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IF1 - Chapter 3 – Questions & answers graded A+
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IF1 - Chapter 3 – Questions & answers graded A+
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IF1 - Chapter 3 – Questions & answersgraded A+
What is most likely to happen if an insurance contract is found to be invalid because there was no
insurable interest at outset?
a. It will be cancelled at the point the error is identified.
b. It will be automatically void.
c. Either party can sue for costs associated with the breach.
d. Either party can sue for breach of contract. - correct answer ✔✔b. It will be automatically void.
When contract law is applied to insurance, consideration will normally be the:
a. completion of the underwriting process.
b. insurer sending out a proposal form.
c. premium payment.
d. insured completing the proposal form. - correct answer ✔✔c. premium payment.
Under FCA Conduct of Business rules, an insurer must provide any renewal terms to customers:
a. in good time before renewal.
b. shortly before renewal.
c. at least 15 days before renewal.
d. at least 30 days before renewal. - correct answer ✔✔a. in good time before renewal.
What is the document called that sets out the basis of the relationship between the intermediary and
the insurer?
a. Agency agreement.
b. Terms of business agreement.
c. Letter of authority.
d. Client agreement. - correct answer ✔✔b. Terms of business agreement.
, If Lin Li arranges her buildings insurance via a broker, the principal in law is:
a. the insurer.
b. the broker.
c. Lin Li and the broker jointly.
d. Lin Li. - correct answer ✔✔d. Lin Li.
Jess has arranged insurance through an independent insurance broker. In giving advice, the broker is
acting as the agent for:
a. the insurer.
b. Jess.
c. the FCA.
d. both Jess and the insurer. - correct answer ✔✔b. Jess.
By making a credit card payment to renew an insurance policy, what is the insured doing?
a. Providing conditional acceptance.
b. Making a counter offer to the insurer.
c. Making an offer to the insurer.
d. Providing an unconditional acceptance - correct answer ✔✔d. Providing an unconditional acceptance
Under the Distance Marketing Directive, within what period of time does a customer purchasing home
insurance via the internet have to cancel the policy without penalty?
a. 21 days.
b. 14 days.
c. 10 days.
d. 7 days. - correct answer ✔✔b. 14 days.
Having insured her car with the same insurer for the last four years, an insured's next renewal
documentation will include:
a. additional prescribed information encouraging her to shop around.
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