New M05 Dumps For Preparing Insurance Law (M05) Certified CII Exam Well
Updated M05 Dumps Questions Are Available [2025] For Passing CII Exam
NEW QUESTION # 12
For this question more than 1 option is correct. You must select all the correct options to gain the mark. What are the characteristics of a corporation aggregate?
- A. It is a legal person representing one official position.
- B. It is an organisation with a separate legal existence to its membership.
- C. It is not treated as a separate legal entity.
- D. It is answerable to its shareholders or members.
Answer: B,D
NEW QUESTION # 13
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. an indemnity policy.
- B. a first loss policy.
- C. a new for old policy.
- D. a real statement.
Answer: B
NEW QUESTION # 14
A nurse working shifts is regularly disturbed by her neighbour givig brass instrument lessons in Ihe evenings.
She is tired and losing concentration at work but is NOT at risk of losing her job. What remedy can be provided by equity as an alternative source of law to common law?
- A. Specific performance
- B. Punitive damages.
- C. An injunction.
- D. General damages.
Answer: C
Explanation:
In this case, the nurse is facing a disturbance from her neighbor, which is affecting her concentration and well- being. Aninjunctionis an equitable remedy that could be used to stop the neighbor from causing the disturbance, either temporarily (atemporary injunction) or permanently (apermanent injunction). This is often used to prevent ongoing nuisance or harm, like in this situation where the noise is impacting the nurse's ability to work.
Specific performance (A) would typically apply to compelling someone to fulfill a contractual obligation, not for stopping a nuisance. Punitive damages (B) and general damages (C) are not equitable remedies but are more common in common law for compensating harm or punishment.
NEW QUESTION # 15
What is the role of the Financial Ombudsman Service (FOS) in insurance disputes?
- A. It regulates the pricing of insurance products
- B. It helps consumers resolve complaints with their insurers
- C. It provides legal advice to insurers
- D. It issues licenses to insurance companies
Answer: B
Explanation:
The Financial Ombudsman Service (FOS) is an independent body that helps consumers resolve disputes with financial services, including insurance companies. It provides a neutral mechanism for dispute resolution.
NEW QUESTION # 16
Which of the following best defines an insurance contract?
- A. A contract that only applies to personal property insurance.
- B. A contract where the insurer assumes no liability.
- C. A contract for the protection of physical property only.
- D. A contract in which one party agrees to indemnify another against specified risks in exchange for premiums.
Answer: D
Explanation:
An insurance contract is an agreement where one party (the insurer) agrees to compensate another (the policyholder) for financial losses arising from specific risks, in exchange for regular payments (premiums).
NEW QUESTION # 17
In terms of private motor insurance, a renewal offer can be accepted
- A. only by the proposer personally.
- B. by any third party.
- C. only by written communication.
- D. by the proposer acting in reliance of the offer.
Answer: D
NEW QUESTION # 18
For this question more than 1 option is correct. You must select all the correct options to gain the mark. What are the characteristics of an express term in reaching or recording an agreement?
- A. It will usually override any implied term which conflicts with it.
- B. It must be evidenced in documentary form.
- C. It may be implied by conduct.
- D. It may be oral or in writing.
Answer: A,D
NEW QUESTION # 19
Which of the following is an example of a condition precedent in an insurance contract?
- A. The insured must pay the premium
- B. The insurer is required to pay claims for theft
- C. The insurer must provide coverage for accidental damage
- D. The insured must maintain the insured item in good condition
Answer: D
Explanation:
A condition precedent is an obligation that must be met before the insurer becomes liable for a claim. For example, the insured might need to maintain property in good condition or comply with safety measures before coverage applies.
NEW QUESTION # 20
Which of the following regulatory bodies oversees the conduct of insurance firms in the UK?
- A. Prudential Regulation Authority (PRA)
- B. Bank of England
- C. Financial Conduct Authority (FCA)
- D. Insurance Ombudsman Service
Answer: C
Explanation:
Financial Conduct Authority (FCA)
NEW QUESTION # 21
Which divisional court of the High Court includes a Commercial Court?
- A. Chancery Division.
- B. Queen's Bench Division.
- C. Partnership Division.
- D. Family Division.
Answer: A
NEW QUESTION # 22
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. indemnity.
- B. contribution.
- C. subrogation.
- D. good faith.
Answer: A
NEW QUESTION # 23
What is the role of an insurance broker in a typical insurance transaction?
