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NEW QUESTION # 53
The purpose of the EU solvency requirements for insurers and intermediaries is to
- A. create a standard format for the presentation of accounting data.
- B. introduce monitoring procedures by the Prudential Regulation Authority.
- C. provide authorisation to transact insurance business.
- D. strengthen the financial security of the insurer or intermediary.
Answer: A
NEW QUESTION # 54
It is important to ensure the fair treatment of customers in order to comply with rules set by the
- A. British Insurance Brokers' Association.
- B. Financial Conduct Authority.
- C. Association of British Insurers.
- D. Chartered Insurance Institute.
Answer: B
NEW QUESTION # 55
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. via the intermediary.
- C. on a direct basis,
- D. only when collecting premiums.
Answer: B
NEW QUESTION # 56
Sara searches on a comparison website for car insurance. She selects the cheapest quotation and pays by credit card for immediate cover. This is known as
- A. unconditional acceptance.
- B. conditional acceptance.
- C. an offer.
- D. a Terms of Business Agreement.
Answer: A
NEW QUESTION # 57
In accordance with the principle of good faith, which facts must a potential policyholder disclose to the insurer when applying for insurance?
- A. Only those facts considered likely to reduce the cost of cover
- B. Any facts which are considered material to the risk.
- C. Any facts of law.
- D. Any facts which are in the public domain.
Answer: B
NEW QUESTION # 58
John wishes to insure his friend's house. Why would an insurer refuse to provide a quotation?
- A. He does not have any subrogation rights.
- B. He does not live in the house.
- C. His name is not on the mortgage.
- D. He does not have any insurable interest.
Answer: D
NEW QUESTION # 59
The Principles for Business slate that all customers should be treated
- A. equally.
- B. with due respect.
- C. fairly.
- D. to a minimum standard.
Answer: C
NEW QUESTION # 60
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 # 61
Who can place business directly with a Lloyd's underwriter?
- A. Members of the public.
- B. Lloyd's brokers only.
- C. Lloyd's agents.
- D. Lloyd's brokers and other intermediaries.
Answer: D
NEW QUESTION # 62
When completing a proposal form, Tom declares that he has two spent speeding convictions. How, if at all, will the spent convictions affect an underwriter's decision to write the risk?
- A. They will be classed as relevant information and will affect the premium.
- B. They will not be considered as this is not an underwriting factor in motor insurance risk assessment.
- C. They will be ignored in accordance with the provisions of the Rehabilitation of Offenders Act 1974.
- D. They will only be considered if Tom had a further speeding conviction in the last 12 months.
Answer: C
NEW QUESTION # 63
What is the principal reason for which a proposer is asked by the insurer whether his car will be driven by anyone else?
- A. To enable a loading to be applied.
- B. To establish whether insurable interest exists.
- C. It is a material circumstance.
- D. To enable a discount to be applied.
Answer: C
NEW QUESTION # 64
The Financial Ombudsman Service will make a ruling on a dispute between
- A. a third party and the insurer against whom he is making a liability claim.
- B. a private individual and an insurer.
- C. an insurance broker and an insurer.
- D. an insurer and a reinsurer.
Answer: B
NEW QUESTION # 65
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. Apply for a second payment from the policyholders.
- B. Offer a discounted premium payment to the policyholders.
- C. Write to the liquidator to register the debt.
- D. Cancel the policies from inception for non-payment.
Answer: C
NEW QUESTION # 66
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 payment of an early retirement pension.
- B. By continuation of her wages.
- C. By compensation for loss of bonus.
- D. By payment of a redundancy lump sum.
Answer: B
NEW QUESTION # 67
A loss adjuster normally acts on behalf of the
- A. Financial Services Compensation Scheme.
- B. insurer.
- C. Financial Ombudsman Service.
- D. insured.
Answer: B
NEW QUESTION # 68
What type of risk is a widespread natural disaster?
- A. A fundamental risk.
- B. A pure risk.
- C. A particular risk.
- D. A speculative risk.
Answer: A
NEW QUESTION # 69
Which key test for money laundering is defined under the Proceeds of Crime Act 2002?
- A. Criminal possession.
- B. Criminal lifestyle.
- C. Criminal record.
- D. Criminal intelligence.
Answer: B
NEW QUESTION # 70
Under common law. when does the insured's duly of fair presentation cease with regard to declarations that do NOT affect policy cover?
- A. At renewal.
- B. When a claim is submitted.
- C. When a claim is paid.
- D. When the policy contract lakes effect.
Answer: A
NEW QUESTION # 71
A Terms of Business Agreement between an insurer and an intermediary sets out the
- A. agreed claims procedures as stated in the Insurance: Conduct of Business sourcebook (ICOBS).
- B. criteria to apply when reporting suspicious incidents to the Money Laundering Reporting Officer.
- C. disaster recovery procedures to apply if there is a major disaster affecting the insurer.
- D. framework for the commercial relationship, which defines and allocates the respective responsibilities and rights to each party.
Answer: D
NEW QUESTION # 72
When Susan applied for a new household contents insurance policy, she was obliged to disclose her extensive claims history. Such details are normally known as
- A. material circumstances.
- B. contractual terms.
- C. indemnity.
- D. warranties.
Answer: A
NEW QUESTION # 73
Which general rule does the Contracts (Rights of Third Parties) Act 1999 seek to modify?
- A. Subrogation.
- B. Contra proferentem.
- C. Good faith.
- D. Privity of contract.
Answer: D
NEW QUESTION # 74
Barbara owns a factory employing 20 people. What insurance is she required to hold by law?
- A. Employers' liability insurance.
- B. Public liability insurance.
- C. Professional indemnity insurance.
- D. Products liability insurance.
Answer: A
NEW QUESTION # 75
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. contribution.
- B. subrogation.
- C. indemnity.
- D. good faith.
Answer: C
NEW QUESTION # 76
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 # 77
What type of reduction is sometimes applied to the replacement cost of an item under an insurance policy claim in order to reflect the application of indemnity?
- A. Brokerage.
- B. An excess.
- C. Loss of interest.
- D. Wear and tear.
Answer: D
NEW QUESTION # 78
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