XYZ Insurance Brokers (UIB) knows that under Section 77 of the Insurance Act 1966, it must have in force a certain type of insurance policy in which XYZ is indemnified in respect of the liabilities arising out of its business. What type of insurance must XYZ have in force? Marine, ¥ (@) Professional Indemnity. Fire. Motor. ABC Comparison Ltd (ABC) leverages on technology to make it easier for consumers to compare insurance products. It compiles and provides information about insurance policies of various insurance companies on an internet site. ABC is MOST LIKELY a Captive Insurer. Loss Adjuster. v@ Web Aggregator. Reinsurer. The minimum capital requirement prescribed under Risk Based Capital Framework v @ serves as a buffer for insurers to absorb losses. relates to the premium payment terms for general insurance policies. is the minimum paid up capital requirement of insurance brokers. is the minimum amount to be paid to policyholders in the case of insurers winding up.Jane is concerned that if her Motor insurer fails, own property damage motor claim will not be settled. With regards to Jane's claim, the Policy Owner's Protection Scheme ¥@ offers 100% coverage but there is also a cap, on a per policy basis. demands that Jane has to pay a $250 levy before she can be offered provides 100% coverage on an unlimited basis. does not provide coverage as it is Motor in nature. What type of information is an insured required to disclose to an insurer, when negotiating an insurance contract? v @ Details of previous burglaries. Aprevious insurer's premium rating on the risk. Facts of the law. Details of insured’s vacation allowances. XYZ Ltd has a Group Insurance covering its employees. What is a characteristic of XYZ's Group Insurance policy? Several master contracts are issued and kept by the employees. Itis normally underwritten on an experimental rating basis. ¥@ It requires minimal underwriting. Its cost of coverage per member is higher than when purchasedJane loves investing in real estate. Which category does her risk falls under? Fundamental. Non-financial. Pure. v @ Speculative Jim loves to bet on football matches. When Jim places a bet, this creates a new moral hazard. fundamental risk. physical hazard. ¥ @ speculative risk. Insurance surveyors help to spot hazards that pose potential dangers. This is an example of insurance ¥@ encouraging loss control helping the national government's borrowing requirement. ensuring that an insured’s financial stability will not be undermined. helping to reduce the anxiety that an individual may have in meeting the cost of risk.A typical example of a non-financial risk is loss of money during a robbery. ¥ (@) selecting the right school for one's child. loss or damage to a motor vehicle. an injury to an employee. Gambling can be described as a situation in which both parties are unaware when the event will take place. restoring the loser to their former financial position socially productive, as the gain of the winner is not at the expense of the loser. ¥ @ creating a new speculative risk. What type of insurance contracts are Term Insurance, Whole Life Insurance, and Hospital Income Insurance? v @ Benefit. Indemnity. Contribution. Reinstatement.Jane is considering whether to send her son to Alpha College or Delta College. She is worried that if she makes a wrong choice, the implications on her son could be severe. Jane's risk is speculative. fundamental. immaterial. ¥ @ non-financial. The measure of indemnity for loss of or damage to a building is calculated as the cost of new for old at the time of loss. repair or reconstruction at the time of policy inception ¥ @ repair or reconstruction at the time of loss. new for old at the time of policy inception. A creditor wishes to insure the life of a debtor. What is the principle that allows him to do so? ¥ @ insurable interest. Utmost good faith. Proximate cause. Contribution.What is a policyholder required to disclose to his insurer as a material fact, when applying for Theft Insurance? The insured’s premises are well protected. Committing theft is a criminal offence v @ The shop has previous burglaries. The stocks are commonly known to be attractive to thieves. A machinery is damaged and there is a ready second-hand market for it. What BEST describes an indemnity for the damaged machinery? 50% of the cost of the second-hand item. The cost of the second-hand item plus any additional transport and installation costs. ve Merely the additional transport and installation costs. New for old. At Common Law, the duty of disclosure in insurance starts when the policy begins. when the proposal is signed at the time of a loss. ¥ @ at the beginning of negotiationsJane employs a decorator to paint her house. The decorator is careless and starts a fire, causing damage to Jane's house. Jane has a Household Insurance policy with ABC Insurance which will pay for the damage to her house. ABC Insurance will try to recover the costs of paying Jane's claim using the legal doctrine of v¥ @ subrogation reinstatement. contribution. indemnity. Acompany is negotiating terms for its Engineering Insurance cover with an insurer. What material fact must the company disclose to the insurer? ¥ @ The maintenance details of a boiler. Details of the latest laws pertaining to Engineering. That the premises are brand new. Details of the smoke detectors and sprinklers fitted to the premises. Afire starts at a business premises. This causes a water pipe to burst and the water causes an electrical fault, which then causes a computer to overheat, resulting in a loss of