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| Section | Objectives |
|---|---|
| Topic 1: Formation of Insurance Contracts | - Core insurance principles
|
| Topic 2: Law of Torts | - Principles of tort law
|
| Topic 3: Insurance Contract Terms and Vitiating Factors | - Factors affecting validity
|
| Topic 4: Law of Contract | - Contract formation and operation
|
| Topic 5: Subrogation and Contribution | - Recovery rights and sharing of losses
|
| Topic 6: Law of Agency and Insurance | - Agency relationships
|
| Topic 7: Nature and Sources of English Law and Legal Persons | - Nature and sources of English law
|
| Topic 8: Insurance Claims | - Claims process and legal principles
|
| Topic 9: Indemnity and Loss Measurement | - Principle of indemnity
|
1. What are the main objectives of the principle of insurable interest?
A) To reduce physical hazard and to discourage profiteering.
B) To reduce physical hazard and to discourage wagering.
C) To reduce moral hazard and to discourage wagering.
D) To reduce moral hazard and to discourage profiteering.
2. Which of the following is a characteristic of a contract of insurance?
A) It requires both parties to meet in person
B) It is always a contract of adhesion
C) It must be written in a formal language
D) It involves a promise of a return on investment
3. A person insures her own life under a life insurance policy but does so expressly for the benefit of another. To facilitate this, which type of arrangement is most commonly established?
A) Lien.
B) Power of Attorney.
C) Coinsurance.
D) Trust.
4. What is the basis of settlement under a new for old insurance policy if a television is stolen?
A) The original cost in full.
B) The replacement cost, less wear and tear.
C) The original cost, less wear and tear.
D) The replacement cost in full.
5. A household insurance policyholder leaves his home to go to work without setting the burglar alarm. Whilst he was out, his new tumble dryer overheats and causes fire damage to the kitchen. In what circumstances may the insurer legally reject a fire claim?
A) If there is a breach of a warranty requiring the burglar alarm to be set.
B) If the policyholder exaggerates the value of the claim.
C) If there is a subrogation action against the manufacturer of the tumble dryer.
D) If the tumble dryer is covered by extended warranty insurance.
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: B | Question # 3 Answer: D | Question # 4 Answer: B | Question # 5 Answer: B |
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