LM1 CII UPDATED COMPREHENSIVE EXAM
2026 QUESTIONS WITH SOLUTIONS GRADED
A+
◉ What is a material fact? Answer: A fact that would influence an
insurer's decision to accept or rate a risk.
◉ Who must observe utmost good faith in insurance? Answer: Both the
insurer and the insured.
◉ Why is utmost good faith important in insurance contracts? Answer:
Because insurers rely on information provided by the insured to assess
risk accurately.
◉ What does non-disclosure mean? Answer: Failure to tell the insurer
about a material fact before the contract is agreed.
◉ What does misrepresentation mean in insurance? Answer: Providing
false or misleading information to the insurer.
, ◉ What legislation governs consumer disclosure duties? Answer: The
Consumer Insurance (Disclosure and Representations) Act 2012
(CIDRA).
◉ What legislation governs commercial disclosure duties? Answer: The
Insurance Act 2015.
◉ What is the duty of fair presentation under the Insurance Act 2015?
Answer: The insured must disclose every material circumstance they
know or ought to know in a clear and accessible manner.
◉ What must an insurer do if they believe disclosure has been
inadequate? Answer: They must prove that the insured failed to make a
fair presentation and that the failure was material to the decision.
◉ What are the remedies for deliberate or reckless non-disclosure under
the Insurance Act 2015? Answer: The insurer may avoid the policy and
keep the premium.
◉ What are the remedies for careless non-disclosure under the Insurance
Act 2015? Answer: The insurer may reduce the claim or amend the
terms as if the correct information had been given.
◉ What is meant by avoidance of a policy? Answer: The policy is
treated as if it never existed, and the insurer is not liable for claims.
2026 QUESTIONS WITH SOLUTIONS GRADED
A+
◉ What is a material fact? Answer: A fact that would influence an
insurer's decision to accept or rate a risk.
◉ Who must observe utmost good faith in insurance? Answer: Both the
insurer and the insured.
◉ Why is utmost good faith important in insurance contracts? Answer:
Because insurers rely on information provided by the insured to assess
risk accurately.
◉ What does non-disclosure mean? Answer: Failure to tell the insurer
about a material fact before the contract is agreed.
◉ What does misrepresentation mean in insurance? Answer: Providing
false or misleading information to the insurer.
, ◉ What legislation governs consumer disclosure duties? Answer: The
Consumer Insurance (Disclosure and Representations) Act 2012
(CIDRA).
◉ What legislation governs commercial disclosure duties? Answer: The
Insurance Act 2015.
◉ What is the duty of fair presentation under the Insurance Act 2015?
Answer: The insured must disclose every material circumstance they
know or ought to know in a clear and accessible manner.
◉ What must an insurer do if they believe disclosure has been
inadequate? Answer: They must prove that the insured failed to make a
fair presentation and that the failure was material to the decision.
◉ What are the remedies for deliberate or reckless non-disclosure under
the Insurance Act 2015? Answer: The insurer may avoid the policy and
keep the premium.
◉ What are the remedies for careless non-disclosure under the Insurance
Act 2015? Answer: The insurer may reduce the claim or amend the
terms as if the correct information had been given.
◉ What is meant by avoidance of a policy? Answer: The policy is
treated as if it never existed, and the insurer is not liable for claims.
