61
In order for a contract to be legally enforceable, what further action is required after offer and acceptance?
- A. Exchange of consideration between the two parties.
- B. Delivery of goods or services concerned.
- C. Provision of written terms and conditions.
- D. Witnessing by a third party.
Answer: A
NEW QUESTION # 62
What is the basis of settlement under a new for old insurance policy if a television is stolen?
- A. The replacement cost in full.
- B. The original cost in full.
- C. The replacement cost, less wear and tear.
- D. The original cost, less wear and tear.
Answer: C
NEW QUESTION # 63
How does insurable interest arise, if at all. when an insurer arranges reinsurance?
- A. Insurable interest does not arise.
- B. The policyholder is considered to have assigned the insurable interest to the insurer.
- C. The insurer is considered to have insurable interest by virtue of its liability to pay claims.
- D. Insurable interest is created by statute.
Answer: C
NEW QUESTION # 64
If an insured signs an agreement with a hold harmless clause, this may prevent the insurer from
- A. reinsuring the risk.
- B. pursuing subrogation rights.
- C. disclosing details to a third party.
- D. increasing the premium.
Answer: B
NEW QUESTION # 65
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