IF3 REVISION QUESTIONS
A benefit policy is different to a liability policy because: - correct answer-It pays out on an
agreed event even if the insured does not sustain financial loss
A clothes manufacturer has a theft policy which contains a requirement from the insurer to
keep a security guard on the premises, this is known as: - correct answer-An express
warranty
A common exclusion to a theft policy is: - correct answer-Cash and bank notes
A firm of solicitors is applying for PI insurance, when rating the risk what information is the
underwriter most likely to find useful? - correct answer-The fees earned by the practise
A mid term increase in the value of a risk is an example of - correct answer-A variation to the
policy
A policy clause which calls for the insurer to submit the claim promptly is an example of what
kind of condition? - correct answer-A condition precedent to the liability
A receipt submitted in connection with a claim has been tampered with by an insured to
increase the amount shown, what course of action is the insurer most likely to take? - correct
answer-They will void the policy and refuse to pay out anything
A risk survey cannot determine the: - correct answer-Premium rating
A standard all risks policy covers all perils that are insurable under a standard fire policy and
special perils policy and: - correct answer-Accidental damage
A usual condition of the permanent total disablement section of a personal accident policy is
that: - correct answer-The disablement occurs within an agreed period of the accident date
Actual loss ratios relates to values that: - correct answer-Have not had any adjustments
factored in
Alan rings a call centre to obtain a quotation to insure his motor bike. What is the insurer
most likely to send to Alan if he wishes to proceed? - correct answer-A statement of fact
An analyst is looking at a large insurer, what ratio is he most likely to look at to establish the
quality of its profits excluding investment income? - correct answer-The combined operating
ratio (or the underwriting result)
An economic issue that affects the insurance market cycle is: - correct answer-Returns from
investments in the financial markets
, An example of operational level management data is that is produced to analyse - correct
answer-Accuracy of claims handling
An exclusion under the legal expenses section of a household buildings insurance and
contents policy is: - correct answer-Prosecution defence costs
An insurer is embarking on a new class of insurance, which type of reinsurance should they
arrange? - correct answer-Quota share
Ben is applying for insurance and has received a quotation valid for 30 days. To proceed he
must: - correct answer-Accept it within 30 days and the policy will come into effect at the
date the quotation is accepted
Business interruption insurance only applies after: - correct answer-A material loss under a
property insurance has occurred
Conditions that are covered by common law and therefore do not need to appear in the
policy are: - correct answer-Implied Conditions
Definition of a warranty: - correct answer-A promise made by the insured relating to the facts
or performance concerning a risk
Describe the Mesothelioma Act 2014 - correct answer-It applies a levy on all employers
liability policies (asbestos)
Does an insurer have an obligation to issue renewal notices? - correct answer-No
Emma has a standard household buildings insurance and has a recently had a claim
rejected, this claim was for: - correct answer-Damage to her garden wall caused by a falling
branch
Explain the concept of rate per Mille - correct answer-The price for every £1,000 exposure,
for example a rate of 2.5 would mean £2.50 every £1,000
How is the premium calculated? - correct answer-Apply the premium rate (rating of the
hazard) to the premium base (measure of exposure)
How much is money covered up to on premises out of working hours? - correct answer-£250
How much notice does a policyholder have to give for cancellations? - correct answer-None
If an insurance policy has a loss ratio of 103% how much will be paid out in claims by the
insurer for every £100 of the premium received? - correct answer-£103
If an insured has an accident that wasn't their fault, what will happen to their no claims
discount? - correct answer-It will be reinstated if the insurer recovers their outlay
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