- A. To ensure the insurer complies with all regulatory requirements
- B. To pay insurance premiums on behalf of the insured
- C. To provide legal advice and act as a lawyer for the insured
- D. To act as a middleman between the insurer and the insured, negotiating the terms of the policy
Answer: D
Explanation:
Insurance brokers act as intermediaries between the insurer and the insured, helping the insured find suitable coverage by comparing policies and negotiating terms. They do not typically act as legal advisors or manage premiums.
NEW QUESTION # 24
The principle of subrogation prevents a policyholder from profiting from
- A. assigning abandonment rights to the insurer.
- B. claiming under both his insurance policy and against any negligent third party.
- C. submitting a full claim recovery under more than one insurance policy.
- D. retaining salvaged property.
Answer: B
NEW QUESTION # 25
A person insures her own life under a life insurance policy but does so expressly for the benefit of another. To facilitate this, which type of arrangement is most commonly established?
- A. Power of Attorney.
- B. Trust.
- C. Coinsurance.
- D. Lien.
Answer: B
NEW QUESTION # 26
A riot results in a shop being damaged and the shopowner's insurer settling the claim. A subrogation right enabling the insurer to sue the police authority arises under
- A. statute.
- B. a condition precedent to liability.
- C. a condition subsequent to liability.
- D. tort.
Answer: A
NEW QUESTION # 27
For this question more than 1 option is correct. You must select fill the correct options to gain the mark. In what circumstances would an agency agreement be automatically terminated?
- A. Death of the agent.
- B. Disclosure of the name of the principal.
- C. Bankruptcy of the agent.
- D. Bankruptcy of the principal.
Answer: A,D
NEW QUESTION # 28
Ambiguous terms in a household insurance contract are generally construed against the
- A. insurer due to the contra proferentem rule.
- B. policyholder due to the noscitur a sociis rule.
- C. policyholder due to the literal rule.
- D. insurer due to the ejusdem generis rule.
Answer: A
NEW QUESTION # 29
A proposer for household insurance completes and submits an online application. When the insurer's website responds with a quotation based on the application, the quotation is most likely to be legally regarded as:
- A. an invitation to treat
- B. an offer
- C. an acceptance of an offer
- D. a counter offer
Answer: B
NEW QUESTION # 30
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 only apply under a personal accident policy.
- C. Subrogation rights do not apply under either policy.
- D. Subrogation rights apply under both policies.
Answer: A
NEW QUESTION # 31
What is the role of the Financial Ombudsman Service (FOS) in insurance disputes?
- A. It regulates the pricing of insurance products
- B. It helps consumers resolve complaints with their insurers
- C. It provides legal advice to insurers
- D. It issues licenses to insurance companies
Answer: B
Explanation:
The Financial Ombudsman Service (FOS) is an independent body that helps consumers resolve disputes with financial services, including insurance companies. It provides a neutral mechanism for dispute resolution.
NEW QUESTION # 32
In which of the following cases can the insurer void an insurance contract?
- A. If the insurer cannot locate the policyholder
- B. If the policyholder does not pay the premium
- C. If the insurer fails to provide a certificate of insurance
- D. If the policyholder has misrepresented a material fact at the time of underwriting
Answer: D
Explanation:
If the policyholder makes a material misrepresentation during the underwriting process, the insurer may void the contract. This is a violation of the principle of utmost good faith.
NEW QUESTION # 33
Who is entitled to the surplus if a subrogation recovery from a negligent third party is greater than the amount the insurer has paid to the insured?
- A. The insurer only.
- B. The State
- C. The insured only.
- D. It is shared between the insurer and the insured.
Answer: C
NEW QUESTION # 34
What is the maximum contingency fee percentage under a damages-based agreement that can be charged by a solicitor for personal injury cases and employment tribunal cases respectively?
- A. 35% for both cases.
- B. 25% for personal injury cases and 35% for employment tribunal cases.
- C. 35% for personal injury cases and 25% for employment tribunal cases.
- D. 50% for both cases.
Answer: B
NEW QUESTION # 35
What is the principle of utmost good faith in insurance?
- A. A policyholder's claims must always be paid out without dispute.
- B. Insurers must provide coverage for all types of risks.
- C. The insurance policy must be renewed annually.
- D. Both parties in the contract must act honestly and disclose all material facts.
Answer: D
Explanation:
Both parties in the contract must act honestly and disclose all material facts.
NEW QUESTION # 36
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