Insurance Legal and Regulatory (IF1) Exam (IF1) Free Practice Test

Question 1

A firm of insurance brokers invite Stuart. an underwriter who handles its account, on a Caribbean cruise with his family. How should Stuart react to this invitation in order to comply with the Chartered Insurance Institute's Code of Ethics?

A. Decline to avoid any suggestion he is being compromised.

B. Accept on the basis that this is an accepted business practice.

C. Accept only on the basis that the cost is less than £1.000.

D. Decline as this is against the Financial Ombudsman Service regulations.

Correct Answer: A

Question 2

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. Frequency.

C. Certainty.

D. Statutory requirements.

Correct Answer: A

Question 3

Under the Consumer Rights Act 2015. a clause in a household insurance policy may be considered unfair if it

A. discriminates against one of the persons insured on the grounds of nationality, gender or sexual orientation only.

B. causes a significant imbalance in the parties' rights and obligations arising under the contract, to the disadvantage of the insured.

C. allows any party other than the insured to enforce the insurer's obligations under the policy.

D. imposes unreasonable obligations on the insurer in terms of costs or expenses that must be paid in addition to the amount of any loss.

Correct Answer: B

Question 4

How does insurable interest arise, if at all. when an insurer arranges reinsurance?

A. Insurable interest does not arise.

B. Insurable interest is created by statute.

C. The insurer is considered to have insurable interest by virtue of its liability to pay claims.

D. The policyholder is considered to have assigned the insurable interest to the insurer.

Correct Answer: C

Question 5

The main purpose of the fair treatment of customers initiative is to

A. make firms more competitive.

B. ensure all firms have a similar service standard.

C. build consumer confidence in the financial services industry.

D. apply fixed times for responding to claims and complaints.

Correct Answer: C

Question 6

For which professional is professional indemnity insurance compulsory by statute?

A. A chartered surveyor. .

B. A loss adjuster,

C. A loss assessor.

D. A solicitor.

Correct Answer: D

Question 7

Alex decides to insure his factory. In doing this he is primarily

A. protecting his business against certainty of loss.

B. reducing his moral hazard.

C. transferring the risk to the insurer.

D. reducing his physical hazard.

Correct Answer: C

Question 8

Sunita suffers a loss and makes a claim under her household contents insurance policy. When must insurable interest exist for her claim to be valid?

A. At the time of the loss only.

B. At the time of the proposal.

C. At policy inception and at the time of the loss.

D. At policy inception only.

Correct Answer: C

Question 9

An insured is temporarily disabled due to illness and unable to work. During this period, what type of insurance policy will typically pay a weekly benefit for up to two years?

A. An employers' liability insurance policy.

B. A critical illness insurance policy.

C. A personal accident and sickness insurance policy.

D. A medical expenses insurance policy.

Correct Answer: C

Question 10

A firm of insurance brokers holds client records on an index card system and does NOT intend to computerise this information. In what circumstances, if any, will these records be covered by the Data Protection Act 2018?

A. In no circumstances.

B. Only if the records include details of race.

C. In all circumstances.

D. Only if the records include dates of birth.

Correct Answer: C

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CII Insurance Legal and Regulatory (IF1) (IF1) Free Practice Test