The Insurance market comprises:
1, 2, 3
An example of a Seller in an insurance market is/are:
Life Insurance Association
Which of the following is not classified as Commercial General Insurance?
Professional Indemnity Insurance
Marine Cargo Insurance
Personal Liability Insurance
Work Injury Compensation Insurance
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.
It is mandatory for Takaful insurance to be compliant with Shariah and the Islamic law.
Which of the following is an example of pure risk?
Running a business
Driving a car
Which of the following is NOT an example of fundamental risk?
Which of the following is NOT a category of any type of insurance contract?
Contract of Insurability
Contract of Indemnity
Which of the following is NOT commonly insured under a valued contract?
Personal Accident Insurance
Which of the following is commonly classified as a contract of indemnity?
Which of the following is commonly classified as a benefit contract?
Which of the following types of loss is NOT insurable?
Loss that is accidental
Loss that is definite
Loss that creates a burden
Loss that happens to a large number of insureds at the same time
What is a peril?
An event or occurrence which causes a loss, an injury or damage
An event or occurrence that creates or increases the risk of loss
An event or occurrence whereby people, through their careless or irresponsible action creates or increases the risk of loss
All of the others
In insurance, which of the following is NOT a type of hazard?
None of the others
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.
Which of the following is NOT a method of risk control?
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:
Which of the following clauses are usually used in a contract so that one party will assume legal liability on behalf of another party?
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?
Non-insurance transfer methods are usually used in which type of contacts?
Motor Vehicle Insurance
Which of the following are benefits of insurance?
Enhance provision of credit facilities
Stimulates business enterprise
What is insurable interest?
The legal right to insure
The amount of compensation
The real reason for the loss
What is subrogation?
The legal right to recovery
Which of the following is NOT TRUE about 'common law'?
It is sometimes called 'unwritten law'
It consists of generally accepted rules and requirements that a civilized society will consider automatic
It can be modified or abolished by statute law
It cannot be modified by the mutual agreement of parties to a contract
Which of the following is NOT essential to insurable interest?
There must be some property, rights, interest or potential liability capable of being insured
The property, rights, interest or potential liability must be the subject matter of the insurance
The insured must not stand in a relationship, recognized by law, with the subject matter of the insurance
The proposer must benefit from the continued existence of the subject matter of the contract or be prejudiced by its loss
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?
Non-life and non-marine contracts
Which of the following relationships do not have an insurable interest?
Husband and wife
Employee and employer
Debtor and creditor
The doctrine of utmost good faith imposes which of the following duties on the parties to the contract?
1) A duty not to misrepresent any matter relating to the insurance
2) A duty to disclose all material facts relating to the contract
Both 1) and 2)
Which of the following can be influenced by a material fact?
An underwriter's decision to accept a risk
Terms and conditions of the insurance contract
Facts of law do not need to be disclosed as material facts because everyone is expected to know the law.
Duty of disclosure commences at all of the following times EXCEPT the:
Beginning of negotiations
Inception of policy
Duty of disclosure arises under:
1) Common law
2) The policy terms
Duty of disclosure is only applicable to the:
Both Insured and Insurer
For a fact to be considered as a misrepresentation, it must:
induce the contract
not be made by a party to the contract
not cause some loss or disadvantage to the person who has relied upon it
Which of the following is NOT a type of misrepresentation?
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:
Both misrepresentation and non-disclosure
Fraudulent non-disclosure is also known as:
If innocent misrepresentation by the insured is present, the insurer has the right to:
Keep any premium paid
Allow the contract to stand
An insurer can refuse to pay a particular claim but at the same time allow the contract to stand only if:
1) The insured is guilty of fraudulent misrepresentation
2) The insured is guilty of innocent misrepresentation
Which of the following is a method by which an insurer can provide the insured with the necessary indemnity?
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
1) and 2)
2), 3), 4)
3) and 4)
All of them
When insuring machinery and equipment, which of the following is TRUE about how a second-hand market will affect the amount insured?
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
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
Which of the following falls under Pecuniary Insurance?
Personal Accident insurance
Which of the following are factors that limit the amount of indemnity?
Agreed Value clause
"New for old" clause
Which of the following are extensions that increase the amount of indemnity?
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?
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?
Which of the following is similar to an Excess but once the Excess is exceeded, the loss is payable in full?
Limit of Liability
Extensions are added to a policy, so that:
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
Which of the following clauses is NOT categorized as an extension?
"New for Old" Clause
Limit of Liability Clause
Agreed Value Clause