CII M05 Dumps Updated Mar 13, 2026 WIith 121 Questions
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NEW QUESTION # 38
Which of the following is true regarding the insurable interest in life insurance?
- A. Insurable interest is not required for life insurance policies
- B. The policyholder must have a financial interest in the property of the person insured
- C. The policyholder must have a financial interest in the life of the person insured
- D. Insurable interest is required only at the time the policy is issued
Answer: C
Explanation:
Explanation: For life insurance, insurable interest refers to the requirement that the policyholder must have a legitimate financial or emotional stake in the life of the person insured. This must be present at the time of death, not just when the policy is issued.
NEW QUESTION # 39
The test of the materiality of facts in an insurance contract is defined according to the opinion of a
- A. reasonable person.
- B. honest proposer.
- C. prudent underwriter.
- D. diligent broker.
Answer: C
NEW QUESTION # 40
What is the role of a condition precedent in an insurance policy?
- A. It defines the scope of coverage for the policyholder
- B. It is a requirement that must be met before the insurer is liable for a claim
- C. It ensures that the insurer will cover all risks associated with a policy
- D. It outlines exclusions from coverage
Answer: B
Explanation:
A condition precedent refers to a requirement that must be met before an insurer is obligated to pay a claim.
Failure to meet this condition can result in the insurer not being liable.
NEW QUESTION # 41
Under the principle of indemnity, what is the objective of an insurance contract?
- A. To protect the insurer from fraudulent claims
- B. To ensure the insured profits from the loss
- C. To ensure the insured receives full compensation for their loss regardless of the circumstances
- D. To restore the insured to the same financial position they were in before the loss
Answer: D
Explanation:
Explanation: The principle of indemnity aims to ensure that the insured is financially restored to the same position they were in before the loss occurred, without allowing them to profit from the insurance claim.
NEW QUESTION # 42
Fred knew Susie wanted to sell her car. On behalf of Susie, Fred agreed the sale of the car to Tina for £5.000.
That evening, Susie ratified Fred's agreement with Tina The next day. Tina decided NOT to proceed with the purchase What is Susie's legal position in these circumstances?
- A. She can sue both Fred and Tina jointly for breach of good faith.
- B. She has no legal right to sue.
- C. She can sue Tina for breach of contract.
- D. She can sue Fred for breach of agency agreement.
Answer: B
NEW QUESTION # 43
Which of the following is considered an exclusion in a standard property insurance policy?
- A. Loss due to war or civil unrest
- B. Theft by a third party
- C. Damage caused by accidental breakage
- D. Loss caused by a fire
Answer: A
Explanation:
Many property insurance policies exclude certain high-risk events such as war, civil unrest, and terrorism.
These exclusions limit the insurer's exposure to catastrophic losses.
NEW QUESTION # 44
In what circumstances is abandonment automatic under a marine hull insurance policy?
- A. The constructive total loss of the vessel.
- B. The insured has sent a formal notice of abandonment.
- C. The actual total loss of the vessel.
- D. The insured has performed an action of abandonment.
Answer: C
NEW QUESTION # 45
In the context of insurance, what does "utmost good faith" (uberrimae fidei) require?
- A. Both parties must fully disclose all relevant information
- B. The insurance contract must be written in simple, easy-to-understand language
- C. The policyholder must always pay premiums in advance
- D. The insurer must offer the policyholder the best possible coverage
Answer: A
Explanation:
The principle of utmost good faith requires both the insurer and the insured to disclose all material facts truthfully. Failure to do so can result in the contract being voided.
NEW QUESTION # 46
Adam was bitten by a stray dog in Africa. He washed his wound in a pond and a week later he became very ill with a high temperature. Initially, the local hospital treated him for malaria and later treated him for the fever following the dog bite. Adam died in hospital. What is the proximate cause of his death?
- A. The original physical injury of the dog bite.
- B. The delay in obtaining the correct medical treatment.
- C. The delay in seeking medical treatment.
- D. The unhygienic washing of the dog bite.
Answer: A
NEW QUESTION # 47
For this question more than 1 option is correct. You must select all the correct options to gain the mark. How may double insurance arise?
- A. A deliberate attempt to obtain the proceeds of two policies.
- B. A merger between two major insurance companies.
- C. An overlap in cover between two different types of insurance policy.
- D. The inadvertent non-cancellation of a policy when a new policy is taken out.
Answer: A,C
NEW QUESTION # 48
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 spray booth.
- B. The paint.
- C. The waste bin.
- D. The unguarded paraffin space heater.
