Question 1

The purpose of the EU solvency requirements for insurers and intermediaries is to

Options :

A : create a standard format for the presentation of accounting data.

B : introduce monitoring procedures by the Prudential Regulation Authority.

C : provide authorisation to transact insurance business.

D : strengthen the financial security of the insurer or intermediary.

Answer: A

Question 2

The website of an insurer must include the company's registered name, trading address, contact details and regulator. This is in accordance with rules enforced by the

Options :

A : Advertising Standards Authority.

B : Competition and Markets Authority.

C : Prudential Regulation Authority.

D : Financial Ombudsman Service.

Answer: D

Question 3

John and his wife arrange a household contents insurance policy in joint names with insurer A for a sum insured of £10,000. His wife arranges a second policy on the same basis with insurer B for a sum insured of £20,000. Both policies have identical terms and conditions. What is insurer A's liability if a valid claim of £3,000 is subsequently made?

Options :

A : £1,000

B : £1,500

C : £2,000

D : £3,000

Answer: A

Question 4

If an insurer invokes the cancellation clause to cancel a policy mid-year due to a change in the risk, how much of the premium, if anything, is normally returned to the policyholder?

Options :

A : The full year-s premium less a fixed nominal charge.

B : The full year-s premium.

C : None of the premium.

D : A pro rata amount.

Answer: A

Question 5

Who cedes business to a reinsurer?

Options :

A : The insurer.

B : The assessor.

C : The agent.

D : The insured.

Answer: A