data. What is the proximate cause of the loss of data? Water damage. Electrical fault. ¥©@ Fire. Overheating.Acontract is based on reciprocity, and when a party promises to do certain things under a contract, he is called the promisor. In giving this promise, the promisor must receive something in return, and what he receives for the promise is called offer. contribution. ¥ (@) consideration. acceptance. Jim enters a shop to buy a television set and pays $800 to the shop owner for it. Which element of a valid contract does the $800 paid by Jim in relation to the contract for the sale of the television set belong to? Capacity to contract. Offer. Acceptance. ¥ @ Consideration. An agency agreement is said to be “implied” when an act is done on behalf of another by a person who has no authority to do that act and is subsequently ratified by that person so that an agency relationship is created. the duties, authority and power of the agent, the duration of the agency and the remuneration of the agent are set out expressly in a written agreement. the agent and principal undertake a verbal agreement which is not subsequently agreed in writing. one party conducts themselves in such a way that it is reasonable for the ¥ @ other party to infer from that conduct that an agency relationship has been created.Jim conducts himself in such a way that it is reasonable for another party to infer from that conduct that an agency relationship has been created between the principal and Jim. What type of agreement describes the principal's appointment of Jim? Apparent. Express Ostensible. ¥@ Implied. The “contra proferentem" rule states that v> the person drawing up a legal document is responsible for any defects in it and cannot profit from such defects. @ tthe policy covers “all risks”, then all forms of unforeseen loss and sudden damage are covered, subject to specific policy exclusions. the person drawing up a legal document is entitled to demand a fee for such services from the party receiving the document. if the policy covers “named perils’, then all forms of unforeseen loss and sudden damage are covered, subject to specific policy exclusions. A duty owed by an agent to his principal is to v © carry out the contract with dispatch act in collusion. @ exercise expert level of care and skill arrange reinsurance.The MOST common tool by which the insurer receives information about the risks to be insured is the ¥ @ proposal form. cover note. expiry notice. claim form Jim receives a policy document and wishes to find out what the policy is covering. Which section of a policy can Jim locate such information? Header. Endorsement. v @ Operative clause. Preamble. Jim receives his Home insurance policy and is reading the schedule therein. What information will Jim find in the insurance policy schedule? ¥ © Sums insured. @ Period of reinsurance. Insured’s signature. Address of the insurance broker.In what set of circumstances would an insurer issue an endorsement to an insurance policy? ¥ (@) Achange in the sum insured. Upon the anniversary of the founding of the insurer. Achange in the insurer's financial rating, Achange in the insurer's reinsurance arrangement. What is the usual period of insurance for a Foreign Domestic Worker (Maid) Insurance policy? 12 or 24 months. ¥ @ 14 oF 26 months. 12 months. 20 months Which claim settlement option is MOST commonly associated with property claims, in particular buildings which have been severely damaged by fire? Reinsurance. Recall. Replacement. ¥ @ Reinstatement.Which settlement option will the insurer MOST LIKELY arrange for a smashed and broken motor windscreen claim? Reinstatement. v @ Replacement. Cash Payment. Repair. A glass window has been damaged at XYZ Ltd’s commercial premises. What type of settlement option will XYZ's Glass Insurer MOST LIKELY use to indemnify it for the loss? Repair. v @ Replacement. Cash. Reinstatement. In Singapore, under the Limitation Act 1959, within what time from the date on which the course of action accrued must claims for personal injury be initiated against a third party? 7 years. 10 years. 5 years. v@ 3 years.XYZ Ltd (XYZ) has suffered flood damage to its commercial premises. Prompt notification of the loss by XYZ to its insurers is important because the sooner XYZ notifies the loss, the sooner XYZ can exercise subrogation rights against the insurer. XYZ can abandon the property. ¥@ the insurer can make any investigation. the insurer can reject the claim. What type of organisation consists of independent claim specialists that are usually appointed by insurers and whose role is to assist in validating claim settlements quickly and fairly? v @ Loss adjusters. Restoration specialists. Loss assessors. Claims recovery agents. In reinsurance, the original insurer transferring part of a single risk or several risks to reinsurers is called the v @ cedant. aggregator. regulator. agent.In reinsurance, a reinsurer who places risks with another reinsurer is termed as the cedant. ¥ @ retrocedent. retrocessionaire. original insurer. ABC Insurance Ltd shares a large risk with two other insurers by which ABC Insurance Ltd as the leading insurer shares direct responsibility for the risk with these two insurers on a proportional basis. What is this method of sharing the risk called? Contribution. Reinsurance. ¥ @) Co-insurance. Subrogation. Jim, an insurance agent, amends the medical history on his client's proposal form, to enable the insurer to accept the client at a reduced premium. Jim's act is ¥ @ unethical. unnecessary as Jim should have just paid for the additional premium