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Basic Insurance Concepts & Principles - exampdfs 02

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Basic Insurance Concepts & Principles - exampdfs 02

Pregunta 1 de 50

1

Which of the following clauses is useful for insuring antiques?

Selecciona una de las siguientes respuestas posibles:

  • Reinstatement Clause

  • "New for Old " Clause

  • Limit of Liability Clause

  • Agreed Value Clause

Explicación

Pregunta 2 de 50

1

Which of the following is most often included in a Householder's Insurance policy?

Selecciona una de las siguientes respuestas posibles:

  • "New for Old" Clause

  • Agreed Value Clause

  • Deductible Clause

  • Franchise Clause

Explicación

Pregunta 3 de 50

1

What of the following is defined as "the right of one person (the insurer) to take over the rights of another (the insured)"?

Selecciona una de las siguientes respuestas posibles:

  • Subrogation

  • Sublet

  • Right of Lien

  • Assignment

Explicación

Pregunta 4 de 50

1

Which of the following is used to make sure that an insured person does not get more than an indemnity by claiming for the same loss or damage from both the insurance policy and another source or sources?

Selecciona una de las siguientes respuestas posibles:

  • Subrogation

  • Sublet

  • Right of Lien

  • Assignment

Explicación

Pregunta 5 de 50

1

Under common law, the insurer must ________ the insured before they can exercise subrogation rights.

Selecciona una de las siguientes respuestas posibles:

  • insure

  • inform

  • indemnify

  • None of the others

Explicación

Pregunta 6 de 50

1

With regards to subrogation, if there is any surplus after the insurers have recovered their money, the ________ is entitles to keep it.

Selecciona una de las siguientes respuestas posibles:

  • insurer

  • insured

  • split equality amongst the insurer and the insured

  • None of the others

Explicación

Pregunta 7 de 50

1

Subrogation is applicable only to:

Selecciona una de las siguientes respuestas posibles:

  • Contracts of Indemnity

  • Motor Insurance

  • Reinsurance

  • Marine Cargo Insurance

Explicación

Pregunta 8 de 50

1

Which of the following situations is also known as ex-gratia payment?

Selecciona una de las siguientes respuestas posibles:

  • A payment made by an insurer outside the terms of the policy

  • The premiums an insurer pays to a reinsurer

  • The premiums forfeited by the insurer due to fraud by the insured

  • The payment a third party (in the case of subrogation) is obligated to pay

Explicación

Pregunta 9 de 50

1

Subrogation rights most frequently arise in:

Selecciona una de las siguientes respuestas posibles:

  • tort

  • Contract

  • reinsurance

  • All of the others

Explicación

Pregunta 10 de 50

1

Waiver of subrogation rights most frequently arise in:

Selecciona una de las siguientes respuestas posibles:

  • Reinsurance

  • Life insurance

  • Motor insurance

  • All of ther others

Explicación

Pregunta 11 de 50

1

In common law, which requirement must be satisfied before contribution arises?

Selecciona una de las siguientes respuestas posibles:

  • two or more policies of indemnity must exist

  • the policies must cover a common interest

  • the policies must be liable for the loss

  • All of the others

Explicación

Pregunta 12 de 50

1

Which of the following clauses when added to a policy will cause the policy not to contribute if there is another insurance in force?

Selecciona una de las siguientes respuestas posibles:

  • Non-Contribution Clause

  • Cancel-out Clause

  • Common Interest Clause

  • Basis of Contribution Clause

Explicación

Pregunta 13 de 50

1

Which of the following is NOT a category of peril?

Selecciona una de las siguientes respuestas posibles:

  • Insured Peril

  • Pecuniary Peril

  • Unnamed Peril

  • Exluded Peril

Explicación

Pregunta 14 de 50

1

Which of the following is TRUE regarding a Fire Insurance policy which excludes damage from explosion?

Selecciona una de las siguientes respuestas posibles:

  • A falling tree branch lands on some electrical circuitry and causes an electrical fault, which in turns starts a fire. The fire damage is covered.

