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Basic Insurance Concepts & Principles - exampdfs 02

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Basic Insurance Concepts & Principles - exampdfs 02
shuiziliu
Quiz por shuiziliu, atualizado more than 1 year ago
shuiziliu
Criado por shuiziliu mais de 10 anos atrás
1862
14
0

Resumo de Recurso

Questão 1

Questão
Which of the following clauses is useful for insuring antiques?
Responda
  • Reinstatement Clause
  • "New for Old " Clause
  • Limit of Liability Clause
  • Agreed Value Clause

Questão 2

Questão
Which of the following is most often included in a Householder's Insurance policy?
Responda
  • "New for Old" Clause
  • Agreed Value Clause
  • Deductible Clause
  • Franchise Clause

Questão 3

Questão
What of the following is defined as "the right of one person (the insurer) to take over the rights of another (the insured)"?
Responda
  • Subrogation
  • Sublet
  • Right of Lien
  • Assignment

Questão 4

Questão
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?
Responda
  • Subrogation
  • Sublet
  • Right of Lien
  • Assignment

Questão 5

Questão
Under common law, the insurer must ________ the insured before they can exercise subrogation rights.
Responda
  • insure
  • inform
  • indemnify
  • None of the others

Questão 6

Questão
With regards to subrogation, if there is any surplus after the insurers have recovered their money, the ________ is entitles to keep it.
Responda
  • insurer
  • insured
  • split equality amongst the insurer and the insured
  • None of the others

Questão 7

Questão
Subrogation is applicable only to:
Responda
  • Contracts of Indemnity
  • Motor Insurance
  • Reinsurance
  • Marine Cargo Insurance

Questão 8

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

Questão 9

Questão
Subrogation rights most frequently arise in:
Responda
  • tort
  • Contract
  • reinsurance
  • All of the others

Questão 10

Questão
Waiver of subrogation rights most frequently arise in:
Responda
  • Reinsurance
  • Life insurance
  • Motor insurance
  • All of ther others

Questão 11

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

Questão 12

Questão
Which of the following clauses when added to a policy will cause the policy not to contribute if there is another insurance in force?
Responda
  • Non-Contribution Clause
  • Cancel-out Clause
  • Common Interest Clause
  • Basis of Contribution Clause

Questão 13

Questão
Which of the following is NOT a category of peril?
Responda
  • Insured Peril
  • Pecuniary Peril
  • Unnamed Peril
  • Exluded Peril

Questão 14

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

Questão 15

Questão
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:
Responda
  • 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

Questão 16

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

Questão 17

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

Questão 18

Questão
Agents must act within the scope of their authority which can be classified into all of the following except:
Responda
  • actual authority
  • implied authority
  • temporary authority
  • apparent authority

Questão 19

Questão
Which of the following authorities is exercised when an insurance agent collects the premium from the insured?
Responda
  • express authority
  • apparent authority
  • customary authority
  • implied authority

Questão 20

Questão
Which of the following authorities is exercised when a broker negotiates with the insurer on the insured's behalf without given authority?
Responda
  • express authority
  • apparent authority
  • customary authority
  • implied authority

Questão 21

Questão
Apparent authority is also known as:
Responda
  • Express authority
  • Implied authority
  • Usual authority
  • Ostensible authority

Questão 22

Questão
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:
Responda
  • Waiver
  • Estoppel
  • Ratification
  • None of the others

Questão 23

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

Questão 24

Questão
The voluntary relinquishment of a known legal right is known as:
Responda
  • Waiver
  • Estoppel
  • Retification
  • None of the others

Questão 25

Questão
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.
Responda
  • Indemnity
  • Estoppel
  • Right of Lien
  • Ratification

Questão 26

Questão
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:
Responda
  • 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

Questão 27

Questão
Which of the following describes the Right of Lien?
Responda
  • 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

Questão 28

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

Questão 29

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

Questão 30

Questão
Which of the following is NOT true about the description or definition of a contract?
Responda
  • 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.

Questão 31

Questão
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
Responda
  • 1) and 2)
  • 1) and 4)
  • 1), 2), and 4)
  • All of them

Questão 32

Questão
Which of the following is NOT a characteristic of group insurance?
Responda
  • There is a master contract
  • There is an experience rating
  • There is no eligibility requirements
  • It is cost effective

Questão 33

Questão
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:
Responda
  • Excess
  • Experience refund
  • Voluntary benefits
  • No-claim discount

Questão 34

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

Questão 35

Questão
Third party policies do not require insurable interest between the proposer and insured.
Responda
  • True
  • False

Questão 36

Questão
What is a Cover Note?
Responda
  • 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

Questão 37

Questão
Certificate of Insurance are normally used in all the following except:
Responda
  • Life insurance
  • Work injury compensation
  • Motor insurance
  • Marine insurance

Questão 38

Questão
The following is true of a cover note except:
Responda
  • 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

Questão 39

Questão
The certificate of insurance for motor insurance must be kept by the ______ at all times.
Responda
  • Traffic Police
  • Government
  • Motorist
  • Insurer

Questão 40

Questão
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?
Responda
  • Broad cover
  • Miscellaneous cover
  • Open cover
  • All cover

Questão 41

Questão
What is the 'contra proferetum' rule?
Responda
  • 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

Questão 42

Questão
What is the Preamble Clause?
Responda
  • 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

Questão 43

Questão
Which type of warranties do not appear in the policy but are understood to automatically apply in the contract of insurance?
Responda
  • Express Warranties
  • Implied Warranties
  • Both Express Warranties and Implied Warranties
  • None of the others

Questão 44

Questão
The statement "In witness whereof, this Policy has been signed by and on behalf of the Company", is known is:
Responda
  • Attestation clause
  • Express Warranty
  • Implied Warranty
  • Endorsement

Questão 45

Questão
Conditions precedent to liability are conditions which must be fulfilled:
Responda
  • 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

Questão 46

Questão
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?
Responda
  • $10,000
  • $15,385
  • $24,615
  • $30,000

Questão 47

Questão
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?
Responda
  • $10,000
  • $15,385
  • $24,615
  • $30,000

Questão 48

Questão
An agreement whereby one or more reinsurers automatically accept all reinsurance which falls within pre-detemined limits is known as:
Responda
  • Facultative reinsurance
  • Treaty reinsurance
  • proportional reinsurance
  • Non-proportional reinsurance

Questão 49

Questão
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?
Responda
  • Nothing
  • $2M
  • $3M
  • $5M

Questão 50

Questão
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?
Responda
  • Nothing
  • $1M
  • $3M
  • $6M

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