[Oct-2023] IF1 Pre-Exam Practice Tests | Exam Questions and Answers for Certificate in Insurance Study Guide

Insurance Legal and Regulatory (IF1) Exam Certification Sample Questions

CII IF1: Insurance Legal and Regulatory (IF1) exam is an essential qualification for professionals looking to build a career in the insurance industry. It is a challenging exam that requires a comprehensive understanding of the legal and regulatory framework of the industry. However, with sufficient preparation and a commitment to learning, candidates can pass IF1 exam and unlock opportunities for career progression in the dynamic and challenging world of insurance.

 

NEW QUESTION # 56
Which general rule does the Contracts (Rights of Third Parties) Act 1999 seek to modify?

• A. Good faith.
• B. Privity of contract.
• C. Contra proferentem.
• D. Subrogation.

Answer: B

NEW QUESTION # 57
An intermediary needs to place a large properly risk, however the insurance company can only write 25% of the risk. What type of insurance arrangement would the intermediary require to complete the risk?

• A. Dual insurance.
• B. Coinsurance.
• C. Self-insurance.
• D. Reinsurance.

Answer: B

NEW QUESTION # 58
Which typo of insurer is owned by multiple policyholders?

• A. A composite insurer.
• B. A mutual insurer.
• C. A captive insurer.
• D. A proprietary insurer.

Answer: B

NEW QUESTION # 59
A firm of insurance brokers holds client records on an index card system and does NOT intend to computerise this information. In what circumstances, if any, will these records be covered by the Data Protection Act 2018?

• A. Only if the records include dates of birth.
• B. In all circumstances.
• C. In no circumstances.
• D. Only if the records include details of race.

Answer: B

NEW QUESTION # 60
Under the Consumer Rights Act 2015. a clause in a household insurance policy may be considered unfair if it

• A. imposes unreasonable obligations on the insurer in terms of costs or expenses that must be paid in addition to the amount of any loss.
• B. discriminates against one of the persons insured on the grounds of nationality, gender or sexual orientation only.
• C. allows any party other than the insured to enforce the insurer's obligations under the policy.
• D. causes a significant imbalance in the parties' rights and obligations arising under the contract, to the disadvantage of the insured.

Answer: D

NEW QUESTION # 61
The main function of an insurance broker is to

• A. act as the agent of the insurer.
• B. provide independent advice to clients.
• C. negotiate claims.
• D. introduce business lo a particular insurer.

Answer: B

NEW QUESTION # 62
The Financial Ombudsman Service will make a ruling on a dispute between

• A. an insurance broker and an insurer.
• B. a private individual and an insurer.
• C. an insurer and a reinsurer.
• D. a third party and the insurer against whom he is making a liability claim.

Answer: B

NEW QUESTION # 63
What type of organisation is the British Insurance Brokers' Association?

• A. A specialist regulator.
• B. A trade body.
• C. An educational body.
• D. A public limited company.

Answer: B

NEW QUESTION # 64
Sunita suffers a loss and makes a claim under her household contents insurance policy. When must insurable interest exist for her claim to be valid?

• A. At policy inception only.
• B. At the time of the proposal.
• C. At policy inception and at the time of the loss.
• D. At the time of the loss only.

Answer: C

NEW QUESTION # 65
What is the current rate of Insurance Premium Tax for a motor insurance policy?

• A. 9.5%
• B. 12%
• C. 20%
• D. 10%

Answer: B

NEW QUESTION # 66
In order for a contract to be legally enforceable, what further action is required after offer and acceptance?

• A. Witnessing by a third party.
• B. Delivery of goods or services concerned.
• C. Exchange of consideration between the two parties.
• D. Provision of written terms and conditions.

Answer: C

NEW QUESTION # 67
Lloyd's is known as a subscription market because

• A. if an insurer writes a particular class, he is expected to subscribe to the majority of these risks.
• B. the underwriter assigns his signature individually to each risk.
• C. a number of syndicates accept a share of the same risk.
• D. a fee must be paid.

Answer: C

NEW QUESTION # 68
An agent, acting outside the terms of her agency agreement, binds her principal to a contract with a third party who has reason to believe that the agent can act in that capacity. On what basis, if al all, is the principal bound by the agent's actions?

