Question 1

Which of the following is NOT a material fact requiring disclosure by an applicant to an insurer?

Accepted Answer

A) The health of the applicant. 
B) Whether the applicant has a criminal record. 
C) Whether the applicant has had financial problems in the past. 
D) A fact that reduces the risk. 
A) The health of the applicant. 
B) Whether the applicant has a criminal record. 
C) Whether the applicant has had financial problems in the past. 
D) A fact that reduces the risk.

Question 2

All contracts of insurance are arranged through intermediaries.

Accepted Answer

A) True 
 B)False

Question 3

Life insurance policies are treated as ongoing contracts and therefore not subject to renewal.

Accepted Answer

A) True 
 B)False

Question 4

Make a list of the differences between the regulation of general insurance and the regulation of life insurance.

Accepted Answer

The regulation of general insurance and

Question 5

Which of the following is NOT a duty of an insurance agent or broker?

Accepted Answer

A) To keep proper books and records. 
B) To maintain confidentiality. 
C) To disclose any commission received in addition to their remuneration. 
D) To act in person and in good faith. 
A) To keep proper books and records. 
B) To maintain confidentiality. 
C) To disclose any commission received in addition to their remuneration. 
D) To act in person and in good faith.

Question 6

Public liability is an example of general insurance.

Accepted Answer

A) True 
 B)False

Question 7

Insurance contracts by their very nature are indemnity contracts.

Accepted Answer

A) True 
 B)False

Question 8

A party insured under a general insurance contract is obligated to disclose to the insurer:

Accepted Answer

A) all facts that could influence the insurer as to whether or not to accept the risk. 
B) all facts known to be material by the insured. 
C) all facts known to be material by a reasonable person in the position of the insured. 
D) all material facts. 
A) all facts that could influence the insurer as to whether or not to accept the risk. 
B) all facts known to be material by the insured. 
C) all facts known to be material by a reasonable person in the position of the insured. 
D) all material facts.

Question 9

The aim of a contract of indemnity insurance is:

Accepted Answer

A) to assist the insured to rebuild his business or home. 
B) to put the insured back to the position they occupied before the occurrence of the loss. 
C) to assist the insured to make a profit out of their loss. 
D) to assist the insured against unforseen business or economic losses. 
A) to assist the insured to rebuild his business or home. 
B) to put the insured back to the position they occupied before the occurrence of the loss. 
C) to assist the insured to make a profit out of their loss. 
D) to assist the insured against unforseen business or economic losses.

Question 10

Payment of an insurance premium to an insurance broker or agent discharges the liability of the insured to the insurer.

Accepted Answer

A) True 
 B)False

Question 11

To whom may an insured apply in relation to a dispute with a general insurer?

Accepted Answer

A) Life Insurance Complaints Service Ltd. 
B) Insurance Enquiries and Complaints Ltd. 
C) General Insurance Division Ombudsman. 
D) Insurance Broker's Dispute Facility. 
A) Life Insurance Complaints Service Ltd. 
B) Insurance Enquiries and Complaints Ltd. 
C) General Insurance Division Ombudsman. 
D) Insurance Broker's Dispute Facility.

Question 12

A life insurance policy is a contract of indemnity.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements about the duty of disclosure is NOT correct?

Accepted Answer

A) The duty applies at the time of the contract and at renewal. 
B) An insurer must inform the insured in writing of their duty of disclosure. 
C) The insured must disclose everything they know,suspect or believe to be relevant. 
D) The duty applies to all co-insureds. 
A) The duty applies at the time of the contract and at renewal. 
B) An insurer must inform the insured in writing of their duty of disclosure. 
C) The insured must disclose everything they know,suspect or believe to be relevant. 
D) The duty applies to all co-insureds.

Question 14

An insurer is responsible for the actions of their agents provided they are acting within the scope of their authority.

Accepted Answer

A) True 
 B)False

Question 15

Subrogation applies to all contracts of insurance.

