The big ten
This set of questions, courtesy of online CII training package Insurance Assess, will test your knowledge of topics. The answers are at the bottom…
What is a first party cyber risk exposure?
A. An exposure that causes a legal liability loss to the business
B. A contractual risk exposure
C. An exposure that causes a direct loss to the business
D. A claim made against a director
Which of these is the main objective of compulsory motor insurance?
A. To provide additional funds for accident research
B. To ensure that the innocent victims of road traffic accidents will receive compensation
C. To ensure that every individual is properly insured against their potential liabilities to others
D. To ease the state’s financial burden
Which of these statements explains what is meant by the term ‘personal data’ under the Data Protection Act 1998?
A. Information relating to a living individual who can be identified from that information
B. Information about a person’s ethnic origin, religious beliefs, health or sexual life
C. Any information which could be embarrassing to an individual if it were released
D. Any information about a person which is freely available from public record
Which type of insurance cover is compulsory for independent insurance intermediaries that are authorised by the Financial Conduct Authority (FCA)?
A. Products liability
B. Public liability
C. Professional indemnity
D. Fidelity guarantee
Which of these classes of insurance is compulsory by statute?
A. Employers’ liability
B. Permanent health
In which of these ways does the Data Protection Act 1998 extend the principles established in the Data Protection Act 1984?
A. It applies to insurance company data
B. It gives individuals recourse to law in the event of unauthorised disclosure of information
C. It applies to corporate as well as personal data
D. It applies to all forms of data, not just computer data
Which of these actions do the Money Laundering Regulations require firms to do when approached by a new client?
A. Visit their business or home address
B. Complete a credit check with an authorised credit agency
C. Notify their money laundering reporting officer
D. Verify their identity and address
Which of these statements best describes the term contribution?
A. When there is some value in the damaged item and a financial amount is recovered from its sale
B. When someone else is to blame for the loss and it is possible to pursue them for monies paid
C. When two policies are in force for different policyholder but the same risk
D. When two polices are in force which cover the same policyholder and the same risk
What are the two main features of a financial risk control process?
A. Retention of risk or transfer to someone else
B. Eliminate the risk or reduce its level
C. Self insure or cease to carry on that type of business
D. Driver training and analysis of accidents
Which of these describes the scope of a business continuity plan?
A. An individual division only
B. The whole organisation
C. The production area of a plant only
D. The IT department only
1C. These are risks that cause a business to suffer direct losses; costs it will pay itself.
2B.The main objective of compulsory insurance is to provide a means by which people injured through the fault of others can receive compensation.
3A. Personal data means data consisting of information relating to a living individual who can be identified from that information.
4C. Professional indemnity insurance covers losses, injury or damage, suffered as a result of wrong or misleading professional actions or advice.
5A. The Employers’ Liability Act 1969 made it compulsory for all employers to insure against legal liability to pay damages to an employee injured at work.
6D. The 1998 Act extended its provisions to regulate all forms of data transfer, including manual and paper records in addition to computer data.
7D. The Regulations require the firm to take all practical measures to check the identity of new clients.
8A. Contribution involves another policy being in force for the same policyholder and covering the same risk.
9A. There are two aspects – retention of the risk, by excess, reduced cover or self insurance and transfer of the risk, typically by arranging insurance.
10B. A business continuity plan must consider the effects on the whole organisation.
A five-year endowment policy matured on 1 August 2017 with a maturity value of £40,000. The policy had been taken out with a single premium of £30,000. What is the amount of the top-sliced gain?
D: The chargeable gain is £10,000 being the maturity value of £40,000 less the single premium of £30,000. The top sliced gain is £10,000/5 years = £2,000.
After an agency relationship ends, what is the correct treatment of information that was confidential during the life of the agency?
A: The information is only confidential while the agency is operational B: The information must remain confidential, even after the agency has ended
Which of these methods explains how a periodic payment for a personal injury claim is typically funded?
C: The income may be funded directly from an insurer's reserves or by the purchase of an annuity.