• A. Apparent authority.
• B. Consent.
• C. Not at all.
• D. Necessity.

Answer: A

NEW QUESTION # 69
Self-insurance arises when a

• A. number of insurers agree to collectively insure a particular risk in agreed proportions.
• B. policyholder finds that he has inadvertently taken out more than one policy covering the same risk.
• C. policyholder decides to insure proportions of his property with different insurers.
• D. company decides to set aside a fund to pay losses that may occur.

Answer: D

NEW QUESTION # 70
The main purpose of the fair treatment of customers initiative is to

• A. make firms more competitive.
• B. build consumer confidence in the financial services industry.
• C. apply fixed times for responding to claims and complaints.
• D. ensure all firms have a similar service standard.

Answer: B

NEW QUESTION # 71
For which professional is professional indemnity insurance compulsory by statute?

• A. A loss assessor.
• B. A chartered surveyor. .
• C. A solicitor.
• D. A loss adjuster,

Answer: C

NEW QUESTION # 72
Michael, an insurance company employee, strongly suspects that a recent transaction involved money laundering but decides NOT to report his suspicions to anyone. How is this treated under the current Money Laundering Regulations?

• A. It is a criminal offence.
• B. It is a disciplinary offence under the Banking Code.
• C. It is a civil offence.
• D. It is a disciplinary offence dealt with by the Money Laundering Joint Steering Committee.

Answer: D

NEW QUESTION # 73
If a proposer has failed to fully answer a question on a proposal form, the insurer is deemed to have waived its rights to this information because it

• A. does not have the right to ask the proposer for more information.
• B. did not request further information.
• C. has statistics on similar risks.
• D. should be able to underwrite the risk based on the information already provided.

Answer: B

NEW QUESTION # 74
A storm blew down the wall of a limber building. The failing wall broke electrical wiring, which short-circuited and the resultant sparks caused a fire. The lire brigade used water to put out the fire and the water caused damage to the unburnt contents. What is the proximate cause of the damage to the unburnt contents?

• A. The fire.
• B. The falling wall.
• C. The storm.
• D. The water damage.

Answer: C

NEW QUESTION # 75
What are the other key components of risk apart from uncertainty?

• A. The level of risk, peril and hazard.
• B. Financial losses.
• C. Financial losses and speculation.
• D. Low severity losses and low frequency losses.

Answer: A

NEW QUESTION # 76
Barbara owns a factory employing 20 people. What insurance is she required to hold by law?

• A. Products liability insurance.
• B. Professional indemnity insurance.
• C. Public liability insurance.
• D. Employers' liability insurance.

Answer: D

NEW QUESTION # 77
The principle of indemnity is the

• A. placing of the insured, after a loss, in the same financial position as enjoyed immediately before the loss.
• B. obligation of the insurer to pay all valid claims according to the terms and conditions of the policy.
• C. obligation of the insurer to provide a maximum sum insured or limit of liability.
• D. placing of the insured, at expiry of a policy, in the same financial position as enjoyed at inception.

Answer: A

NEW QUESTION # 78
A survey of a car repairers reveals a spray booth exists by an unguarded paraffin space beater. Also, a day's supply of paint is kept within the building and waste is removed daily from a metal bin. What will the underwriter perceive as the main physical hazard?

• A. The waste bin.
• B. The paint.
• C. The unguarded paraffin space heater.
• D. The spray booth.

Answer: C

NEW QUESTION # 79
When completing a proposal form, Tom declares that he has two spent speeding convictions. How, if at all, will the spent convictions affect an underwriter's decision to write the risk?

• A. They will be classed as relevant information and will affect the premium.
• B. They will only be considered if Tom had a further speeding conviction in the last 12 months.
• C. They will not be considered as this is not an underwriting factor in motor insurance risk assessment.
• D. They will be ignored in accordance with the provisions of the Rehabilitation of Offenders Act 1974.

Answer: D

NEW QUESTION # 80
The purpose of Insurance Premium Tax is to

• A. fund the Association of British Insurers.
• B. reimburse for claims of insolvent insurers
• C. pay for flood defences.
• D. raise revenue for the Government.

Answer: D

NEW QUESTION # 81
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