E05 CII Examination element of M05 Insurance law exact Exam Questions

Examination element of M05 Insurance law

Last Update 19 hours ago Total Questions : 50

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Question # 11

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?

Reject the claim, but maintain the policy.

Reduce the claim amount in proportion to the premium it would have charged.

Apply any terms it would have applied if the misrepresentation had not taken place.

Avoid the contract, refuse all claims and keep the premium.

Question # 12

Why may an insurer insert a continuing warranty into an insurance policy?

To ensure that underinsurance is avoided at all times.

To enable an insurer to charge an additional premium if the warranty is continually breached.

To maintain the annual aggregate limit of liability throughout the policy period.

To encourage good risk management by the insured throughout the policy period.

Question # 13

What are the main objectives of the principle of insurable interest?

To reduce moral hazard and to discourage profiteering.

To reduce physical hazard and to discourage profiteering.

To reduce physical hazard and to discourage wagering.

To reduce moral hazard and to discourage wagering.

Question # 14

What is the most common for of corporation?

Registered corporation.

Chartered corporation.

Corporation sole.

Statutory corporation.

Question # 15

As a result of a breach of good faith under a commercial insurance policy, the insurer avoided the policy as a whole, but was NOT permitted to retain the premium because

the misrepresentation was fraudulent.

the premium was paid by monthly installments.

no claim had been submitted or paid.

the misrepresentation was innocent.