  • The fire reaches a gas cylinder and causes an explosion. The resulting damage is not covered.

  • The falling tree branch damages part of the property. The resulting damage is not covered.

  • All of the others.

Explicación

Pregunta 15 de 50

1

Suppose a Householder's Insurance policy covers a direct physical loss to a property resulting from fire or lightning. A fire occurred in a bedroom of a house. Fireman sprayed the other rooms to keep the fire from spreading. The water causes damage to the furniture, antiques, etc. In such a case:

Selecciona una de las siguientes respuestas posibles:

  • the entire loss is covered, including the water damage

  • the entire loss is covered, excluding the water damage

  • nothing is covered

  • None of the others

Explicación

Pregunta 16 de 50

1

Duties of an Agent to the Principal include all the following except:

Selecciona una de las siguientes respuestas posibles:

  • Obey the principal's instruction under all circumstances

  • Act in good faith towards the principal

  • Account for money received on behalf of the principal

  • Exercise proper care and skill

Explicación

Pregunta 17 de 50

1

An agent should not delegate his duties except where the delegation:

Selecciona una de las siguientes respuestas posibles:

  • is expressly consented by the principal

  • is to be implied from the circumstances of the case

  • relates to some purely administrative act for which no special skill or discretion is required

  • All of the others

Explicación

Pregunta 18 de 50

1

Agents must act within the scope of their authority which can be classified into all of the following except:

Selecciona una de las siguientes respuestas posibles:

  • actual authority

  • implied authority

  • temporary authority

  • apparent authority

Explicación

Pregunta 19 de 50

1

Which of the following authorities is exercised when an insurance agent collects the premium from the insured?

Selecciona una de las siguientes respuestas posibles:

  • express authority

  • apparent authority

  • customary authority

  • implied authority

Explicación

Pregunta 20 de 50

1

Which of the following authorities is exercised when a broker negotiates with the insurer on the insured's behalf without given authority?

Selecciona una de las siguientes respuestas posibles:

  • express authority

  • apparent authority

  • customary authority

  • implied authority

Explicación

Pregunta 21 de 50

1

Apparent authority is also known as:

Selecciona una de las siguientes respuestas posibles:

  • Express authority

  • Implied authority

  • Usual authority

  • Ostensible authority

Explicación

Pregunta 22 de 50

1

Where an agent has acted outside the scope of what is permitted in the terms of the agency agreement, and the principal accepts the acts as having been done on his behalf, this is called:

Selecciona una de las siguientes respuestas posibles:

  • Waiver

  • Estoppel

  • Ratification

  • None of the others

Explicación

Pregunta 23 de 50

1

The following are rules in relation to a valid ratification, except

Selecciona una de las siguientes respuestas posibles:

  • The agent who performed the act must have purported to act on behalf of the principal

  • The principal should only ratify the affected parts of the contract

  • The client must have believed that he was dealing with an authorized agent of the principal

  • The agent must have represented himself as an agent of the principal

Explicación

Pregunta 24 de 50

1

The voluntary relinquishment of a known legal right is known as:

Selecciona una de las siguientes respuestas posibles:

  • Waiver

  • Estoppel

  • Retification

  • None of the others

Explicación

Pregunta 25 de 50

1

Leonard has a motor insurance policy and its premium is due. He calls the insurance agent and asks for an extension of time. The insurance agent assured him that the insurer has a 10 day grace period for overdue premiums. If Leonard has an accident during the grace period, the insurer cannot deny liability, because of the law of ________, designed to prevent persons from changing their minds to the detriment of another party.

Selecciona una de las siguientes respuestas posibles:

  • Indemnity

  • Estoppel

  • Right of Lien

  • Ratification

Explicación

Pregunta 26 de 50

1

If an agent incurs liability or pays out money in the performance as an agent, he has a right to be indemnified by the principal except when:

Selecciona una de las siguientes respuestas posibles:

  • his act is not authorized by the principal

  • he is in breach of his duties as an agent

  • he incurs money or expends money solely as a result of his own fault

  • All of the others

Explicación

Pregunta 27 de 50

1

Which of the following describes the Right of Lien?

