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London Market 1 (LM1) - Insurance
Questions and Correct Answers/ Latest
Update / Already Graded
For the principle of contribution to apply, a number of factors need to
be present. What would NOT typically be one of these?
The peril that causes the loss must be common to both policies.
b. There must be a common subject-matter.
c. Both policies must share a common insurable interest.
d. Both insurers' policies have to be identical.
Ans: d. Both insurers' policies have to be identical.
Is this definition of supply and demand, correct?
"Supply is the provision of something and demand is the need for
something but only at a certain price."
Ans: Yes
How might a change in the law making more classes of insurance
compulsory impact on supply and demand?
All rights reserved © 2025/ 2026 |
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1) Greater demand will be created.
2) Greater demand will be created at the start but reduce later.
Ans: Greater demand will be created (1)
Who do Lloyd's Names use as their professional advisers when
deciding to invest in the market?
1) Member agents
2) Brokers
3) Managing agents
Ans: Member agents (1)
What is meant by the term 'premium income limit'?
1) A measure of the size of the insurer based on how much business it
can accept in a year.
2) How much premium any individual client can be asked to pay.
3) How little premium any individual client can be asked to pay
4) The target set by the regulators for insurers each year.
All rights reserved © 2025/ 2026 |
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Ans: 1) A measure of the size of the insurer based on how much
business it can accept in a year.
Which type of insurer typically specialises in risks such as shipowners'
liability?
Ans: Mutual indemnity association.
For whom is the broker usually working in the London Market?
1) Insurer
2) Which ever party contacts the broker first
3) Insured
4) both insured and insurer
Ans: 3) Insured
Which section of the market does the LMA represent?
A) Mutual Indemnity associations
B) Insurance companies
C) The regulators
All rights reserved © 2025/ 2026 |
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D) Managing Agents
Ans: D) Managing Agents
Money Laundering - What is placement?
Ans: Putting cash into other financial assets, such as cheques
or property.
Money Laundering - What is layering?
Ans: Criminal creates a series of complex transactions, to avoid
cash being traced to illegal origins.
Money Laundering - What is integration?
Ans: Criminal gets access to clean money.
Which of these different types of information about a risk would an
overseas
regulator not be interested in?
1) Location of Risk
2) Amount of gross premium paid
All rights reserved © 2025/ 2026 |
London Market 1 (LM1) - Insurance
Questions and Correct Answers/ Latest
Update / Already Graded
For the principle of contribution to apply, a number of factors need to
be present. What would NOT typically be one of these?
The peril that causes the loss must be common to both policies.
b. There must be a common subject-matter.
c. Both policies must share a common insurable interest.
d. Both insurers' policies have to be identical.
Ans: d. Both insurers' policies have to be identical.
Is this definition of supply and demand, correct?
"Supply is the provision of something and demand is the need for
something but only at a certain price."
Ans: Yes
How might a change in the law making more classes of insurance
compulsory impact on supply and demand?
All rights reserved © 2025/ 2026 |
, Page |2
1) Greater demand will be created.
2) Greater demand will be created at the start but reduce later.
Ans: Greater demand will be created (1)
Who do Lloyd's Names use as their professional advisers when
deciding to invest in the market?
1) Member agents
2) Brokers
3) Managing agents
Ans: Member agents (1)
What is meant by the term 'premium income limit'?
1) A measure of the size of the insurer based on how much business it
can accept in a year.
2) How much premium any individual client can be asked to pay.
3) How little premium any individual client can be asked to pay
4) The target set by the regulators for insurers each year.
All rights reserved © 2025/ 2026 |
, Page |3
Ans: 1) A measure of the size of the insurer based on how much
business it can accept in a year.
Which type of insurer typically specialises in risks such as shipowners'
liability?
Ans: Mutual indemnity association.
For whom is the broker usually working in the London Market?
1) Insurer
2) Which ever party contacts the broker first
3) Insured
4) both insured and insurer
Ans: 3) Insured
Which section of the market does the LMA represent?
A) Mutual Indemnity associations
B) Insurance companies
C) The regulators
All rights reserved © 2025/ 2026 |
, Page |4
D) Managing Agents
Ans: D) Managing Agents
Money Laundering - What is placement?
Ans: Putting cash into other financial assets, such as cheques
or property.
Money Laundering - What is layering?
Ans: Criminal creates a series of complex transactions, to avoid
cash being traced to illegal origins.
Money Laundering - What is integration?
Ans: Criminal gets access to clean money.
Which of these different types of information about a risk would an
overseas
regulator not be interested in?
1) Location of Risk
2) Amount of gross premium paid
All rights reserved © 2025/ 2026 |
