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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 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) Upon the request of any person(s) interested in the buildings.
B) When fraud or arson by the insured is suspected.
C) Where the building was destroyed by an explosion.
D) Where there is underinsurance.
2. What is the intended purpose of a subrogation waiver clause in an insurance po
A) The insurer's subrogation rights will not be exercised against certain parties associated with the insured.
B) The insured has a duty to ensure that the insurer's subrogation rights are maintained.
C) The doctrine of subrogation is excluded from the policy.
D) Cover is suspended whilst the insurer pursues an action for subrogation.
3. A claimant may possibly recover money transferred under an illegal contract when
A) the legal portion of the contract can be severed from the illega portion.
B) the contract is against public policy but not substantive law.
C) both parties to the contract are equal in wrongdoing.
D) the illegality makes the contract voidable rather than void.
4. 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) statute.
B) a condition subsequent to liability.
C) tort.
D) a condition precedent to liability.
5. 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 premium was paid by monthly installments.
B) no claim had been submitted or paid.
C) the misrepresentation was fraudulent.
D) the misrepresentation was innocent.
Solutions:
| Question # 1 Answer: A,B | Question # 2 Answer: A | Question # 3 Answer: C | Question # 4 Answer: A | Question # 5 Answer: D |






