Insurance Law (M05) E05 Dumps | Updated Oct 02, 2021 - TrainingQuiz
Master 2021 Latest The Questions Insurance Law (M05) and Pass E05 Real Exam!
NEW QUESTION 16
What is the most common for of corporation?
- A. Chartered corporation.
- B. Statutory corporation.
- C. Corporation sole.
- D. Registered corporation.
Answer: D
NEW QUESTION 17
Tim is a local insurance broker. He has authority to receive premiums for a personal lines insurer and earns commission from the insurer for sales. Paul, an elderly customer, asked Tim for advice regarding his personal insurance requirements and to assist with completing the proposal form for household insurance. In these circumstances, who, if anyone, is Tim's principal?
- A. Both the insurer and Paul at different times.
- B. Paul as it is a consumer contract.
- C. The insurer at all times.
- D. No one as Tim is not a party to the insurance contract.
Answer: C
NEW QUESTION 18
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. provide reasonable guidance to an insured to help him make a claim.
- C. handle a claims notification within 14 days.
- D. settle a claim promptly once settlement has been agreed.
Answer: A,B,D
NEW QUESTION 19
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 inception of the policy only.
- D. At both inception of the policy and at the time of the loss.
Answer: B
NEW QUESTION 20
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. Apply any terms it would have applied if the misrepresentation had not taken place.
- B. Reject the claim, but maintain the policy.
- C. Avoid the contract, refuse all claims and keep the premium.
- D. Reduce the claim amount in proportion to the premium it would have charged.
Answer: A,D
NEW QUESTION 21
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 senior position at Liz's bank.
- B. a person holding a dominant position over Liz.
- C. Liz's husband.
- D. Liz's independent financial adviser.
Answer: B
NEW QUESTION 22
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. When fraud or arson by the insured is suspected.
- D. Where there is underinsurance.
Answer: B,C
NEW QUESTION 23
According to statute, a term under a consumer personal accident insurance policy may potentially be considered unfair if the insurer
- A. applies a specific exclusion within the policy wording.
- B. provides coverage that is more restrictive than that of other insurers.
- C. requires notification of a claim within a very short time period.
- D. imposes a premium loading.
Answer: C
NEW QUESTION 24
The proximate cause of a loss is best described as the
- A. final peril to cause the loss.
- B. most dominant cause of the loss.
- C. first peril to cause the loss.
- D. most remote cause of the loss.
Answer: B
NEW QUESTION 25
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. £6,000
- B. £5,000
- C. £3,000
- D. £15,000
Answer: B
NEW QUESTION 26
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 may exercise an option to buy the painting back.
- B. Bill must buy the painting back.
- C. Bill must return the claim settlement in exchange for the painting.
- D. Bill may keep the claim settlement and also keep the painting.
Answer: A
NEW QUESTION 27
What are the main objectives of the principle of insurable interest?
- A. To reduce moral hazard and to discourage profiteering.
- B. To reduce moral hazard and to discourage wagering.
- C. To reduce physical hazard and to discourage wagering.
- D. To reduce physical hazard and to discourage profiteering.
Answer: B
NEW QUESTION 28
Ambiguous terms in a household insurance contract are generally construed against the
- A. insurer due to the contra proferentem rule.
- B. policyholder due to the noscitur a sociis rule.
- C. policyholder due to the literal rule.
- D. insurer due to the ejusdem generis rule.
Answer: A
NEW QUESTION 29
How can an agency relationship be best described?
- A. A person has ratified another party's action.
- B. 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.
- C. A person has transferred his obligations under a contract to another party.
- D. A person has the authority to act on behalf of another party.
Answer: D
NEW QUESTION 30
The principle of subrogation prevents a policyholder from profiting from
- A. retaining salvaged property.
- B. assigning abandonment rights to the insurer.
- C. claiming under both his insurance policy and against any negligent third party.
- D. submitting a full claim recovery under more than one insurance policy.
Answer: C
NEW QUESTION 31
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