Nov 02, 2021 Step by Step Guide to Prepare for E05 Exam BrainDumps
Insurance Law (M05) E05 Real Exam Questions and Answers FREE Updated on 2021
NEW QUESTION 27
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 answerable to its shareholders or members.
- B. It is not treated as a separate legal entity.
- C. It is an organisation with a separate legal existence to its membership.
- D. It is a legal person representing one official position.
Answer: A,C
NEW QUESTION 28
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. an exception clause.
- B. an express term.
- C. a continuing warranty.
- D. a basis of the contract clause.
Answer: B,D
NEW QUESTION 29
Why may an insurer insert a continuing warranty into an insurance policy?
- A. To encourage good risk management by the insured throughout the policy period.
- B. To enable an insurer to charge an additional premium if the warranty is continually breached.
- C. To ensure that underinsurance is avoided at all times.
- D. To maintain the annual aggregate limit of liability throughout the policy period.
Answer: A
NEW QUESTION 30
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. Power of Attorney.
- D. Trust.
Answer: D
NEW QUESTION 31
When a defendant deliberately destroys possessions belonging to someone else, he has committed the tort(s) of
- A. trespass to goods, conversion and nuisance only,
- B. trespass to goods and conversion only.
- C. trespass to goods, conversion, nuisance and battery.
- D. trespass to goods only.
Answer: D
NEW QUESTION 32
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. The inadvertent non-cancellation of a policy when a new policy is taken out.
- B. A merger between two major insurance companies.
- 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 33
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 must return the claim settlement in exchange for the painting.
- B. Bill must buy the painting back.
- C. Bill may exercise an option to buy the painting back.
- D. Bill may keep the claim settlement and also keep the painting.
Answer: C
NEW QUESTION 34
A claimant may possibly recover money transferred under an illegal contract when
- A. the contract is against public policy but not substantive law.
- B. the illegality makes the contract voidable rather than void.
- C. the legal portion of the contract can be severed from the illega portion.
- D. both parties to the contract are equal in wrongdoing.
Answer: D
NEW QUESTION 35
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. When fraud or arson by the insured is suspected.
- B. Upon the request of any person(s) interested in the buildings.
- C. Where the building was destroyed by an explosion.
- D. Where there is underinsurance.
Answer: A,B
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. Liz's husband.
- B. Liz's independent financial adviser.
- C. a person holding a dominant position over Liz.
- D. a person holding a senior position at Liz's bank.
Answer: C
NEW QUESTION 37
Insurance agencies are usually created by way of
- A. unilateral agreement.
- B. implied agreement.
- C. express agreement.
- D. deed of agreement.
Answer: C
NEW QUESTION 38
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 would be maintained in full for the innocent party 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 composite policy.
- C. Cover for both parties would be invalidated as the cover is likely to be a joint policy.
- D. Cover for both parties would be invalidated as the cover is likely to be a composite policy.
Answer: C
NEW QUESTION 39
A professional indemnity policy includes a condition requiring that the insured must give prompt notice of any circumstance that could give rise to a claim. What type of condition is this?
- A. A condition precedent to liability.
- B. A collateral condition.
- C. A condition precedent to the contract.
- D. A suspensive condition.
Answer: A
NEW QUESTION 40
A property policy contains a condition regarding prompt loss notification. If the insured fails to comply with this condition, in practice, the insurer is likely to
- A. settle the claim and recover its outlay from the insured.
- B. settle the claim and cancel the insurance policy from inception.
- C. only avoid the claim if the delay has seriously prejudiced its investigation and handling of the claim.
- D. avoid the claim automatically due to the breach of the policy condition.
Answer: D
NEW QUESTION 41
Which divisional court of the High Court includes a Commercial Court?
- A. Chancery Division.
- B. Queen's Bench Division.
- C. Family Division.
- D. Partnership Division.
Answer: A
NEW QUESTION 42
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. £5,000,000
- B. £7,500,000
- C. £9,000,000
- D. £10,000,000
Answer: C
NEW QUESTION 43
Who is entitled to the surplus if a subrogation recovery from a negligent third party is greater than the amount the insurer has paid to the insured?
- A. It is shared between the insurer and the insured.
- B. The State
- C. The insurer only.
- D. The insured only.
Answer: D
NEW QUESTION 44
What is the most common for of corporation?
- A. Registered corporation.
- B. Statutory corporation.
- C. Chartered corporation.
- D. Corporation sole.
Answer: A
NEW QUESTION 45
What are the main objectives of the principle of insurable interest?
- A. To reduce physical 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 moral hazard and to discourage profiteering.
Answer: B
NEW QUESTION 46
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