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CII Examination element of M05 Insurance law Sample Questions:

1. Bill owned a painting which was insured under a policy containing a first refusal clause. The painting was stolen and Bill's claim was settled, but several months later the painting was recovered by the police. As a consequence, what is Bill's position under his insurance policy?

A) Bill may exercise an option to buy the painting back.
B) Bill may keep the claim settlement and also keep the painting.
C) Bill must buy the painting back.
D) Bill must return the claim settlement in exchange for the painting.


2. For this question more than 1 option is correct. You must select all the correct options to gain the mark.
The Insurance: Conduct of Business sourcebook (ICOBS) rules in respect of claims handling specify that an insurer must

A) settle a claim promptly once settlement has been agreed.
B) provide reasonable guidance to an insured to help him make a claim.
C) not unreasonably reject an insured's claim.
D) handle a claims notification within 14 days.


3. Within what time period, from the date when the damage first began, does the owner of an office block have a right to sue the builder for negligent construction work?

A) 6 years.
B) 15 years.
C) 9 years.
D) 3 years.


4. In what circumstances is abandonment automatic under a marine hull insurance policy?

A) The insured has performed an action of abandonment.
B) The constructive total loss of the vessel.
C) The actual total loss of the vessel.
D) The insured has sent a formal notice of abandonment.


5. For this question more than 1 option is correct. You must select all the correct options to gain the mark. What are the characteristics of a corporation aggregate?

A) It is a legal person representing one official position.
B) It is not treated as a separate legal entity.
C) It is answerable to its shareholders or members.
D) It is an organisation with a separate legal existence to its membership.


Solutions:

Question # 1
Answer: A
Question # 2
Answer: A,B,C
Question # 3
Answer: D
Question # 4
Answer: C
Question # 5
Answer: C,D

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