IF1 Exam Training Practice Tests (CII Insurance Legal and Regulatory (IF1))]

Question 1

Who is represented by a loss assessor?

A. A claims handler. B. A broker. C. An underwriter. D. A policyholder.

Correct Answer: D

Question 2

Harry owns a sports car valued at £1.000 and agrees to sell it to Ben for £500. Ben discusses this with his solicitor who states the contract is

A. enforceable but only if Harry does not refute the contract within six months of the contract date. B. unenforceable as the consideration is inadequate. C. enforceable as consideration does not need to be adequate. D. unenforceable unless Harry signs a disclaimer acknowledging the consideration as acceptable.

Correct Answer: C

Question 3

The purpose of Insurance Premium Tax is to

A. raise revenue for the Government. B. reimburse for claims of insolvent insurers C. fund the Association of British Insurers. D. pay for flood defences.

Correct Answer: A

Question 4

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

Correct Answer: C

Question 5

A policyholder achieves peace of mind when insuring his car by

A. transferring the risk to the insurer. B. reducing the chance of a loss occurring. C. preventing the chance of a loss occurring. D. eliminating the risk of loss.

Correct Answer: A

Question 6

If a firm is said to be risk averse, this means that it

A. carries its own risk wherever possible. B. arranges insurance protection wherever possible. C. undertakes its own risk management research. D. tenders its insurance needs to the market.

Correct Answer: A

Question 7

Which general rule does the Contracts (Rights of Third Parties) Act 1999 seek to modify?

A. Privity of contract. B. Subrogation. C. Good faith. D. Contra proferentem.

Correct Answer: A

Question 8

An intermediary needs to place a large properly risk, however the insurance company can only write 25% of the risk. What type of insurance arrangement would the intermediary require to complete the risk?

A. Coinsurance. B. Self-insurance. C. Dual insurance. D. Reinsurance.

Correct Answer: A

Question 9

The Principles for Business slate that all customers should be treated

A. with due respect. B. to a minimum standard. C. equally. D. fairly.

Correct Answer: D

Question 10

When a member of the Chartered Insurance Institute (CM) is dealing with a client, what specific guidance does the Code of Ethics give in relation to the member's knowledge and expertise?

A. The member must provide the client with a copy of appropriate qualifications. B. The member must be qualified to a minimum of the CD's diploma qualification. C. The member's knowledge and expertise must be kept up to date and relevant. D. The member must notify the Cll of any shortcomings in his knowledge.

Correct Answer: C

CII Insurance Legal and Regulatory (IF1) - IF1 Exam Practice Test