LM1 Test 3

  • Created by: ania.m128
  • Created on: 05-09-18 21:21

1. Some insurers allow intermediaries to act on their behalf by allowing them to take on risk within defined limits and criteria. What is this known as?

  • Substituted binders.
  • Delegated authority.
  • Third party authority.
  • Substituted authority.
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2. Who provides the financial backing and investment required by Lloyd's?

  • Members.
  • Members' agents.
  • Syndicates.
  • Approved persons.

3. Peter is applying for motor insurance and has disclosed that he has three unexpired speeding offences. He is aged 58 years and drives a small 1100cc car. In underwriting his insurance, what is the KEY concern likely to be?

  • Peril.
  • Severity.
  • Moral hazard.
  • Physical hazard.

4. What is the overall process of looking to reduce the impact of risk called?

  • Risk management.
  • Risk perception.
  • Risk reduction.
  • Risk transfer.

5. When would average be applied to an insurance claim?

  • When the risk is insured with more than one insurer.
  • When there is underinsurance.
  • When the insurer settles a claim but reserves the rigt to reclaim some of the loss from a third party.
  • Where the policy is subject to a franchise.

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