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| Section | Objectives |
|---|---|
| Insurance Products and Markets | - Property and casualty insurance basics - Commercial and personal lines overview |
| Insurance Distribution Systems | - Distribution models (independent agency, brokerage, direct writers) - Agent vs broker roles and responsibilities |
| Broker and Agent Practice Skills | - Client communication and advisory skills - Policy placement and insurer interaction |
| Insurance Fundamentals and Risk Concepts | - Nature of risk (pure vs speculative risk) - Insurance principles and contract basics |
| Legal and Regulatory Framework | - Law of agency and fiduciary duty - Ethical standards and professional conduct |
1. Chandeep, a broker with binding authority, sold property and liability coverage to his new client, Multiplex Movies. Three days into the policy term, there was a slip-and-fall incident. The liability loss was denied by the insurer. Multiplex Movies sues Chandeep for E & O. Which allegation will most likely be successful for the insured?
A) Failure to issue a tangible policy
B) Failure to provide cover in time
C) Failure to provide cover for exposures
D) Failure to explain the steps to take in the event of a claim
2. Which is an example of an indirect loss?
A) Arson at a retail store, initiated by an employee
B) Water damage to an apartment when a frustrated tenant intentionally fails to turn off a tap
C) Loss of income following a fire claim that closes a factory
D) Liability claim resulting from a slip and fall at a cinema
3. What is an agent's consideration when assessing a potential client and the client's attitude towards risk?
A) People's habits are unrelated to their level of risk.
B) People have the same acceptance of risk.
C) Availability of insurance coverage may be affected by the client's lifestyle.
D) Clients who lead riskier lives are good sources of profit for insurance brokers.
4. Which statement about the expiry dates of binders is correct?
A) The expiry date must automatically be 30 days from the effective date of the policy.
B) An open expiry date should be used in case the delivery of the formal policy is delayed.
C) Binders must include the statement "valid for one year."
D) To minimize the risk of overlooking an expiring binder, the expiry date should fall on a business day.
5. What does the term contra proferentem mean?
A) The policy can be affirmed at the option of the insured.
B) Any insured listed on the policy must comply with all obligations under the policy.
C) The policy will be treated as if it never existed.
D) Any uncertainty in the policy wording will be construed in the insured's favour.
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: C | Question # 3 Answer: C | Question # 4 Answer: D | Question # 5 Answer: D |
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