Review Guide
**Question 1.** Which of the following best describes a “Manuscript Policy” in industrial
insurance?
A) A pre‑printed standard form used for all small commercial accounts
B) A policy drafted specifically for a single insured’s unique exposures
C) A policy that can only be issued by a re‑insurer
D) A policy that automatically includes all optional coverages
Answer: B
Explanation: Manuscript policies are customized contracts created to address the specific, often
complex, risks of a single large‑scale or industrial insured, unlike off‑the‑shelf standard forms.
**Question 2.** In a Global Insurance Program, the “Master Policy” primarily serves to:
A) Provide local regulatory compliance for each jurisdiction
B) Establish a uniform set of coverages and terms for all participating entities
C) Replace all local fronting policies worldwide
D) Determine the premium tax rate for each country
Answer: B
Explanation: The Master Policy sets the overarching coverage, limits, and conditions that apply
across all locations, ensuring consistency while local fronting policies address jurisdictional
specifics.
**Question 3.** Which risk is most characteristic of the “Energy & Renewable” specialty line?
A) Product liability for consumer goods
B) Wind turbine blade failure due to fatigue
C) Cyber‑theft of personal data
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D) Marine hull damage from collisions
Answer: B
Explanation: Wind turbine blade fatigue is a key physical risk unique to renewable energy
installations, especially wind farms.
**Question 4.** The term “Freedom of Service” (FOS) within the EU insurance market refers to:
A) The right of insurers to sell policies without a local license, provided they meet certain
conditions
B) The mandatory use of a single EU‑wide standard policy form
C) A requirement that all premiums be paid in euros
D) The exemption of insurers from all local tax obligations
Answer: A
Explanation: FOS allows insurers licensed in one EU member state to provide services in
another, subject to compliance with local regulations and the “deemed admitted” principle.
**Question 5.** In Business Interruption (BI) coverage, the “Indemnity Period” typically defines:
A) The maximum time the insurer will pay for loss of profits after a loss event
B) The period during which the insured must rebuild the damaged property
C) The duration of the policy term
D) The time allowed for the insured to file a claim
Answer: A
Explanation: The indemnity period is the length of time (often 12–24 months) the insurer will
cover loss of income and extra expenses following a covered interruption.
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**Question 6.** Which of the following is a primary purpose of “Accumulation Control” in
underwriting?
A) To limit the number of policies an insurer can issue in a calendar year
B) To prevent excessive exposure to losses from a single event or geographic zone
C) To ensure premiums are collected before claims are paid
D) To allocate re‑insurance treaties evenly across all lines
Answer: B
Explanation: Accumulation control monitors and limits the insurer’s exposure to large,
correlated losses, such as those arising from a single catastrophe zone.
**Question 7.** A “Delay in Start‑Up” (DSU) endorsement is most commonly attached to which
type of insurance?
A) Marine Cargo
B) Engineering & Construction
C) Directors & Officers (D&O)
D) Professional Indemnity
Answer: B
Explanation: DSU coverage protects contractors against financial loss when a project’s
commissioning is delayed beyond the agreed schedule.
**Question 8.** Which regulatory body is responsible for overseeing insurance activities in the
United Kingdom?
A) BaFin
B) FCA
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C) ACPR
D) CNBV
Answer: B
Explanation: The Financial Conduct Authority (FCA) regulates insurers, brokers, and
intermediaries in the UK market.
**Question 9.** In the context of cyber insurance, “Ransomware” coverage typically includes:
A) Replacement of physical hardware destroyed by a virus
B) Payment of ransom demands and associated incident response costs
C) Compensation for loss of life due to cyber attacks
D) Coverage for employee salaries during system downtime
Answer: B
Explanation: Cyber policies often cover ransom payments, data restoration, legal fees, and crisis
management expenses related to ransomware incidents.
**Question 10.** Which of the following is NOT a typical component of a “Hull and Machinery”
marine policy?
A) Damage to the vessel’s structure
B) Loss of cargo while in transit
C) Engine breakdown coverage
D) Liability for third‑party property damage
Answer: B