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NEW QUESTION # 34
A retail customer CANNOT buy insurance directly from which type of insurer?
- A. A mutual insurer.
- B. A direct insurer.
- C. A captive insurer.
- D. A composite insurer.
Answer: C
NEW QUESTION # 35
How do an insurer's subrogation rights differ, if at all, between a theft policy and a personal accident policy?
- A. Subrogation rights only apply under a theft policy.
- B. Subrogation rights apply under both policies.
- C. Subrogation rights only apply under a personal accident policy.
- D. Subrogation rights do not apply under either policy.
Answer: A
NEW QUESTION # 36
Which professional body specialises in giving its members advice on the long-term management of assets and liabilities?
- A. The Institute and Faculty of Actuaries.
- B. The Chartered Institute of Loss Adjusters.
- C. The International Underwriting Association of London.
- D. The Lloyd's Market Association.
Answer: A
NEW QUESTION # 37
Joe is a broker who has become a Fellow of the Chattered Insurance Institute. If he would like to use the title Chartered Insurance Broker, what must he do. if anything?
- A. He cannot use the name as he would be in breach of the Insurance: Conduct of Business sourcebook (ICOBS).
- B. He must apply to the Prudential Regulation Authority.
- C. He must apply to the Chartered Insurance Institute.
- D. He must apply to the British Insurance Brokers' Association.
Answer: C
NEW QUESTION # 38
The capital requirements of insurers and intermediaries are set out by
- A. Proceeds of Crime Act 2002.
- B. Money Laundering Regulations.
- C. Data Protection legislation.
- D. Prudential Regulation Authority rules.
Answer: D
NEW QUESTION # 39
If an insured signs an agreement with a hold harmless clause, this may prevent the insurer from
- A. reinsuring the risk.
- B. pursuing subrogation rights.
- C. disclosing details to a third party.
- D. increasing the premium.
Answer: B
NEW QUESTION # 40
When motor insurance is purchased directly with an insurer, what is usually the main disadvantage to the policyholder in the event of a claim compared to purchasing indirectly through a different marketing channel?
- A. The risk of losing a no claims discount is greater.
- B. There is no intermediary to provide assistance.
- C. The policy excess is higher.
- D. A courtesy car is not available.
Answer: B
NEW QUESTION # 41
Joel buys a house in a flood plain, but it has NOT flooded for 10 years. In purchasing insurance, Joel is managing what element of risk?
- A. Certainty.
- B. Statutory requirements.
- C. Uncertainty.
- D. Frequency.
Answer: C
NEW QUESTION # 42
From April 2019. a small company with nine employees is in dispute with its insurer and wishes to refer the matter to the Financial Ombudsman Service (FOS). The FOS is only permitted lo deal with the dispute if the insured's turnover does NOT exceed
- A. £6,000,000
- B. £6,500,000
- C. £3,500,000
- D. £1,000,000
Answer: D
NEW QUESTION # 43
Which principle of insurance prevents a member of the public from taking out an insurance policy on the life of a celebrity in the hope of receiving a windfall on the celebrity's death?
- A. Good faith.
- B. Proximate cause.
- C. Insurable interest.
- D. Indemnity.
Answer: C
NEW QUESTION # 44
Under the Insurance: Conduct of Business sourcebook (ICOBS) on product disclosure, what information about the claims-handling process must an intermediary provide to a consumer?
- A. The number of days the settlement should take.
- B. The policy number only.
- C. The contact details of the insurer.
- D. The contact details of the loss adjuster used by the insurer.
Answer: D
NEW QUESTION # 45
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 not be considered as this is not an underwriting factor in motor insurance risk assessment.
- B. They will be classed as relevant information and will affect the premium.
- C. They will be ignored in accordance with the provisions of the Rehabilitation of Offenders Act 1974.
- D. They will only be considered if Tom had a further speeding conviction in the last 12 months.
Answer: C
NEW QUESTION # 46
John and his wife arrange a household contents insurance policy in joint names with insurer A for a sum insured of £10,000. His wife arranges a second policy on the same basis with insurer B for a sum insured of
£20,000. Both policies have identical terms and conditions. What is insurer A's liability if a valid claim of
£3,000 is subsequently made?
- A. £2,000
- B. £1,000
- C. £1,500
- D. £3,000
Answer: B
NEW QUESTION # 47
If the amount to be paid in the event of a total loss of insured property is agreed between the proposer and the insurer at inception of the policy, this is a modification of the principle of
- A. subrogation.
- B. indemnity.
- C. contribution.
- D. good faith.
Answer: B
NEW QUESTION # 48
Which general rule does the Contracts (Rights of Third Parties) Act 1999 seek to modify?
- A. Privity of contract.
- B. Contra proferentem.
- C. Good faith.
- D. Subrogation.
Answer: A
NEW QUESTION # 49
A firm of insurance brokers invite Stuart. an underwriter who handles its account, on a Caribbean cruise with his family. How should Stuart react to this invitation in order to comply with the Chartered Insurance Institute's Code of Ethics?
- A. Decline as this is against the Financial Ombudsman Service regulations.
- B. Accept only on the basis that the cost is less than £1.000.
- C. Accept on the basis that this is an accepted business practice.
- D. Decline to avoid any suggestion he is being compromised.
Answer: D
NEW QUESTION # 50
A house slatls to have subsidence problems due to the negligence of a cable-laying company. The owner of the house claims under his household buildings insurance policy. Which principle allows the insurer to recover from the cable-laying company?
- A. Salvage.
- B. Contribution.
- C. Subrogation.
- D. Assignment.
Answer: C
NEW QUESTION # 51
Under the provisions of the Financial Services Act 2012. what action, if any, can the regulator take against a firm that has committed money laundering offences?
- A. No action can be taken.
- B. Criminal prosecution.
- C. Civil proceedings.
- D. Arbitration.
Answer: B
NEW QUESTION # 52
A broker collects premiums on behalf of an insurer and subsequently goes into liquidation. Various premiums are outstanding to the insurer, despite policyholders having paid the broker What action is the insurer most likely to take?
- A. Apply for a second payment from the policyholders.
- B. Write to the liquidator to register the debt.
- C. Cancel the policies from inception for non-payment.
- D. Offer a discounted premium payment to the policyholders.
Answer: B
NEW QUESTION # 53
Insurers and intermediaries are required to adhere to solvency requirements as stipulated by the
- A. Financial Ombudsman Service.
- B. Association of British Insurers.
- C. European Union.
- D. Financial Services Compensation Scheme.
Answer: C
NEW QUESTION # 54
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