Question 1
Question
The Insurance market comprises:
1) buyers
2) sellers
3) intermediaries
Question 2
Question
An example of a Seller in an insurance market is/are:
Question 3
Question
Which of the following is not classified as Commercial General Insurance?
Answer
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Professional Indemnity Insurance
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Marine Cargo Insurance
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Personal Liability Insurance
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Work Injury Compensation Insurance
Question 4
Question
Microinsurance provides a variety of different risks, including illnesses, accidental bodily injuries, death and property loss, designed for the affordability and accessibility to low-income households.
Question 5
Question
It is mandatory for Takaful insurance to be compliant with Shariah and the Islamic law.
Question 6
Question
Which of the following is an example of pure risk?
Answer
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Being robbed
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Running a business
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Earthquake
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Driving a car
Question 7
Question
Which of the following is NOT an example of fundamental risk?
Answer
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War
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Flood
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Driving a car
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Unemployment
Question 8
Question
Which of the following is NOT a category of any type of insurance contract?
Answer
-
Contract of Insurability
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Contract of Indemnity
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Valued contract
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Benefit contract
Question 9
Question
Which of the following is NOT commonly insured under a valued contract?
Question 10
Question
Which of the following is commonly classified as a contract of indemnity?
Question 11
Question
Which of the following is commonly classified as a benefit contract?
Question 12
Question
Which of the following types of loss is NOT insurable?
Question 13
Question
What is a peril?
Answer
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An event or occurrence which causes a loss, an injury or damage
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An event or occurrence that creates or increases the risk of loss
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An event or occurrence whereby people, through their careless or irresponsible action creates or increases the risk of loss
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All of the others
Question 14
Question
In insurance, which of the following is NOT a type of hazard?
Answer
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Moral hazard
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Physical hazard
-
Accidental hazard
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None of the others
Question 15
Question
A moral hazard can involve a situation in which a person engineers a loss on purpose in order to make a false claim against an insurance company.
Question 16
Question
Which of the following is NOT a method of risk control?
Answer
-
Avoidance
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Confine
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Retention
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Transfer
Question 17
Question
Which of the following is a type of risk retention whereby one is aware of a risk and intentionally retains it, or a portion of it:
Answer
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Active retention
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Passive retention
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Self retention
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Insurance retention
Question 18
Question
Which of the following clauses are usually used in a contract so that one party will assume legal liability on behalf of another party?
Question 19
Question
Which of the following is a method to use such that a risk and its potential financial consequences can be transferred to another party without the use of insurance?
Answer
-
Risk transfer
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Risk pooling
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Non-insurance transfer
-
Non-insurance pooling
Question 20
Question
Non-insurance transfer methods are usually used in which type of contacts?
Question 21
Question
Which of the following are benefits of insurance?
Question 22
Question
What is insurable interest?
Answer
-
The legal right to insure
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The amount of compensation
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The real reason for the loss
-
The insured
Question 23
Question
What is subrogation?
Answer
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The legal right to insure
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The legal right to recovery
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The real reason for the loss
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The amount of compensation
Question 24
Question
Which of the following is NOT TRUE about 'common law'?
Answer
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It is sometimes called 'unwritten law'
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It consists of generally accepted rules and requirements that a civilized society will consider automatic
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It can be modified or abolished by statute law
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It cannot be modified by the mutual agreement of parties to a contract
Question 25
Question
Which of the following is NOT essential to insurable interest?
Answer
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There must be some property, rights, interest or potential liability capable of being insured
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The property, rights, interest or potential liability must be the subject matter of the insurance
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The insured must not stand in a relationship, recognized by law, with the subject matter of the insurance
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The proposer must benefit from the continued existence of the subject matter of the contract or be prejudiced by its loss
Question 26
Question
Which of the following types of insurance contracts do not need proof of existence of insurable interest at the time that the policy is issued?
Question 27
Question
Which of the following relationships do not have an insurable interest?
