[Apr 19, 2023] Latest IF1 PDF Dumps & Real Tests Free Updated Today
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The IF1 exam also covers the principles of underwriting, which is a critical aspect of the insurance industry. Underwriting involves assessing risk and determining the appropriate premiums and coverage for policies. By understanding the principles of underwriting, candidates can ensure that their organization is providing appropriate coverage to clients while also managing risk effectively.
NEW QUESTION # 45
Why is effective risk management important to an insurer?
- A. It helps to reduce a company's loss exposure.
- B. It increases premium income.
- C. It always reduces costs.
- D. It increases the insurer's capacity.
Answer: A
NEW QUESTION # 46
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 first loss policy.
- B. a new for old policy.
- C. a real statement.
- D. an indemnity policy.
Answer: A
NEW QUESTION # 47
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. There is no intermediary to provide assistance.
- B. A courtesy car is not available.
- C. The policy excess is higher.
- D. The risk of losing a no claims discount is greater.
Answer: A
NEW QUESTION # 48
What type of reduction is sometimes applied to the replacement cost of an item under an insurance policy claim in order to reflect the application of indemnity?
- A. Loss of interest.
- B. An excess.
- C. Wear and tear.
- D. Brokerage.
Answer: C
NEW QUESTION # 49
Self-insurance arises when a
- A. policyholder decides to insure proportions of his property with different insurers.
- B. company decides to set aside a fund to pay losses that may occur.
- C. number of insurers agree to collectively insure a particular risk in agreed proportions.
- D. policyholder finds that he has inadvertently taken out more than one policy covering the same risk.
Answer: B
NEW QUESTION # 50
Who cedes business to a reinsurer?
- A. The assessor.
- B. The insurer.
- C. The insured.
- D. The agent.
Answer: B
NEW QUESTION # 51
If a surveyor is sent lo survey a risk, what does risk primarily refer to in this context?
- A. The premises.
- B. The policyholder.
- C. The insured perils.
- D. The policy cover details.
Answer: A
NEW QUESTION # 52
What legally recognised financial relationship must exist, between a policyholder and the items being insured, to constitute a valid household contents insurance policy?
- A. Delegated authority.
- B. Vicarious liability.
- C. Insurable interest.
- D. Risk indemnity.
Answer: C
NEW QUESTION # 53
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. In no circumstances.
- B. In all circumstances.
- C. Only if the records include dates of birth.
- D. Only if the records include details of race.
Answer: B
NEW QUESTION # 54
An insured is temporarily disabled due to illness and unable to work. During this period, what type of insurance policy will typically pay a weekly benefit for up to two years?
- A. An employers' liability insurance policy.
- B. A medical expenses insurance policy.
- C. A personal accident and sickness insurance policy.
- D. A critical illness insurance policy.
Answer: C
NEW QUESTION # 55
A risk that is always insurable is a
- A. fundamental risk.
- B. capital risk.
- C. pure risk.
- D. speculative risk.
Answer: C
NEW QUESTION # 56
A retail customer CANNOT buy insurance directly from which type of insurer?
- A. A captive insurer.
- B. A mutual insurer.
- C. A composite insurer.
- D. A direct insurer.
Answer: A
NEW QUESTION # 57
When Susan applied for a new household contents insurance policy, she was obliged to disclose her extensive claims history. Such details are normally known as
- A. warranties.
- B. material circumstances.
- C. contractual terms.
- D. indemnity.
Answer: B
NEW QUESTION # 58
In order for a contract to be legally enforceable, what further action is required after offer and acceptance?
- A. Exchange of consideration between the two parties.
- B. Delivery of goods or services concerned.
- C. Provision of written terms and conditions.
- D. Witnessing by a third party.
Answer: A
NEW QUESTION # 59
Peter currently has no penalty points on his driving licence, although he was convicted of a minor motoring offence eight years ago. Why does Peter NOT need to disclose this to his motor insurer?
- A. It is information that would not influence an underwriter.
- B. It is a spent conviction.
- C. It represents a physical hazard.
- D. It represents a moral hazard.
Answer: B
NEW QUESTION # 60
For which professional is professional indemnity insurance compulsory by statute?
- A. A loss adjuster,
- B. A chartered surveyor. .
- C. A loss assessor.
- D. A solicitor.
Answer: D
NEW QUESTION # 61
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 storm.
- B. The fire.
- C. The water damage.
- D. The falling wall.
Answer: A
NEW QUESTION # 62
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