[Jan-2022] CII IF1 Official Cert Guide PDF
Exam IF1: Insurance Legal and Regulatory (IF1) Exam - ExamcollectionPass
NEW QUESTION 57
When motor insurance is purchased directly with an insurer, what is usually the main disadvantage to the policyholder in the event of a claim compared to purchasing indirectly through a different marketing channel?
- A. The policy excess is higher.
- B. There is no intermediary to provide assistance.
- C. The risk of losing a no claims discount is greater.
- D. A courtesy car is not available.
Answer: B
NEW QUESTION 58
Harry owns a sports car valued at £1.000 and agrees to sell it to Ben for £500. Ben discusses this with his solicitor who states the contract is
- A. unenforceable unless Harry signs a disclaimer acknowledging the consideration as acceptable.
- B. enforceable but only if Harry does not refute the contract within six months of the contract date.
- C. unenforceable as the consideration is inadequate.
- D. enforceable as consideration does not need to be adequate.
Answer: D
NEW QUESTION 59
Joel buys a house in a flood plain, but it has NOT flooded for 10 years. In purchasing insurance, Joel is managing what element of risk?
- A. Statutory requirements.
- B. Frequency.
- C. Uncertainty.
- D. Certainty.
Answer: C
NEW QUESTION 60
The requirement 10 notify the fitting of a more powerful engine under a motor insurance policy is an example of a policy wording modifying the principle of
- A. subrogation.
- B. contribution.
- C. good faith.
- D. indemnity.
Answer: C
NEW QUESTION 61
A survey of a car repairers reveals a spray booth exists by an unguarded paraffin space beater. Also, a day's supply of paint is kept within the building and waste is removed daily from a metal bin. What will the underwriter perceive as the main physical hazard?
- A. The waste bin.
- B. The spray booth.
- C. The unguarded paraffin space heater.
- D. The paint.
Answer: C
NEW QUESTION 62
What type of risk is a widespread natural disaster?
- A. A pure risk.
- B. A particular risk.
- C. A speculative risk.
- D. A fundamental risk.
Answer: D
NEW QUESTION 63
Who can place business directly with a Lloyd's underwriter?
- A. Lloyd's brokers only.
- B. Lloyd's agents.
- C. Lloyd's brokers and other intermediaries.
- D. Members of the public.
Answer: C
NEW QUESTION 64
The purpose of Insurance Premium Tax is to
- A. reimburse for claims of insolvent insurers
- B. pay for flood defences.
- C. fund the Association of British Insurers.
- D. raise revenue for the Government.
Answer: D
NEW QUESTION 65
The Principles for Business slate that all customers should be treated
- A. to a minimum standard.
- B. with due respect.
- C. equally.
- D. fairly.
Answer: D
NEW QUESTION 66
How would an employee benefit directly from her employer's business interruption insurance if its factory was forced to close temporarily due to flood damage?
- A. By payment of an early retirement pension.
- B. By continuation of her wages.
- C. By payment of a redundancy lump sum.
- D. By compensation for loss of bonus.
Answer: B
NEW QUESTION 67
An intermediary needs to place a large properly risk, however the insurance company can only write 25% of the risk. What type of insurance arrangement would the intermediary require to complete the risk?
- A. Dual insurance.
- B. Coinsurance.
- C. Reinsurance.
- D. Self-insurance.
Answer: B
NEW QUESTION 68
John wishes to insure his friend's house. Why would an insurer refuse to provide a quotation?
- A. He does not live in the house.
- B. He does not have any insurable interest.
- C. He does not have any subrogation rights.
- D. His name is not on the mortgage.
Answer: B
NEW QUESTION 69
In the event of an insurer including an unclear clause in its household insurance policy, which statute could the policyholder rely upon if there was a contractual dispute?
- A. The Criminal Justice Act 1993.
- B. The Contracts (Rights of Third Parties) Act 1999.
- C. The Consumer Rights Act 2015.
- D. The Data Protection Act 2018.
Answer: C
NEW QUESTION 70
Insurers and intermediaries are required to adhere to solvency requirements as stipulated by the
- A. European Union.
- B. Association of British Insurers.
- C. Financial Services Compensation Scheme.
- D. Financial Ombudsman Service.
Answer: A
NEW QUESTION 71
Under the Consumer Rights Act 2015. a clause in a household insurance policy may be considered unfair if it
- A. allows any party other than the insured to enforce the insurer's obligations under the policy.
- B. discriminates against one of the persons insured on the grounds of nationality, gender or sexual orientation only.
- C. imposes unreasonable obligations on the insurer in terms of costs or expenses that must be paid in addition to the amount of any loss.
- D. causes a significant imbalance in the parties' rights and obligations arising under the contract, to the disadvantage of the insured.
Answer: D
NEW QUESTION 72
How is Insurance Premium Tax collected within the UK?
- A. By the insurer on individual insurance contracts.
- B. By HM Revenue & Customs on the whole general account.
- C. By HM Revenue & Customs on individual insurance contracts.
- D. By the insurer on the whole general and life accounts.
Answer: D
NEW QUESTION 73
The main purpose of the fair treatment of customers initiative is to
- A. ensure all firms have a similar service standard.
- B. make firms more competitive.
- C. apply fixed times for responding to claims and complaints.
- D. build consumer confidence in the financial services industry.
Answer: D
NEW QUESTION 74
Sunita suffers a loss and makes a claim under her household contents insurance policy. When must insurable interest exist for her claim to be valid?
- A. At the time of the proposal.
- B. At policy inception and at the time of the loss.
- C. At policy inception only.
- D. At the time of the loss only.
Answer: B
NEW QUESTION 75
An investor is unable to obtain insurance to protect his potential losses while trading on the stock market because the category of risk is deemed to be
- A. speculative.
- B. pure.
- C. particular.
- D. financial.
Answer: A
NEW QUESTION 76
Which principle of insurance prevents a member of the public from taking out an insurance policy on the life of a celebrity in the hope of receiving a windfall on the celebrity's death?
- A. Proximate cause.
- B. Good faith.
- C. Indemnity.
- D. Insurable interest.
Answer: D
NEW QUESTION 77
An agent, acting outside the terms of her agency agreement, binds her principal to a contract with a third party who has reason to believe that the agent can act in that capacity. On what basis, if al all, is the principal bound by the agent's actions?
- A. Necessity.
- B. Apparent authority.
- C. Consent.
- D. Not at all.
Answer: B
NEW QUESTION 78
An owner of a building reduces its sum insured from £1,000.000 lo £500.000 to save premiums. A Tire causes
£300,000 damage to the building. If the building has a reinstatement value of £750,000 and average is applied, how much will the insured receive in settlement?
- A. £200.000
- B. £300.000
- C. £150.000
- D. £500.000
Answer: A
NEW QUESTION 79
From April 2019. a small company with nine employees is in dispute with its insurer and wishes to refer the matter to the Financial Ombudsman Service (FOS). The FOS is only permitted lo deal with the dispute if the insured's turnover does NOT exceed
- A. £1,000,000
- B. £3,500,000
- C. £6,000,000
- D. £6,500,000
Answer: A
NEW QUESTION 80
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