Selecciona una de las siguientes respuestas posibles:

  • An agent may have the right to retain goods belonging to his principal if there is any money outstanding in his favour

  • A principal may have the right to revoke an agent's authority

  • An agent may have the right of renouncing the agency

  • An agent may have the right to act as a middle-man between the principal and a third-party

Explicación

Pregunta 28 de 50

1

An agency may be terminated by which of the following acts?

Selecciona una de las siguientes respuestas posibles:

  • Completion of the business or specific act

  • Agreement between parties to the contract

  • Death of either the principal or the agent

  • All of the others

Explicación

Pregunta 29 de 50

1

Which of the following is NOT true with regards to the role of agent during claims?

Selecciona una de las siguientes respuestas posibles:

  • The agent must give prompt advice to the insured of the claims requirement

  • The agent must be careful not to give any indication of acceptance or rejection of the claim

  • The agent cannot inform the insurer of any potential claims without consent from the insured

  • The agent must make clear to the insured that the insurer's investigation and processing of a claim is not prejudiced

Explicación

Pregunta 30 de 50

1

Which of the following is NOT true about the description or definition of a contract?

Selecciona una de las siguientes respuestas posibles:

  • An agreement enforceable by law

  • A legally binding agreement between two or more parties

  • An agreement involving a promise or a set of promises to perform one or more acts whereby the promise must be made by all parties of the contract

  • An agreement governing the obligations of the insurer and the rights of the insured.

Explicación

Pregunta 31 de 50

1

Which of the following are elements for a contract to be valid?
1) Intention to create legal ralationship
2) Offer and acceptance
3) Consideration
4) Capacity to contract

Selecciona una de las siguientes respuestas posibles:

  • 1) and 2)

  • 1) and 4)

  • 1), 2), and 4)

  • All of them

Explicación

Pregunta 32 de 50

1

Which of the following is NOT a characteristic of group insurance?

Selecciona una de las siguientes respuestas posibles:

  • There is a master contract

  • There is an experience rating

  • There is no eligibility requirements

  • It is cost effective

Explicación

Pregunta 33 de 50

1

The amount returned by an insurer to a group policyholder when the claims experienced of a particular group has been more favourable than anticipated is known as the:

Selecciona una de las siguientes respuestas posibles:

  • Excess

  • Experience refund

  • Voluntary benefits

  • No-claim discount

Explicación

Pregunta 34 de 50

1

Which of the following is an advantage of a voluntary group insurance compared to a compulsory one?

Selecciona una de las siguientes respuestas posibles:

  • Ease of administration since there is no payroll deduction to monitor

  • Lower cost owing to less administrative work involved

  • Generates interest and appreciation from the participating employees in the insurance plan

  • Greater pooling effect or risks

Explicación

Pregunta 35 de 50

1

Third party policies do not require insurable interest between the proposer and insured.

Selecciona uno de los siguientes:

  • VERDADERO
  • FALSO

Explicación

Pregunta 36 de 50

1

What is a Cover Note?

Selecciona una de las siguientes respuestas posibles:

  • A document highlighting any additional coverage added to the policy

  • A temporary cover before an insurance policy is issued

  • The cover page of an insuranc policy

  • A note from the insurer to the insured

Explicación

Pregunta 37 de 50

1

Certificate of Insurance are normally used in all the following except:

Selecciona una de las siguientes respuestas posibles:

  • Life insurance

  • Work injury compensation

  • Motor insurance

  • Marine insurance

Explicación

Pregunta 38 de 50

1

The following is true of a cover note except:

Selecciona una de las siguientes respuestas posibles:

  • It is valid only for a certain period

  • It is subject to the usual terms and conditions of the insurance policy for that class of business

  • It is subject to any further special clauses (if applicable)

  • It is subject to the insurance policy being in force and issued

Explicación

Pregunta 39 de 50

1

The certificate of insurance for motor insurance must be kept by the ______ at all times.

