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CII Examination element of M05 Insurance law Sample Questions:
1. What are the main objectives of the principle of insurable interest?
A) To reduce physical hazard and to discourage profiteering.
B) To reduce moral hazard and to discourage profiteering.
C) To reduce physical hazard and to discourage wagering.
D) To reduce moral hazard and to discourage wagering.
2. A warranty in Emily's personal travel insurance policy states that cash must be kept in a locked safe. Whilst on holiday, a storm destroys her hotel and its contents. When Emily completes a claim form for loss of money, she admits that her cash was NOT locked in the safe. What will be the insurer's likely response to her claim for the lost money?
A) Reject the claim for breach of warranty.
B) Pay the claim in full.
C) Make an ex-gratia payment.
D) Avoid the policy ab initio.
3. For this question more than 1 option is correct. You must select all the correct options to gain the mark. What are the characteristics of an express term in reaching or recording an agreement?
A) It will usually override any implied term which conflicts with it.
B) It may be implied by conduct.
C) It must be evidenced in documentary form.
D) It may be oral or in writing.
4. According to statute, a term under a consumer personal accident insurance policy may potentially be considered unfair if the insurer
A) provides coverage that is more restrictive than that of other insurers.
B) requires notification of a claim within a very short time period.
C) applies a specific exclusion within the policy wording.
D) imposes a premium loading.
5. 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) Reject the claim, but maintain the policy.
B) Apply any terms it would have applied if the misrepresentation had not taken place.
C) Avoid the contract, refuse all claims and keep the premium.
D) Reduce the claim amount in proportion to the premium it would have charged.
Solutions:
Question # 1 Answer: D | Question # 2 Answer: B | Question # 3 Answer: A,D | Question # 4 Answer: B | Question # 5 Answer: B,D |