IF1 Practice Test Questions Answers Updated 100 Questions
IF1 dumps & Certificate in Insurance Sure Practice with 100 Questions
NEW QUESTION 56
If an insured signs an agreement with a hold harmless clause, this may prevent the insurer from
- A. reinsuring the risk.
- B. increasing the premium.
- C. disclosing details to a third party.
- D. pursuing subrogation rights.
Answer: D
NEW QUESTION 57
The capital requirements of insurers and intermediaries are set out by
- A. Money Laundering Regulations.
- B. Prudential Regulation Authority rules.
- C. Proceeds of Crime Act 2002.
- D. Data Protection legislation.
Answer: B
NEW QUESTION 58
When Susan applied for a new household contents insurance policy, she was obliged to disclose her extensive claims history. Such details are normally known as
- A. indemnity.
- B. material circumstances.
- C. warranties.
- D. contractual terms.
Answer: B
NEW QUESTION 59
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. £300.000
- B. £150.000
- C. £500.000
- D. £200.000
Answer: D
NEW QUESTION 60
A policyholder achieves peace of mind when insuring his car by
- A. preventing the chance of a loss occurring.
- B. reducing the chance of a loss occurring.
- C. transferring the risk to the insurer.
- D. eliminating the risk of loss.
Answer: C
NEW QUESTION 61
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 Consumer Rights Act 2015.
- B. The Contracts (Rights of Third Parties) Act 1999.
- C. The Data Protection Act 2018.
- D. The Criminal Justice Act 1993.
Answer: A
NEW QUESTION 62
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. Uncertainty.
- B. Statutory requirements.
- C. Frequency.
- D. Certainty.
Answer: A
NEW QUESTION 63
What is the current rate of Insurance Premium Tax for a motor insurance policy?
- A. 12%
- B. 9.5%
- C. 20%
- D. 10%
Answer: A
NEW QUESTION 64
What legally recognised financial relationship must exist, between a policyholder and the items being insured, to constitute a valid household contents insurance policy?
- A. Insurable interest.
- B. Vicarious liability.
- C. Risk indemnity.
- D. Delegated authority.
Answer: A
NEW QUESTION 65
John and his wife arrange a household contents insurance policy in joint names with insurer A for a sum insured of £10,000. His wife arranges a second policy on the same basis with insurer B for a sum insured of
£20,000. Both policies have identical terms and conditions. What is insurer A's liability if a valid claim of
£3,000 is subsequently made?
- A. £1,500
- B. £2,000
- C. £1,000
- D. £3,000
Answer: C
NEW QUESTION 66
When should a direct insurer advise a policyholder in writing of its complaints-handling procedure, to comply with regulatory requirements?
- A. Within 7 days of a complaint being made.
- B. Within 30 days of cover being incepted.
- C. At the lime of a claim.
- D. At the time of the sale or immediately afterwards.
Answer: D
NEW QUESTION 67
What type of reduction is sometimes applied to the replacement cost of an item under an insurance policy claim in order to reflect the application of indemnity?
- A. Loss of interest.
- B. Wear and tear.
- C. An excess.
- D. Brokerage.
Answer: B
NEW QUESTION 68
Peter currently has no penalty points on his driving licence, although he was convicted of a minor motoring offence eight years ago. Why does Peter NOT need to disclose this to his motor insurer?
- A. It represents a moral hazard.
- B. It represents a physical hazard.
- C. It is a spent conviction.
- D. It is information that would not influence an underwriter.
Answer: C
NEW QUESTION 69
The main purpose of the fair treatment of customers initiative is to
- A. make firms more competitive.
- B. build consumer confidence in the financial services industry.
- C. ensure all firms have a similar service standard.
- D. apply fixed times for responding to claims and complaints.
Answer: B
NEW QUESTION 70
John has a whole of life policy and has recently been diagnosed with cancer. When, if at all. must he disclose this to his insurer?
- A. Immediately, but only if the diagnosis is terminal.
- B. Immediately, irrespective of prognosis.
- C. He does not need to disclose this.
- D. At the date of the next premium payment.
Answer: C
NEW QUESTION 71
Under the regulator's training and competency rules, a general insurance employee carrying out a non-WiFID business activity
- A. for 20 years after the employee stops carrying out the activity.
- B. for 3 years after the employee stops carrying out the activity.
- C. indefinitely.
- D. for 10 years after the employee stops carrying out the activity.
Answer: B
NEW QUESTION 72
Which general rule does the Contracts (Rights of Third Parties) Act 1999 seek to modify?
- A. Subrogation.
- B. Contra proferentem.
- C. Privity of contract.
- D. Good faith.
Answer: C
NEW QUESTION 73
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. particular.
- B. financial.
- C. pure.
- D. speculative.
Answer: D
NEW QUESTION 74
An insurance company has employed an individual from a rival firm to carry out a similar job. At which stage would the regulatory requirements for retaining training and competence records first apply to the new employee, if at all?
- A. Within 18 months of employment.
- B. When the employee first has contact with members of the public.
- C. From the initial interview.
- D. It would not apply, as the employee is already fully competent.
Answer: B
NEW QUESTION 75
Under common law. when does the insured's duly of fair presentation cease with regard to declarations that do NOT affect policy cover?
- A. When a claim is submitted.
- B. At renewal.
- C. When a claim is paid.
- D. When the policy contract lakes effect.
Answer: B
NEW QUESTION 76
What are the other key components of risk apart from uncertainty?
- A. Financial losses.
- B. Financial losses and speculation.
- C. The level of risk, peril and hazard.
- D. Low severity losses and low frequency losses.
Answer: C
NEW QUESTION 77
If a firm is said to be risk averse, this means that it
- A. carries its own risk wherever possible.
- B. undertakes its own risk management research.
- C. tenders its insurance needs to the market.
- D. arranges insurance protection wherever possible.
Answer: A
NEW QUESTION 78
Lloyd's is known as a subscription market because
- A. a number of syndicates accept a share of the same risk.
- B. a fee must be paid.
- C. if an insurer writes a particular class, he is expected to subscribe to the majority of these risks.
- D. the underwriter assigns his signature individually to each risk.
Answer: A
NEW QUESTION 79
In order for a contract to be legally enforceable, what further action is required after offer and acceptance?
- A. Delivery of goods or services concerned.
- B. Exchange of consideration between the two parties.
- C. Provision of written terms and conditions.
- D. Witnessing by a third party.
Answer: B
NEW QUESTION 80
The main function of an insurance broker is to
- A. introduce business lo a particular insurer.
- B. act as the agent of the insurer.
- C. negotiate claims.
- D. provide independent advice to clients.
Answer: D
NEW QUESTION 81
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