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Insurance Law (M05) Dumps E05 Exam for Full Questions - Exam Study Guide
NEW QUESTION 25
Insurance agencies are usually created by way of
- A. deed of agreement.
- B. implied agreement.
- C. express agreement.
- D. unilateral agreement.
Answer: C
NEW QUESTION 26
Adam was bitten by a stray dog in Africa. He washed his wound in a pond and a week later he became very ill with a high temperature. Initially, the local hospital treated him for malaria and later treated him for the fever following the dog bite. Adam died in hospital. What is the proximate cause of his death?
- A. The delay in obtaining the correct medical treatment.
- B. The original physical injury of the dog bite.
- C. The unhygienic washing of the dog bite.
- D. The delay in seeking medical treatment.
Answer: B
NEW QUESTION 27
In terms of private motor insurance, a renewal offer can be accepted
- A. only by the proposer personally.
- B. only by written communication.
- C. by any third party.
- D. by the proposer acting in reliance of the offer.
Answer: D
NEW QUESTION 28
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. not unreasonably reject an insured's claim.
- B. settle a claim promptly once settlement has been agreed.
- C. provide reasonable guidance to an insured to help him make a claim.
- D. handle a claims notification within 14 days.
Answer: A,B,C
NEW QUESTION 29
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. Coinsurance.
- B. Lien.
- C. Trust.
- D. Power of Attorney.
Answer: C
NEW QUESTION 30
Two liability policies with different insurers cover the same loss of £15,000,000. The limit of liability is
£10,000,000 under policy X and £20,000,000 under policy Y. Neither policy has a non-contribution clause.
What amount will policy Y contribute towards the claim payment?
- A. £10,000,000
- B. £7,500,000
- C. £9,000,000
- D. £5,000,000
Answer: C
NEW QUESTION 31
What is the intended purpose of a subrogation waiver clause in an insurance po
- A. The insured has a duty to ensure that the insurer's subrogation rights are maintained.
- B. Cover is suspended whilst the insurer pursues an action for subrogation.
- C. The insurer's subrogation rights will not be exercised against certain parties associated with the insured.
- D. The doctrine of subrogation is excluded from the policy.
Answer: C
NEW QUESTION 32
The proximate cause of a loss is best described as the
- A. most remote cause of the loss.
- B. first peril to cause the loss.
- C. final peril to cause the loss.
- D. most dominant cause of the loss.
Answer: D
NEW QUESTION 33
In what circumstances is abandonment automatic under a marine hull insurance policy?
- A. The insured has performed an action of abandonment.
- B. The insured has sent a formal notice of abandonment.
- C. The constructive total loss of the vessel.
- D. The actual total loss of the vessel.
Answer: D
NEW QUESTION 34
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?
- A. It is an organisation with a separate legal existence to its membership.
- B. It is a legal person representing one official position.
- C. It is answerable to its shareholders or members.
- D. It is not treated as a separate legal entity.
Answer: A,C
NEW QUESTION 35
For this question more than 1 option is correct. You must select all the correct options to gain the mark. What are the main sources of new English Law?
- A. International treaties.
- B. Official law reports.
- C. Legislation.
- D. Case law.
Answer: C,D
NEW QUESTION 36
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. a person holding a dominant position over Liz.
- B. a person holding a senior position at Liz's bank.
- C. Liz's husband.
- D. Liz's independent financial adviser.
Answer: A
NEW QUESTION 37
A breach of warranty under the general law of contract legally entitles an injured party to
- A. avoid the contract ab initio.
- B. avoid the contract from the date of the breach.
- C. obtain specific performance.
- D. claim damages.
Answer: D
NEW QUESTION 38
At what stage is insurable interest required for a marine cargo insurance policy?
- A. Throughout the duration of the contract.
- B. At the time of the loss only.
- C. At both inception of the policy and at the time of the loss.
- D. At inception of the policy only.
Answer: B
NEW QUESTION 39
John owns stock that he intentionally insured for £15,000, although the full value of the stock is £18.000. His insurance policy has no excess and is subject to a pro rata condition of average. In the event of water damaging
£6.000 of John's stock, how much will the insurer pay for a valid claim after the application of average?
- A. £15,000
- B. £5,000
- C. £3,000
- D. £6,000
Answer: B
NEW QUESTION 40
For this question more than 1 option is correct. You must select all the correct options to gain the mark. How may double insurance arise?
- A. A merger between two major insurance companies.
- B. The inadvertent non-cancellation of a policy when a new policy is taken out.
- C. An overlap in cover between two different types of insurance policy.
- D. A deliberate attempt to obtain the proceeds of two policies.
Answer: C,D
NEW QUESTION 41
In the tort of negligence, a primary victim of nervous shock is a class of person who suffers psychiatric injury
- A. through fear for the safety of another person involved in an accident which he witnessed.
- B. as a result of stress or harassment at work.
- C. as a result of grief or sorrow for the loss of a person with whom he had a close relationship.
- D. through fear for his own safety in an accident.
Answer: D
NEW QUESTION 42
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 43
A married couple have equal shares in a property and are insured under a buildings insurance policy. What is the likely position in law of a breach of good faith by one party, which was unknown to the other party?
- A. Cover for both parties would be invalidated as the cover is likely to be a joint policy.
- B. Cover would be maintained in full for the innocent party as the cover is likely to be a joint policy
- C. Cover for both parties would be invalidated as the cover is likely to be a composite policy.
- D. Cover would be maintained in full for the innocent party as the cover is likely to be a composite policy.
Answer: A
NEW QUESTION 44
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
- A. a basis of the contract clause.
- B. an express term.
- C. an exception clause.
- D. a continuing warranty.
Answer: A,B
NEW QUESTION 45
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