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| Section | Weight | Objectives |
|---|---|---|
| Law of Contract | 15% | - Terms, conditions and representations - Breach and remedies - Essentials of a valid contract |
| Formation of Insurance Contracts | 15% | - Utmost good faith and disclosure - Offer, acceptance and consideration - Insurable interest |
| Claims and Indemnity Principles | 15% | - Measure of indemnity - Notification and proof of loss - Subrogation and contribution |
| Law of Agency | 10% | - Application to insurance intermediaries - Authority, rights and duties - Creation and types of agency |
| Interpretation and Vitiation of Insurance Contracts | 15% | - Factors vitiating the contract - Rules of construction - Warranties, conditions and exceptions |
| Nature and Sources of English Law | 15% | - Legal system and structure - Legal personality and capacity - Sources of law: statute, common law, EU influence |
| Law of Torts | 15% | - Application to liability insurance - Principles of negligence - Other torts: trespass, nuisance, breach of statutory duty |
1. Two liability policies with different insurers cover the same loss of £15,000,000. The limit of liability is
£10,000,000 under policy X and £20,000,000 under policy Y. Neither policy has a non-contribution clause.
What amount will policy Y contribute towards the claim payment?
A) £7,500,000
B) £5,000,000
C) £10,000,000
D) £9,000,000
2. Bill owned a painting which was insured under a policy containing a first refusal clause. The painting was stolen and Bill's claim was settled, but several months later the painting was recovered by the police. As a consequence, what is Bill's position under his insurance policy?
A) Bill may keep the claim settlement and also keep the painting.
B) Bill may exercise an option to buy the painting back.
C) Bill must buy the painting back.
D) Bill must return the claim settlement in exchange for the painting.
3. 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) 35% for personal injury cases and 25% for employment tribunal cases.
C) 25% for personal injury cases and 35% for employment tribunal cases.
D) 50% for both cases.
4. In respect of a life assurance policy, the duty to take reasonable care NOT to make a misrepresentation ends when the proposer
A) dies and his estate submits a claim to the insurer.
B) forms the contract with the insurer.
C) signs and submits the completed proposal form to the insurer.
D) assigns the contract to a third party.
5. John owns stock that he intentionally insured for £15,000, although the full value of the stock is £18.000. His insurance policy has no excess and is subject to a pro rata condition of average. In the event of water damaging
£6.000 of John's stock, how much will the insurer pay for a valid claim after the application of average?
A) £6,000
B) £3,000
C) £15,000
D) £5,000
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: B | Question # 3 Answer: C | Question # 4 Answer: B | Question # 5 Answer: D |
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