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NEW QUESTION 17
A warranty in Emily's personal travel insurance policy states that cash must be kept in a locked safe. Whilst on holiday, a storm destroys her hotel and its contents. When Emily completes a claim form for loss of money, she admits that her cash was NOT locked in the safe. What will be the insurer's likely response to her claim for the lost money?

• A. Make an ex-gratia payment.
• B. Avoid the policy ab initio.
• C. Reject the claim for breach of warranty.
• D. Pay the claim in full.

Answer: D

 

NEW QUESTION 18
A professional indemnity policy includes a condition requiring that the insured must give prompt notice of any circumstance that could give rise to a claim. What type of condition is this?

• A. A collateral condition.
• B. A condition precedent to liability.
• C. A suspensive condition.
• D. A condition precedent to the contract.

Answer: B

 

NEW QUESTION 19
When, if at all, does the duty of fair presentation of a risk apply after a non-consumer insurance contract has been formed?

• A. On submission of a claim.
• B. It does not apply as the duty is to take reasonable care not to make a misrepresentation.
• C. Where there is a variation in the insured risk.
• D. From the date of a breach of warranty.

Answer: C

 

NEW QUESTION 20
Dan made a financial arrangement on behalf of Liz. However, Liz had the arrangement set aside by the court on the basis that she had been unduly influenced by Dan. To establish undue influence, the court must have specifically identified Dan as

• A. Liz's husband.
• B. a person holding a dominant position over Liz.
• C. a person holding a senior position at Liz's bank.
• D. Liz's independent financial adviser.

Answer: B

 

NEW QUESTION 21
Why may an insurer insert a continuing warranty into an insurance policy?

• A. To ensure that underinsurance is avoided at all times.
• B. To maintain the annual aggregate limit of liability throughout the policy period.
• C. To encourage good risk management by the insured throughout the policy period.
• D. To enable an insurer to charge an additional premium if the warranty is continually breached.

Answer: C

 

NEW QUESTION 22
For this question more than 1 option is correct. You must select all the correct options to gain the mark.
A proposer for private motorcycle insurance carelessly states the motorcycle's engine capacity as 500cc when in fact it is 1500cc. A policy is issued by the insurer on this basis. In the event of a valid claim causing damage to the motorcycle, what potential remedies are available to the insurer under the Consumer Insurance (Disclosure and Representations) Act 2012?

• A. Avoid the contract, refuse all claims and keep the premium.
• B. Reduce the claim amount in proportion to the premium it would have charged.
• C. Apply any terms it would have applied if the misrepresentation had not taken place.
• D. Reject the claim, but maintain the policy.

Answer: B,C

 

NEW QUESTION 23
For this question more than 1 option is correct. You must select ail the correct options to gain the mark.
In what circumstances does the Fires Prevention (Metropolis) Act 1774 require insurance companies to ensure that claims monies are used to rebuild or reinstate buildings destroyed or damaged by fire?

• A. Where the building was destroyed by an explosion.
• B. Upon the request of any person(s) interested in the buildings.
• C. Where there is underinsurance.
• D. When fraud or arson by the insured is suspected.

Answer: B,D

 

NEW QUESTION 24
When a defendant deliberately destroys possessions belonging to someone else, he has committed the tort(s) of

• A. trespass to goods, conversion and nuisance only,
• B. trespass to goods and conversion only.
• C. trespass to goods, conversion, nuisance and battery.
• D. trespass to goods only.

Answer: D

 

NEW QUESTION 25
In terms of private motor insurance, a renewal offer can be accepted

• A. only by written communication.
• B. by the proposer acting in reliance of the offer.
• C. by any third party.
• D. only by the proposer personally.

Answer: B

 

NEW QUESTION 26
How can an agency relationship be best described?

• A. A person, who has paid another party under a contract, has the right to stand in the place of that other party and avail himself of the rights and remedies of that party.
• B. A person has ratified another party's action.
• C. A person has the authority to act on behalf of another party.
• D. A person has transferred his obligations under a contract to another party.

Answer: C

 

NEW QUESTION 27
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

• A. settle a claim promptly once settlement has been agreed.
• B. provide reasonable guidance to an insured to help him make a claim.
• C. not unreasonably reject an insured's claim.
• D. handle a claims notification within 14 days.

Answer: A,B,C

 

NEW QUESTION 28
What is the maximum contingency fee percentage under a damages-based agreement that can be charged by a solicitor for personal injury cases and employment tribunal cases respectively?

• A. 35% for personal injury cases and 25% for employment tribunal cases.
• B. 35% for both cases.
• C. 25% for personal injury cases and 35% for employment tribunal cases.
• D. 50% for both cases.

Answer: C

 

NEW QUESTION 29
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?

• A. Bill must return the claim settlement in exchange for the painting.
• B. Bill may exercise an option to buy the painting back.
• C. Bill must buy the painting back.
• D. Bill may keep the claim settlement and also keep the painting.

Answer: B

 

NEW QUESTION 30
A property policy contains a condition regarding prompt loss notification. If the insured fails to comply with this condition, in practice, the insurer is likely to

• A. settle the claim and recover its outlay from the insured.
• B. only avoid the claim if the delay has seriously prejudiced its investigation and handling of the claim.
• C. avoid the claim automatically due to the breach of the policy condition.
• D. settle the claim and cancel the insurance policy from inception.

Answer: C

 

NEW QUESTION 31
In what circumstances is abandonment automatic under a marine hull insurance policy?

• A. The insured has sent a formal notice of abandonment.
• B. The insured has performed an action of abandonment.
• C. The constructive total loss of the vessel.
• D. The actual total loss of the vessel.

Answer: D

 

NEW QUESTION 32
The test of the materiality of facts in an insurance contract is defined according to the opinion of a

• A. reasonable person.
• B. diligent broker.
• C. prudent underwriter.
• D. honest proposer.

Answer: C

 

NEW QUESTION 33
According to statute law, an unfair term in a consumer insurance contract is defined as one which

• A. has been individually negotiated and is to the detriment of either one of the parties.
• B. does not restrict liability for death or personal injury.
• C. causes a significant imbalance in the parties' rights to the detriment of the consumer.
• D. provides insurance where the scope of cover is narrow compared to the premium charged.

Answer: C

 

NEW QUESTION 34
What is the most common for of corporation?

• A. Statutory corporation.
• B. Chartered corporation.
• C. Registered corporation.
• D. Corporation sole.

Answer: C

 

NEW QUESTION 35
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Pass Your Insurance Law (M05) E05 Exam on Dec 01, 2021 with 52 Questions: https://www.vce4dumps.com/E05-valid-torrent.html

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