Valid E05 Exam Q&A PDF E05 Dump is Ready (Updated 52 Questions)
Exam Questions and Answers for E05 Study Guide
NEW QUESTION 28
For this question more than 1 option is correct. You must select all the correct options to gain the mark.
A proposer for private motorcycle insurance carelessly states the motorcycle's engine capacity as 500cc when in fact it is 1500cc. A policy is issued by the insurer on this basis. In the event of a valid claim causing damage to the motorcycle, what potential remedies are available to the insurer under the Consumer Insurance (Disclosure and Representations) Act 2012?
- A. Apply any terms it would have applied if the misrepresentation had not taken place.
- B. Reject the claim, but maintain the policy.
- C. Avoid the contract, refuse all claims and keep the premium.
- D. Reduce the claim amount in proportion to the premium it would have charged.
Answer: A,D
NEW QUESTION 29
A professional indemnity policy includes a condition requiring that the insured must give prompt notice of any circumstance that could give rise to a claim. What type of condition is this?
- A. A suspensive condition.
- B. A collateral condition.
- C. A condition precedent to liability.
- D. A condition precedent to the contract.
Answer: C
NEW QUESTION 30
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 31
The branch of law particularly relevant when handling negligence claims is
- A. constitutional law.
- B. civil law.
- C. administrative.
- D. public law.
Answer: B
NEW QUESTION 32
How can an agency relationship be best described?
- A. A person has ratified another party's action.
- B. A person, who has paid another party under a contract, has the right to stand in the place of that other party and avail himself of the rights and remedies of that party.
- C. A person has transferred his obligations under a contract to another party.
- D. A person has the authority to act on behalf of another party.
Answer: D
NEW QUESTION 33
For this question more than 1 option is correct. You must select all the correct options to gain the mark. What are the main sources of new English Law?
- A. Official law reports.
- B. Case law.
- C. International treaties.
- D. Legislation.
Answer: B,D
NEW QUESTION 34
As a result of a breach of good faith under a commercial insurance policy, the insurer avoided the policy as a whole, but was NOT permitted to retain the premium because
- A. the misrepresentation was innocent.
- B. the premium was paid by monthly installments.
- C. no claim had been submitted or paid.
- D. the misrepresentation was fraudulent.
Answer: A
NEW QUESTION 35
According to statute, a term under a consumer personal accident insurance policy may potentially be considered unfair if the insurer
- A. applies a specific exclusion within the policy wording.
- B. provides coverage that is more restrictive than that of other insurers.
- C. requires notification of a claim within a very short time period.
- D. imposes a premium loading.
Answer: C
NEW QUESTION 36
A married couple have equal shares in a property and are insured under a buildings insurance policy. What is the likely position in law of a breach of good faith by one party, which was unknown to the other party?
- A. Cover for both parties would be invalidated as the cover is likely to be a composite policy.
- B. Cover would be maintained in full for the innocent party as the cover is likely to be a composite policy.
- C. Cover would be maintained in full for the innocent party as the cover is likely to be a joint policy
- D. Cover for both parties would be invalidated as the cover is likely to be a joint policy.
Answer: D
NEW QUESTION 37
According to statute law, an unfair term in a consumer insurance contract is defined as one which
- A. provides insurance where the scope of cover is narrow compared to the premium charged.
- B. has been individually negotiated and is to the detriment of either one of the parties.
- C. causes a significant imbalance in the parties' rights to the detriment of the consumer.
- D. does not restrict liability for death or personal injury.
Answer: C
NEW QUESTION 38
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 State
- B. The insurer only.
- C. It is shared between the insurer and the insured.
- D. The insured only.
Answer: D
NEW QUESTION 39
Tim is a local insurance broker. He has authority to receive premiums for a personal lines insurer and earns commission from the insurer for sales. Paul, an elderly customer, asked Tim for advice regarding his personal insurance requirements and to assist with completing the proposal form for household insurance. In these circumstances, who, if anyone, is Tim's principal?
- A. Both the insurer and Paul at different times.
- B. Paul as it is a consumer contract.
- C. The insurer at all times.
- D. No one as Tim is not a party to the insurance contract.
Answer: C
NEW QUESTION 40
What are the main objectives of the principle of insurable interest?
- A. To reduce moral hazard and to discourage profiteering.
- B. To reduce moral hazard and to discourage wagering.
- C. To reduce physical hazard and to discourage wagering.
- D. To reduce physical hazard and to discourage profiteering.
Answer: B
NEW QUESTION 41
What is the most common for of corporation?
- A. Chartered corporation.
- B. Statutory corporation.
- C. Corporation sole.
- D. Registered corporation.
Answer: D
NEW QUESTION 42
In respect of a life assurance policy, the duty to take reasonable care NOT to make a misrepresentation ends when the proposer
- A. assigns the contract to a third party.
- B. signs and submits the completed proposal form to the insurer.
- C. dies and his estate submits a claim to the insurer.
- D. forms the contract with the insurer.
Answer: D
NEW QUESTION 43
Which divisional court of the High Court includes a Commercial Court?
- A. Queen's Bench Division.
- B. Family Division.
- C. Chancery Division.
- D. Partnership Division.
Answer: C
NEW QUESTION 44
Insurance agencies are usually created by way of
- A. implied agreement.
- B. express agreement.
- C. deed of agreement.
- D. unilateral agreement.
Answer: B
NEW QUESTION 45
For this question more than 1 option is correct. You must select ail the correct options to gain the mark.
In what circumstances does the Fires Prevention (Metropolis) Act 1774 require insurance companies to ensure that claims monies are used to rebuild or reinstate buildings destroyed or damaged by fire?
- A. Where the building was destroyed by an explosion.
- B. Upon the request of any person(s) interested in the buildings.
- C. When fraud or arson by the insured is suspected.
- D. Where there is underinsurance.
Answer: B,C
NEW QUESTION 46
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. Disclosure of the name of the principal.
- B. Death of the agent.
- C. Bankruptcy of the principal.
- D. Bankruptcy of the agent.
Answer: B,C
NEW QUESTION 47
In the tort of negligence, a primary victim of nervous shock is a class of person who suffers psychiatric injury
- A. as a result of grief or sorrow for the loss of a person with whom he had a close relationship.
- B. as a result of stress or harassment at work.
- C. through fear for the safety of another person involved in an accident which he witnessed.
- D. through fear for his own safety in an accident.
Answer: D
NEW QUESTION 48
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