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M05 Practice Exam Questions and Answers

Insurance law (IL) Exam

Last Update 1 week ago
Total Questions : 118

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Question # 1

For this question more than 1 option is correct. You must select all the correct options to gain the mark.

The Insurance: Conduct of Business sourcebook (ICOBS) rules in respect of claims handling specify that an insurer must

Options:

A.  

settle a claim promptly once settlement has been agreed.

B.  

handle a claims notification within 14 days.

C.  

provide reasonable guidance to an insured to help him make a claim.

D.  

not unreasonably reject an insured's claim.

Discussion 0
Question # 2

In a chain of events, the proximate cause of a loss is always the

Options:

A.  

only event contributing towards the loss.

B.  

last event before the loss occurs.

C.  

dominant event leading to the loss.

D.  

only event which is not excluded by the terms of the policy.

Discussion 0
Question # 3

Bill owned a painting which was insured under a policy containing a first refusal clause. The painting was stolen and Bill's claim was settled, but several months later the painting was recovered by the police. As a consequence, what is Bill's position under his insurance policy?

Options:

A.  

Bill may exercise an option to buy the painting back.

B.  

Bill must return the claim settlement in exchange for the painting.

C.  

Bill must buy the painting back.

D.  

Bill may keep the claim settlement and also keep the painting.

Discussion 0
Question # 4

A nurse working shifts is regularly disturbed by her neighbour givig brass instrument lessons in Ihe evenings. She is tired and losing concentration at work but is NOT at risk of losing her job. What remedy can be provided by equity as an alternative source of law to common law?

Options:

A.  

Specific performance

B.  

Punitive damages.

C.  

General damages.

D.  

An injunction.

Discussion 0
Question # 5

What is the role of a condition precedent in an insurance policy?

Options:

A.  

It defines the scope of coverage for the policyholder

B.  

It is a requirement that must be met before the insurer is liable for a claim

C.  

It outlines exclusions from coverage

D.  

It ensures that the insurer will cover all risks associated with a policy

Discussion 0
Question # 6

For this question more than 1 option is correct. You must select fill the correct options to gain the mark. In what circumstances would an agency agreement be automatically terminated?

Options:

A.  

Disclosure of the name of the principal.

B.  

Bankruptcy of the principal.

C.  

Bankruptcy of the agent.

D.  

Death of the agent.

Discussion 0
Question # 7

According to statute, a term under a consumer personal accident insurance policy may potentially be considered unfair if the insurer

Options:

A.  

requires notification of a claim within a very short time period.

B.  

provides coverage that is more restrictive than that of other insurers.

C.  

imposes a premium loading.

D.  

applies a specific exclusion within the policy wording.

Discussion 0
Question # 8

For this question more than 1 option is correct. You must select all the correct options to gain the mark. What are the characteristics of a corporation aggregate?

Options:

A.  

It is an organisation with a separate legal existence to its membership.

B.  

It is not treated as a separate legal entity.

C.  

It is answerable to its shareholders or members.

D.  

It is a legal person representing one official position.

Discussion 0
Question # 9

What is the intended purpose of a subrogation waiver clause in an insurance po

Options:

A.  

The doctrine of subrogation is excluded from the policy.

B.  

The insured has a duty to ensure that the insurer's subrogation rights are maintained.

C.  

Cover is suspended whilst the insurer pursues an action for subrogation.

D.  

The insurer's subrogation rights will not be exercised against certain parties associated with the insured.

Discussion 0
Question # 10

For this question more than 1 option is correct. You must select all the correct options to gain the mark. In a consumer insurance policy, a warranty can arise as

Options:

A.  

an express term.

B.  

a continuing warranty.

C.  

an exception clause.

D.  

a basis of the contract clause.

Discussion 0
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