LM1 Test3 2018

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  • Created by: Anna
  • Created on: 27-08-18 23:52
What is the overall process of looking to reduce the impact of risk called?
Risk management.
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These are all examples of the actions an insured can take to prevent loss and control their risk, EXCEPT:
Reducing an insurance policy excess.
2 of 48
Risk is normally assessed in terms of:
Frequency and severity.
3 of 48
What are risks which are localised in their cause and effect known as?
Particular risks.
4 of 48
What does the term 'fortuitous event' refer to?
An accidental or unexpected event.
5 of 48
Why is the 'law of large numbers' an important concept for insurers?
It enables them to accurately predict the likely levels of claims.
6 of 48
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?
Moral hazard.
7 of 48
The concept of physical hazard is best described as:
The physical characteristics of the risk.
8 of 48
What is the main reason for different types of insurance being compulsory on the UK?
To ensure there are funds available to compensate innocent victims.
9 of 48
Is it important with employers' liability insurance to be able to trace previous employers in the event of there being a claim. What is the name of the database which is used to achieve this?
The Employers' Liability Tracing Office.
10 of 48
Pete has arranged insurance cover through an insurance intermediary. If he hasn't recieved the policy document, he should be aware that:
This makes no difference, the contract is still in place.
11 of 48
The MOST likley reson that Pippa is unable to insure her brother's car is because of the lack of:
Insurable interest.
12 of 48
Those who propose for insurance must disclose all material facts they are aware of. This describes the principle of:
A good faith.
13 of 48
Under the Insurance (Disclosure and Representations) Act 2012, what must an insurer prove, if anything, if it is to successfully decline a claim from a consumer?
That any non-disclosure was deliberate or reckless and they would not have entered into contract or would have done so on different terms.
14 of 48
In the London Market, who draws up a slip?
The broker.
15 of 48
Eddie has cancelled his motor insurance two months into the policy and under the policy wording, he is due a refund of some of the premium paid. Why is this MOST likley to be less than a pro rata return of premium?
Because the insurer still needs to recoup the set-up costs of the policy.
16 of 48
In the event of a claim, the insurer will look to establish the primary cause of the loss so that they can check wheather this peril is covered by the insurance policy. What is this insurance principle known as?
Proximate cause.
17 of 48
When would average be applied to an insurance claim?
When there is underinsurance.
18 of 48
For the principle of contribution to apply, a number of factors need to be present. What would NOT typically be one of these?
Both insurers' policies have to be identical.
19 of 48
What type of insurance policy is NOT subject to the principle of subrogation?
Personal accident and sickness.
20 of 48
A ship owner is concerned about the costs that may incur in relation to the pollution caused if cargo was to escape. What type of insurance do they need?
Marine liabilities.
21 of 48
What is the offshore energy insurance market commonly called?
Upstream business.
22 of 48
Who will usually purchase contractors' all risks insurance for a construction site?
The main contractors.
23 of 48
A visitor to a shop slips on a wet floor and sues the shop owner for negligence. What type of non-marine liability insurance could meet any resulting costs of this action?
Public liability.
24 of 48
If an insured has bought contingency insurance, this would NOT typically include:
Personal accident insurance.
25 of 48
Under an aviation policy, what type of liability would NOT typically be covered?
Damage to baggage outside the place in transit on the ground.
26 of 48
Reinsurance of an individual risk is known as:
Facultative reinsurance.
27 of 48
When premium rates within an insurance market are falling, the market is described as a(n):
Soft market.
28 of 48
Syndicates are commonly referred to as:
Annual ventures.
29 of 48
Who provides the financial backing and investment required by Lloyd's?
Members.
30 of 48
What is an insurance company that is owned by its policyholders known as?
A mutual company.
31 of 48
In the London Market, the insured should recieve evidence of the insurance cover within:
30 days.
32 of 48
Under the Financial Services Act 2012, what is the Financial Court Authority responsible for?
Regulating the cinduct of all authorised firms.
33 of 48
What does the Financial Conduct Authority have to report to on an annual basis?
Parliament.
34 of 48
If a UK-based insurer wishes to write insurance buisness in the USA, it should be aware that:
It will need to seek multiple state permissions.
35 of 48
What are the primary rules which have been created by Lloyd's known as?
Byelaws and regulation.
36 of 48
What is the main purpose of Solvency II?
To harmonise EU regulation and to increase the level of assets insurers must hold.
37 of 48
The US government sanctions impose restrictions on conducting buisness with Cuba. These rules would apply to:
London Market insurer with a US parent.
38 of 48
Under UK data protection legislation, what is NOT a right of a data subject?
The right to ask an insurer to delete legitimate information held on them.
39 of 48
The Bribery Act 2010 covers four offences. What is NOT one of these?
Failure to report suspicions of bribery.
40 of 48
In the Lloyd's Market, the retail broker is the agent of the:
Client.
41 of 48
Jamie works for a broker in the London Market. It has been asked to place a risk that was recieved from an overseas client via their broker. Jamie's broker is known as a:
Wholesale broker.
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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?
Delagated authority.
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In the London Market, what is the final confirmation that creates the contrast between the insured and insurer is known as?
Binding the risk.
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What is the Lloyd's database called that records the details of insurances and facilitates th movement of premiums?
Xchanging Ins-sure Services (XIS).
45 of 48
The PRIMARY role of the underwriter is to:
Accept or decline the risk.
46 of 48
In the Lloyd's market, what is meant by the term 'subscription basis'?
More than one insurer participates in a risk.
47 of 48
A follower is unwilling to accept a risk at the rate quoted by the leader. If this is the case:
They may charge more but the leader and previous followers connot increase their rate as a result.
48 of 48

Other cards in this set

Card 2

Front

These are all examples of the actions an insured can take to prevent loss and control their risk, EXCEPT:

Back

Reducing an insurance policy excess.

Card 3

Front

Risk is normally assessed in terms of:

Back

Preview of the front of card 3

Card 4

Front

What are risks which are localised in their cause and effect known as?

Back

Preview of the front of card 4

Card 5

Front

What does the term 'fortuitous event' refer to?

Back

Preview of the front of card 5
View more cards

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