Selecciona una de las siguientes respuestas posibles:

  • Traffic Police

  • Government

  • Motorist

  • Insurer

Explicación

Pregunta 40 de 50

1

In marine insurance, insureds have regular shipments of cargo and it is sometimes inconvenient for the insurer to issue an insurance policy giving the details of all the classes for each and every shipment. What sort of Master policy is issued to solve this problem?

Selecciona una de las siguientes respuestas posibles:

  • Broad cover

  • Miscellaneous cover

  • Open cover

  • All cover

Explicación

Pregunta 41 de 50

1

What is the 'contra proferetum' rule?

Selecciona una de las siguientes respuestas posibles:

  • The policy must be issued within the fixed period of time as promised by the insurer

  • It is a rule in marine insurance that the policy must cover broad definitions of the quality of the vessels, basis of valuation and limits, together with a rating structure

  • The responsibility of the insured to make sufficient copies of a Certificate of Insurance for display at all business premises

  • The person drawing up a legal document is responsible for any defects in it and cannot profit from such defects

Explicación

Pregunta 42 de 50

1

What is the Preamble Clause?

Selecciona una de las siguientes respuestas posibles:

  • This clause sets out in details, precisely what the policy is insuring

  • This clause states the parties to the contract

  • This clause states that it is the insured's responsibility to establish that a loss falls within the policy contract

  • This clause sets of the exlucsions or exceptions in a policy document

Explicación

Pregunta 43 de 50

1

Which type of warranties do not appear in the policy but are understood to automatically apply in the contract of insurance?

Selecciona una de las siguientes respuestas posibles:

  • Express Warranties

  • Implied Warranties

  • Both Express Warranties and Implied Warranties

  • None of the others

Explicación

Pregunta 44 de 50

1

The statement "In witness whereof, this Policy has been signed by and on behalf of the Company", is known is:

Selecciona una de las siguientes respuestas posibles:

  • Attestation clause

  • Express Warranty

  • Implied Warranty

  • Endorsement

Explicación

Pregunta 45 de 50

1

Conditions precedent to liability are conditions which must be fulfilled:

Selecciona una de las siguientes respuestas posibles:

  • before the contract can become valid

  • if the contract is to continue once it becomes binding

  • before the insured is legally entitled to recover under the contract

  • All of the others

Explicación

Pregunta 46 de 50

1

An insured has a policy with Insurer X for $75,000 and Insurer Y for $25,000. A loss arises to the sum of S$40,000, under the Independent Liability method of calculation, how much should Insurer X pay for?

Selecciona una de las siguientes respuestas posibles:

  • $10,000

  • $15,385

  • $24,615

  • $30,000

Explicación

Pregunta 47 de 50

1

An insured has a policy with Insurer X for $75,000 and Insurer Y for $25,000. A loss arises to the sum of S$40,000, under the Respective Sums Insured, how much should Insurer Y pay for?

Selecciona una de las siguientes respuestas posibles:

  • $10,000

  • $15,385

  • $24,615

  • $30,000

Explicación

Pregunta 48 de 50

1

An agreement whereby one or more reinsurers automatically accept all reinsurance which falls within pre-detemined limits is known as:

Selecciona una de las siguientes respuestas posibles:

  • Facultative reinsurance

  • Treaty reinsurance

  • proportional reinsurance

  • Non-proportional reinsurance

Explicación

Pregunta 49 de 50

1

An insurer insures a risk on a sum insured of $10M and his retention on his risk is $2M. It reinsures the risk under a Facultative Excess of Loss cover of $8M in excess of $2M. If the loss is $5M, what is payable by the reinsurer?

Selecciona una de las siguientes respuestas posibles:

  • Nothing

  • $2M

  • $3M

  • $5M

Explicación

Pregunta 50 de 50

1

An insurer insures a risk on a sum insured of $10M and his retention on this risk is $2M. It reinsures the risk under a Facultative Excess of Loss cover of $8M in excess of $2M. If the loss is $1M, what is payable by the insurer?

Selecciona una de las siguientes respuestas posibles:

  • Nothing

  • $1M

  • $3M

  • $6M

Explicación

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