Accepted Answer

A) True 
 B)False

Question 16

Does an innocent misrepresentation in an application for general insurance entitle the insurer to refuse to pay a claim?

Accepted Answer

A) No,but they can reduce their liability to nil if they can show that would not have entered into the contract if the misrepresentation had not been made. 
B) Yes,the insurer can refuse,but only if the insurer is in a different position than they would have been had the misrepresentation not been made. 
C) Yes,the insurer is entitled to avoid the contract entirely. 
D) No,the insurer cannot refuse to pay the claim. 
A) No,but they can reduce their liability to nil if they can show that would not have entered into the contract if the misrepresentation had not been made. 
B) Yes,the insurer can refuse,but only if the insurer is in a different position than they would have been had the misrepresentation not been made. 
C) Yes,the insurer is entitled to avoid the contract entirely. 
D) No,the insurer cannot refuse to pay the claim.

Question 17

Where an insured party intentionally understates their age on a life insurance policy,the insurer has the option to:

Accepted Answer

A) reduce the premiums payable and repay the overpaid premiums with interest. 
B) cancel the policy. 
C) increase the sum insured proportionately. 
D) reduce the sum insured proportionately. 
A) reduce the premiums payable and repay the overpaid premiums with interest. 
B) cancel the policy. 
C) increase the sum insured proportionately. 
D) reduce the sum insured proportionately.

Question 18

An employee of an insurance company who completes a proposal form on behalf of an intending insured is acting as:

Accepted Answer

A) an independent agent. 
B) the agent of the insured. 
C) a principal in his/her own right. 
D) the agent of the insurer. 
A) an independent agent. 
B) the agent of the insured. 
C) a principal in his/her own right. 
D) the agent of the insurer.

Question 19

In the context of an insurance policy,'market value' means the cost of the item when purchased new in the market.

Accepted Answer

A) True 
 B)False

Question 20

Explain why it is important for an insured to disclose all material facts.

Accepted Answer

Insurance contacts are contracts of the

Exam 23: Insurance

Which of the following is NOT a material fact requiring disclosure by an applicant to an insurer?

All contracts of insurance are arranged through intermediaries.

Life insurance policies are treated as ongoing contracts and therefore not subject to renewal.

Make a list of the differences between the regulation of general insurance and the regulation of life insurance.

Which of the following is NOT a duty of an insurance agent or broker?

Public liability is an example of general insurance.

Insurance contracts by their very nature are indemnity contracts.

A party insured under a general insurance contract is obligated to disclose to the insurer:

The aim of a contract of indemnity insurance is:

Payment of an insurance premium to an insurance broker or agent discharges the liability of the insured to the insurer.

To whom may an insured apply in relation to a dispute with a general insurer?

A life insurance policy is a contract of indemnity.

Which of the following statements about the duty of disclosure is NOT correct?

An insurer is responsible for the actions of their agents provided they are acting within the scope of their authority.

Subrogation applies to all contracts of insurance.

Does an innocent misrepresentation in an application for general insurance entitle the insurer to refuse to pay a claim?

Where an insured party intentionally understates their age on a life insurance policy,the insurer has the option to:

An employee of an insurance company who completes a proposal form on behalf of an intending insured is acting as:

In the context of an insurance policy,'market value' means the cost of the item when purchased new in the market.

Explain why it is important for an insured to disclose all material facts.

Legal Foundations

Legal Systems

How Law Is Made: Precedentstatute Law

Civil Liability: the Law of Torts and Negligence

Applications of Negligence to Business

Introduction to Contracts

Agreement Between the Parties

Intention to Create Legal Relations

Consideration

Capacity of the Parties

Genuine Consent

Is the Contract Legal

Terms of the Contract

Rights and Liabilities of the Parties,discharge and Remedies

Remedies in Contract

Statutory Consumer Guarantees and the Australian Consumer Law

General and Specific Consumer Protections Under the Acl

Introduction to Companies and Incorporated Associations

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Choosing a Business Entity

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Sale of Goodsbusiness to Business

Property and Mortgages

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Criminal Law in a Business Context

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