M05 by CII Valid Free Exam Practice Test

Question 1

The test of the materiality of facts in an insurance contract is defined according to the opinion of a

A. diligent broker. B. honest proposer. C. reasonable person. D. prudent underwriter.

Correct Answer: D

Question 2

What is the legal effect of a warranty in an insurance contract?

A. A warranty makes the contract voidable by the insured. B. A warranty must be fulfilled by the insurer. C. A warranty is a condition precedent to liability. D. A warranty allows the insurer to increase premiums.

Correct Answer: C

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Question 3

A riot results in a shop being damaged and the shopowner's insurer settling the claim. A subrogation right enabling the insurer to sue the police authority arises under

A. a condition precedent to liability. B. a condition subsequent to liability. C. statute. D. tort.

Correct Answer: C

Question 4

What principle requires that both the insurer and insured disclose all material facts to each other before and during the contract?

A. The principle ofsubrogation B. The principle ofcontribution C. The principle ofindemnity D. The principle ofutmost good faith (uberrimae fidei)

Correct Answer: D

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Question 5

Which of the following is an essential element in the formation of an insurance contract?

A. A valid claim history B. A formal written agreement C. A signed declaration by the policyholder D. The payment of a premium

Correct Answer: D

Question 6

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

Correct Answer: D

CII Insurance law (IL) - M05 Exam Practice Test