himselt. rather professional as Jim has taken the initiative in this matter. in accordance with market practice.Jim is a broker. Three years ago, Jim’s commercial client advised him that it had suffered a large fire loss at its commercial premises. Jim did not disclose this fact to the insurer for fear that the insurer would not want to insure the risk. What term is given to such an act? Inappropriate Replacement Of Existing Insurance. Sub-Agency Practice. Failure To Maintain Confidentiality. ¥ (@) Failure To Disclose Material Information. The Chief Executive Officer of an insurer could be said to be acting unethically if he authorises alterations to a policy wording v¥ @ unfairly criticises a competitor. refuses to deal with an insured who misrepresents himseff. promises benefits in promotional materials. Jane is excited about her impending trip to London as she is visiting a specialist insurance market formed in 1686 and governed by an Act of Parliament in England. What is the organisation that Jane is MOST LIKELY 1? The Chartered Insurance Institute. International Underwriting Association. ¥ @ Lloyd's of London: Association of British Insurers.Which type of compliance instruction is issued with legal effect to financial institutions by the Monetary Authority of Singapore? ¥ (@) Directions. Policy Statements. Codes Circulars. Which instrument issued by the Monetary Authority of Singapore details specific instructions to financial institutions or other specified persons to ensure compliance? ®) Guidelines. Statutes. v Directions. Circulars. pure risk v¥ @ involves the possibility of a loss only or at best a no gain situation. involves the possibility of a gain only. will result in a loss to all parties involved. will result in a gain to all parties involved.Which type of risk affects the entire economy or large numbers of persons or groups within the economy, arising out of social, economic, political, or natural causes and is widespread in its effect? Particular. Pure. ¥ @) Fundamental. Speculative. Jane owns a shop in Singapore. She is worried about the risk of shoplifting and decides to set up a fund to pay for any shoplifting losses that may be incurred. Jane's approach to handling the risk of shoplifting is known as risk control. avoidance. transfer. ¥ @ retention. Jim is giving a lecture on the benefits of insurance at the Singapore College of Insurance. Which characteristic is MOST LIKELY to be cited by Jim as a benefit of insurance? Insurers employ risk surveyors to visit premises and make recommendations on increasing the frequency and severity of losses. Insurance stimulates business enterprise by guaranteeing that losses will not occur. Insurance helps finance the gaming industry as it is a form of gambling. Insurance provides financial stability, by mitigating the impact of an insured v@ event.Atypical example of a speculative risk is the outbreak of war in Singapore. ¥v @ an investment in stocks and shares. the possibility of a collision while an individual is driving his car. an individual being assaulted while walking along a dark lane. Jane believes insurance protects her, so she leaves her car unlocked whenever she goes shopping. This is an example of a ¥ (@) moral hazard. fundamental risk. physical hazard. speculative risk. Jim has bought an Identity Theft Insurance. This type of insurance is a ¥ @ financial line. liability product. health policy. property cover.Jane firmly believes in the concept of insurance as she feels it offers several benefits, A significant benefit of insurance is that insurance discourages investment, thereby encouraging prudence. promotes gambling as the date of when the event will happen is not certain. provides peace of mind by guaranteeing that a loss will never take place. encourages loss control as the insurer can recommend useful loss control measures. Several employees of XYZ Pte Ltd have been smoking in its warehouse that stores paper. The action of the employees could be described as an unethical act. ¥ @ a moral hazard. risk control. risk transfer. The legal requirement that the insured should be fully compensated, but not over-compensated, for a loss is the doctrine of utmost good faith. contribution. ¥ @ indemnity. subrogation.Jim has an insurance policy which includes a clause that states that there is no liability for any loss below S$5,000. However, once the amount of S $5,000 has been exceeded, the loss is payable in full. What type of clause has been included within the insurance policy? v @ Franchise. Contribution. Reinstatement. Excess, In ABC Ltd's Commercial Motor policy, “collision” is named in the policy as covered i.e. collision is an implied cover. a warranty. ¥@ an insured peril regarded as an excess. Which type of insurance policy is BEST described as a contract of indemnity? Critical Illness Insurance. Whole Life Insurance. ¥@ Liability insurance. Personal Accident Insurance.What term is given to the right of one insurer to recover an equitable proportion of a paid claim from another insurer who is also liable for the same claim? Subrogation. Reinstatement. ¥ (@) Contribution. Indemnity. When an insured makes a fraudulent misrepresentation in respect of an insurance policy, the insurer is MOST LIKELY to v¥ @ void the policy and claim damages. renew the policy. fine and suspend the insured refuse a claim and allow the policy to stand. Which common family relationship represents insurable interest, when applying for a Life Insurance policy? Aman and his fiancee. ‘An uncle and his nephew. ¥ (@ Aparent and minor child. © Acouple of old friends.