[Jan 25, 2024] New Real E05 Exam Dumps Questions
Pass Your E05 Exam Easily with Accurate Examination element of M05 Insurance law PDF Questions
NEW QUESTION # 26
The proximate cause of a loss is best described as the
- A. most dominant cause of the loss.
- B. most remote cause of the loss.
- C. final peril to cause the loss.
- D. first peril to cause the loss.
Answer: A
NEW QUESTION # 27
What is the most common for of corporation?
- A. Statutory corporation.
- B. Corporation sole.
- C. Chartered corporation.
- D. Registered corporation.
Answer: D
NEW QUESTION # 28
The principle of subrogation prevents a policyholder from profiting from
- A. claiming under both his insurance policy and against any negligent third party.
- B. retaining salvaged property.
- C. assigning abandonment rights to the insurer.
- D. submitting a full claim recovery under more than one insurance policy.
Answer: A
NEW QUESTION # 29
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. handle a claims notification within 14 days.
- B. not unreasonably reject an insured's claim.
- C. provide reasonable guidance to an insured to help him make a claim.
- D. settle a claim promptly once settlement has been agreed.
Answer: B,C,D
NEW QUESTION # 30
What are the main objectives of the principle of insurable interest?
- A. To reduce moral hazard and to discourage wagering.
- B. To reduce moral hazard and to discourage profiteering.
- C. To reduce physical hazard and to discourage wagering.
- D. To reduce physical hazard and to discourage profiteering.
Answer: A
NEW QUESTION # 31
In terms of private motor insurance, a renewal offer can be accepted
- A. only by written communication.
- B. by any third party.
- C. only by the proposer personally.
- D. by the proposer acting in reliance of the offer.
Answer: D
NEW QUESTION # 32
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 independent financial adviser.
- D. Liz's husband.
Answer: A
NEW QUESTION # 33
As a result of a breach of good faith under a commercial insurance policy, the insurer avoided the policy as a whole, but was NOT permitted to retain the premium because
- A. the misrepresentation was fraudulent.
- B. the premium was paid by monthly installments.
- C. no claim had been submitted or paid.
- D. the misrepresentation was innocent.
Answer: D
NEW QUESTION # 34
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. Lien.
- B. Trust.
- C. Coinsurance.
- D. Power of Attorney.
Answer: B
NEW QUESTION # 35
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. The insurer only.
- B. The State
- C. The insured only.
- D. It is shared between the insurer and the insured.
Answer: C
NEW QUESTION # 36
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. £9,000,000
- B. £7,500,000
- C. £5,000,000
- D. £10,000,000
Answer: A
NEW QUESTION # 37
According to statute law, an unfair term in a consumer insurance contract is defined as one which
- A. causes a significant imbalance in the parties' rights to the detriment of the consumer.
- B. does not restrict liability for death or personal injury.
- C. has been individually negotiated and is to the detriment of either one of the parties.
- D. provides insurance where the scope of cover is narrow compared to the premium charged.
Answer: A
NEW QUESTION # 38
A riot results in a shop being damaged and the shopowner's insurer settling the claim. A subrogation right enabling the insurer to sue the police authority arises under
- A. tort.
- B. a condition precedent to liability.
- C. statute.
- D. a condition subsequent to liability.
Answer: C
NEW QUESTION # 39
Which divisional court of the High Court includes a Commercial Court?
- A. Chancery Division.
- B. Family Division.
- C. Queen's Bench Division.
- D. Partnership Division.
Answer: A
NEW QUESTION # 40
A warranty in Emily's personal travel insurance policy states that cash must be kept in a locked safe. Whilst on holiday, a storm destroys her hotel and its contents. When Emily completes a claim form for loss of money, she admits that her cash was NOT locked in the safe. What will be the insurer's likely response to her claim for the lost money?
- A. Avoid the policy ab initio.
- B. Pay the claim in full.
- C. Reject the claim for breach of warranty.
- D. Make an ex-gratia payment.
Answer: B
NEW QUESTION # 41
For this question more than 1 option is correct. You must select fill the correct options to gain the mark. In what circumstances would an agency agreement be automatically terminated?
- A. Disclosure of the name of the principal.
- B. Bankruptcy of the agent.
- C. Death of the agent.
- D. Bankruptcy of the principal.
Answer: C,D
NEW QUESTION # 42
In respect of a life assurance policy, the duty to take reasonable care NOT to make a misrepresentation ends when the proposer
- A. signs and submits the completed proposal form to the insurer.
- B. forms the contract with the insurer.
- C. dies and his estate submits a claim to the insurer.
- D. assigns the contract to a third party.
Answer: B
NEW QUESTION # 43
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. Where there is underinsurance.
- C. When fraud or arson by the insured is suspected.
- D. Upon the request of any person(s) interested in the buildings.
Answer: C,D
NEW QUESTION # 44
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 keep the claim settlement and also keep the painting.
- D. Bill may exercise an option to buy the painting back.
Answer: D
NEW QUESTION # 45
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. £3,000
- B. £6,000
- C. £15,000
- D. £5,000
Answer: D
NEW QUESTION # 46
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