Answer
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Husband and wife
-
Employee and employer
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Debtor and creditor
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None of the others
Question 28
Question
The doctrine of utmost good faith imposes which of the following duties on the parties to the contract?
Question 29
Question
Which of the following can be influenced by a material fact?
Question 30
Question
Facts of law do not need to be disclosed as material facts because everyone is expected to know the law.
Question 31
Question
Duty of disclosure commences at all of the following times EXCEPT the:
Question 32
Question
Duty of disclosure arises under:
Answer
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1) Common law
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2) The policy terms
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Both 1) and 2)
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None of the others
Question 33
Question
Duty of disclosure is only applicable to the:
Answer
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Insured
-
Insurer
-
Both Insured and Insurer
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None of the others
Question 34
Question
For a fact to be considered as a misrepresentation, it must:
Question 35
Question
Which of the following is NOT a type of misrepresentation?
Answer
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Fraudulent
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Innocent
-
Material
-
Negligent
Question 36
Question
A proposer applying for life insurance says that he is in good health when he knows that he is suffering from a serious illness is guilty of:
Question 37
Question
Fraudulent non-disclosure is also known as:
Answer
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Concealment
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Mitigation
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Negligence
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Subrogation
Question 38
Question
If innocent misrepresentation by the insured is present, the insurer has the right to:
Question 39
Question
An insurer can refuse to pay a particular claim but at the same time allow the contract to stand only if:
Question 40
Question
Which of the following is a method by which an insurer can provide the insured with the necessary indemnity?
Answer
-
Repair
-
Replacement
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Reinstatement
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All of the others
Question 41
Question
The principle of indemnity can be applied to which of the following classes of insurance?
1) Property insurance
2) Pecuniary insurance
3) Personal Accident insurance
4) Life insurance
Answer
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1) and 2)
-
2), 3), 4)
-
3) and 4)
-
All of them
Question 42
Question
When insuring machinery and equipment, which of the following is TRUE about how a second-hand market will affect the amount insured?
Answer
-
1) If there is a ready second-hand market, the indemnity is the cost of the second-hand item less any additional transport and installation costs
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2) If there is no second-hand market, the indemnity is the cost of repair or replacement less an allowance for wear and tear, if applicable
-
Both 1) and 2)
-
None of the others
Question 43
Question
Which of the following falls under Pecuniary Insurance?
Question 44
Question
Which of the following are factors that limit the amount of indemnity?
Answer
-
Average clause
-
Agreed Value clause
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Reinstatement clause
-
"New for old" clause
Question 45
Question
Which of the following are extensions that increase the amount of indemnity?
Answer
-
Franchise
-
Average clauses
-
Agreed Value clause
-
Excess
Question 46
Question
Oriental Trading Company had a fire in its insured shop. They claimed a loss of $5000 against its Fire Insurance policy. The loss adjuster who was instructed by the insurer was satisfied that the loss claimed was correct. However the loss adjuster reported that, in his opinion, there was at least $10,000 in stock but only $8000 in insurance cover. If the policy was NOT subject to average clause, how much should the insurer pay?
Question 47
Question
New World Trading Company had a fire in its insured shop. They claimed a loss of $9000 against the Fire Insurance policy. The loss adjuster who was instructed by the insurer was satisfied that the loss claimed was correct. However the loss adjuster reported that, in his opinion, there was at least $30,000 in stock but only $20,000 in insurance cover. If the policy was subject to average clause, how much should the insurer pay?
Question 48
Question
Which of the following is similar to an Excess but once the Excess is exceeded, the loss is payable in full?
Answer
-
Average Clause
-
Franchise
-
Limit of Liability
-
Deductible
Question 49
Question
Extensions are added to a policy, so that:
Answer
-
The insured can recover more than a strict indemnity
-
The insurer pays less than the strict indemnity
-
The premium is lower
-
The policy can be extended to cover for a longer period of time
Question 50
Question
Which of the following clauses is NOT categorized as an extension?