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CII Examination element of M05 Insurance law Sample Questions:
1. 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) Bankruptcy of the principal.
B) Bankruptcy of the agent.
C) Disclosure of the name of the principal.
D) Death of the agent.
2. 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 an organisation with a separate legal existence to its membership.
C) It is a legal person representing one official position.
D) It is not treated as a separate legal entity.
3. A breach of warranty under the general law of contract legally entitles an injured party to
A) claim damages.
B) avoid the contract from the date of the breach.
C) obtain specific performance.
D) avoid the contract ab initio.
4. A household insurance policyholder leaves his home to go to work without setting the burglar alarm. Whilst he was out, his new tumble dryer overheats and causes fire damage to the kitchen. In what circumstances may the insurer legally reject a fire claim?
A) If there is a subrogation action against the manufacturer of the tumble dryer.
B) If the tumble dryer is covered by extended warranty insurance.
C) If the policyholder exaggerates the value of the claim.
D) If there is a breach of a warranty requiring the burglar alarm to be set.
5. 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) The insurer at all times.
B) Both the insurer and Paul at different times.
C) No one as Tim is not a party to the insurance contract.
D) Paul as it is a consumer contract.
Solutions:
| Question # 1 Answer: A,D | Question # 2 Answer: A,B | Question # 3 Answer: A | Question # 4 Answer: C | Question # 5 Answer: A |






