LM1 - CII Exam Newest 2026 Questions
and Correct Detailed Answers Already
Graded A+
What is the most likely impact, if any, on a commercial insurer if it fails to
implement an effective claims-handling process? - CORRECT ANSWER-The
reputation of the insurer will be affected
A proposer for an insurance policy who has previously made fraudulent insurance
claims would be classed by an underwriter as a - CORRECT ANSWER-Poor
moral hazard
Where the premiums of the many pay the losses of the few, this is known as -
CORRECT ANSWER-Pooling of risks
What is the basic purpose of insurance? - CORRECT ANSWER-To transfer
risks
,What class of insurance protects the policyholder from the nationalisation of their
overseas assets by a foreign government? - CORRECT ANSWER-Political
risks
Cargo carried by an airline will usually be covered under what class of business? -
CORRECT ANSWER-Marine
What class of insurance would respond to claims made against a lawyer in respect
of advice given to fee paying clients? - CORRECT ANSWER-Professional
indemnity
What class of insurance can provide cover for loss of attraction or denial of access
to the insured's premises? - CORRECT ANSWER-Business interruption
By sharing information about their risk, the insured satisfies which obligation? -
CORRECT ANSWER-Good faith
The proximate cause of a loss will always be the - CORRECT ANSWER-
Dominant cause
, Which insurance principle gives an insurer the right to call upon other insurers to
share in the settling of a claim? - CORRECT ANSWER-Contribution
A building valued at £250,000 is jointly owned by Karen and Terry, who each
individually arrange insurance on it. Karen insures the building for £100,000,
whilst Terry insures it for £150,000. If a valid claim of £55,000 occurs how much is
each insurer liable to pay? - CORRECT ANSWER-Karen's insurer is liable for
£22,000 and Terry's for £33,000.
An insurer arranges for a policyholder's car to be repaired following damage by a
negligent third party motorist. Under which insurance principle can the insurer
recover the paid claim? - CORRECT ANSWER-Subrogation
Which insurance principle ensures that in the event of a loss the insured is placed
in the same financial position as he was immediately prior to the loss? -
CORRECT ANSWER-Indemnity
The protection of jobs is classed as which type of function of insurance? -
CORRECT ANSWER-A secondary function of insurance only
and Correct Detailed Answers Already
Graded A+
What is the most likely impact, if any, on a commercial insurer if it fails to
implement an effective claims-handling process? - CORRECT ANSWER-The
reputation of the insurer will be affected
A proposer for an insurance policy who has previously made fraudulent insurance
claims would be classed by an underwriter as a - CORRECT ANSWER-Poor
moral hazard
Where the premiums of the many pay the losses of the few, this is known as -
CORRECT ANSWER-Pooling of risks
What is the basic purpose of insurance? - CORRECT ANSWER-To transfer
risks
,What class of insurance protects the policyholder from the nationalisation of their
overseas assets by a foreign government? - CORRECT ANSWER-Political
risks
Cargo carried by an airline will usually be covered under what class of business? -
CORRECT ANSWER-Marine
What class of insurance would respond to claims made against a lawyer in respect
of advice given to fee paying clients? - CORRECT ANSWER-Professional
indemnity
What class of insurance can provide cover for loss of attraction or denial of access
to the insured's premises? - CORRECT ANSWER-Business interruption
By sharing information about their risk, the insured satisfies which obligation? -
CORRECT ANSWER-Good faith
The proximate cause of a loss will always be the - CORRECT ANSWER-
Dominant cause
, Which insurance principle gives an insurer the right to call upon other insurers to
share in the settling of a claim? - CORRECT ANSWER-Contribution
A building valued at £250,000 is jointly owned by Karen and Terry, who each
individually arrange insurance on it. Karen insures the building for £100,000,
whilst Terry insures it for £150,000. If a valid claim of £55,000 occurs how much is
each insurer liable to pay? - CORRECT ANSWER-Karen's insurer is liable for
£22,000 and Terry's for £33,000.
An insurer arranges for a policyholder's car to be repaired following damage by a
negligent third party motorist. Under which insurance principle can the insurer
recover the paid claim? - CORRECT ANSWER-Subrogation
Which insurance principle ensures that in the event of a loss the insured is placed
in the same financial position as he was immediately prior to the loss? -
CORRECT ANSWER-Indemnity
The protection of jobs is classed as which type of function of insurance? -
CORRECT ANSWER-A secondary function of insurance only
