Question 1

If an insured signs an agreement with a hold harmless clause, this may prevent the insurer from

Options :

A : disclosing details to a third party.

B : reinsuring the risk.

C : pursuing subrogation rights.

D : increasing the premium.

Answer: C

Question 2

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?

Options :

A : Uncertainty.

B : Statutory requirements.

C : Frequency.

D : Certainty.

Answer: A

Question 3

The purpose of the EU solvency requirements for insurers and intermediaries is to

Options :

A : create a standard format for the presentation of accounting data.

B : introduce monitoring procedures by the Prudential Regulation Authority.

C : provide authorisation to transact insurance business.

D : strengthen the financial security of the insurer or intermediary.

Answer: A

Question 4

What legally recognised financial relationship must exist, between a policyholder and the items being insured, to constitute a valid household contents insurance policy?

Options :

A : Insurable interest.

B : Risk indemnity.

C : Vicarious liability.

D : Delegated authority.

Answer: A

Question 5

A policyholder achieves peace of mind when insuring his car by

Options :

A : eliminating the risk of loss.

B : reducing the chance of a loss occurring.

C : preventing the chance of a loss occurring.

D : transferring the risk to the insurer.

Answer: D

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