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CII Insurance Legal and Regulatory (IF1) Sample Questions:
1. 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 as consideration does not need to be adequate.
B) unenforceable unless Harry signs a disclaimer acknowledging the consideration as acceptable.
C) enforceable but only if Harry does not refute the contract within six months of the contract date.
D) unenforceable as the consideration is inadequate.
2. 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.
3. 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) policyholder finds that he has inadvertently taken out more than one policy covering the same risk.
D) number of insurers agree to collectively insure a particular risk in agreed proportions.
4. A storm blew down the wall of a limber building. The failing wall broke electrical wiring, which short-circuited and the resultant sparks caused a fire. The lire brigade used water to put out the fire and the water caused damage to the unburnt contents. What is the proximate cause of the damage to the unburnt contents?
A) The falling wall.
B) The fire.
C) The water damage.
D) The storm.
5. A risk control survey shows that premises proposed for insurance are in close proximity to a river with a history of flooding. The underwriter will consider this fact to be a
A) pure risk.
B) physical hazard.
C) fundamental risk.
D) moral hazard.
Solutions:
Question # 1 Answer: A | Question # 2 Answer: B | Question # 3 Answer: B | Question # 4 Answer: D | Question # 5 Answer: B |