Answer: D
NEW QUESTION # 49
When the rule in Rylands v Fletcher operates, liability arises from the:
- A. strict liability of the defendant
- B. defendant's trespass to land
- C. defendant's negligence.
- D. vicarious liability of the defendant
Answer: A
Explanation:
The rule inRylands v Fletcherestablishesstrict liability, meaning the defendant can be held liable for certain kinds of damage even if they were not negligent or at fault. This applies in situations where a person brings something onto their land (like water or chemicals) that has the potential to escape and cause damage. If it does escape, the defendant is typically held strictly liable for any resulting harm, regardless of whether they were negligent or not.
NEW QUESTION # 50
In accordance with the principle of good faith, which facts must a potential policyholder disclose to the insurer when applying for insurance?
- A. Any facts which are in the public domain.
- B. Only those facts considered likely to reduce the cost of cover
- C. Any facts of law.
- D. Any facts which are considered material to the risk.
Answer: D
NEW QUESTION # 51
When an insurer is aware that the total value of stock is more than the sum insured and issues a policy on this basis, this is known as
- A. a real statement.
- B. a new for old policy.
- C. an indemnity policy.
- D. a first loss policy.
Answer: D
NEW QUESTION # 52
Which of the following is an example of a condition precedent in an insurance contract?
- A. The insurer is required to pay claims for theft
- B. The insurer must provide coverage for accidental damage
- C. The insured must pay the premium
- D. The insured must maintain the insured item in good condition
Answer: D
Explanation:
A condition precedent is an obligation that must be met before the insurer becomes liable for a claim. For example, the insured might need to maintain property in good condition or comply with safety measures before coverage applies.
NEW QUESTION # 53
Which of the following terms in an insurance policy is typically enforceable in a court of law?
- A. Exclusions
- B. Conditions precedent
- C. Warranties
- D. Representations
Answer: C
Explanation:
Warrantiesare conditions in the insurance contract that are considered to be fundamental and must be strictly adhered to. A breach of warranty can result in the insurer being able to avoid liability. Representations are made by the insured but are not legally binding in the same way.
NEW QUESTION # 54
For this question more than 1 option is correct. You must select all the correct options to gain the mark. In a consumer insurance policy, a warranty can arise as
- A. an exception clause.
- B. a basis of the contract clause.
- C. a continuing warranty.
- D. an express term.
Answer: B,D
NEW QUESTION # 55
What are the main reasons why the law requires insurable interest to exist?
- A. Reduce moral hazard and discourage gambling.
- B. Discourage betterment and ensure premium adequacy.
- C. Reduce physical hazard and discourage gambling.
- D. Discourage underinsurance and ensure premium adequacy.
Answer: A
NEW QUESTION # 56
What are the main objectives of the principle of insurable interest?
- A. To reduce moral hazard and to discourage wagering.
- B. To reduce moral hazard and to discourage profiteering.
- C. To reduce physical hazard and to discourage profiteering.
- D. To reduce physical hazard and to discourage wagering.
Answer: A
NEW QUESTION # 57
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. should be able to underwrite the risk based on the information already provided.
- B. has statistics on similar risks.
- C. does not have the right to ask the proposer for more information.
- D. did not request further information.
Answer: D
NEW QUESTION # 58
Fran is self-employed and works from home. She uses her spare bedroom as an office and separately insures her computer, photocopier and other items of office equipment. She occasionally uses the equipment for personal use. Under the Consumer Insurance (Disclosure and Representations) Act 2012. in relation to insuring this equipment, she would be defined as a
- A. non-consumer because the items covered are not household items.
- B. consumer because she is working from home rather than on business premises.
- C. consumer because she is an individual.
- D. non-consumer because her insurance cover is mainly for business use.
Answer: C
NEW QUESTION # 59
Which of the following is an essential element in the formation of an insurance contract?
- A. A signed declaration by the policyholder
- B. A formal written agreement
- C. The payment of a premium
- D. A valid claim history
Answer: C
NEW QUESTION # 60
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.
Answer: A
NEW QUESTION # 61
A property policy contains a condition regarding prompt loss notification. If the insured fails to comply with this condition, in practice, the insurer is likely to
- A. avoid the claim automatically due to the breach of the policy condition.
- B. settle the claim and cancel the insurance policy from inception.
- C. only avoid the claim if the delay has seriously prejudiced its investigation and handling of the claim.
- D. settle the claim and recover its outlay from the insured.
Answer: A
NEW QUESTION # 62
In an insurance policy arranged through an insurance broker the parties to the contract are the:
- A. insured and the insurer only
- B. insurance broker only
- C. Insurance broker and the insured only
- D. insured only
Answer: A
NEW QUESTION # 63
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