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CII E05 exam is a two-hour paper consisting of 100 multiple-choice questions. E05 exam assesses the candidate's knowledge of the law relating to insurance contracts, including the formation and termination of contracts, the principles of indemnity and subrogation, and the legal liabilities of insurers and policyholders.
CII E05 examination is a crucial element of the M05 Insurance Law module, which is one of the mandatory modules of the CII Advanced Diploma in Insurance qualification. E05 exam is designed to test the candidate's knowledge and understanding of the legal framework of insurance and the principles of insurance contracts.
NEW QUESTION # 23
In respect of a life assurance policy, the duty to take reasonable care NOT to make a misrepresentation ends when the proposer
- A. dies and his estate submits a claim to the insurer.
- B. signs and submits the completed proposal form to the insurer.
- C. forms the contract with the insurer.
- D. assigns the contract to a third party.
Answer: C
NEW QUESTION # 24
A claimant may possibly recover money transferred under an illegal contract when
- A. the contract is against public policy but not substantive law.
- B. the illegality makes the contract voidable rather than void.
- C. the legal portion of the contract can be severed from the illega portion.
- D. both parties to the contract are equal in wrongdoing.
Answer: D
NEW QUESTION # 25
A person insures her own life under a life insurance policy but does so expressly for the benefit of another. To facilitate this, which type of arrangement is most commonly established?
- A. Coinsurance.
- B. Power of Attorney.
- C. Lien.
- D. Trust.
Answer: D
NEW QUESTION # 26
Why may an insurer insert a continuing warranty into an insurance policy?
- A. To ensure that underinsurance is avoided at all times.
- B. To encourage good risk management by the insured throughout the policy period.
- C. To maintain the annual aggregate limit of liability throughout the policy period.
- D. To enable an insurer to charge an additional premium if the warranty is continually breached.
Answer: B
NEW QUESTION # 27
Two liability policies with different insurers cover the same loss of £15,000,000. The limit of liability is
£10,000,000 under policy X and £20,000,000 under policy Y. Neither policy has a non-contribution clause.
What amount will policy Y contribute towards the claim payment?
- A. £10,000,000
- B. £7,500,000
- C. £9,000,000
- D. £5,000,000
Answer: C
NEW QUESTION # 28
What are the main objectives of the principle of insurable interest?
- A. To reduce physical hazard and to discourage wagering.
- B. To reduce physical hazard and to discourage profiteering.
- C. To reduce moral hazard and to discourage wagering.
- D. To reduce moral hazard and to discourage profiteering.
Answer: C
NEW QUESTION # 29
As a result of a breach of good faith under a commercial insurance policy, the insurer avoided the policy as a whole, but was NOT permitted to retain the premium because
- A. the misrepresentation was fraudulent.
- B. no claim had been submitted or paid.
- C. the premium was paid by monthly installments.
- D. the misrepresentation was innocent.
Answer: D
NEW QUESTION # 30
When, if at all, does the duty of fair presentation of a risk apply after a non-consumer insurance contract has been formed?
- A. Where there is a variation in the insured risk.
- B. On submission of a claim.
- C. It does not apply as the duty is to take reasonable care not to make a misrepresentation.
- D. From the date of a breach of warranty.
Answer: A
NEW QUESTION # 31
A breach of warranty under the general law of contract legally entitles an injured party to
- A. avoid the contract from the date of the breach.
- B. obtain specific performance.
- C. avoid the contract ab initio.
- D. claim damages.
Answer: D
NEW QUESTION # 32
For this question more than 1 option is correct. You must select all the correct options to gain the mark. What are the main sources of new English Law?
- A. Legislation.
- B. Official law reports.
- C. International treaties.
- D. Case law.
Answer: A,D
NEW QUESTION # 33
At what stage is insurable interest required for a marine cargo insurance policy?
- A. At the time of the loss only.
- B. At both inception of the policy and at the time of the loss.
- C. Throughout the duration of the contract.
- D. At inception of the policy only.
Answer: A
NEW QUESTION # 34
For this question more than 1 option is correct. You must select all the correct options to gain the mark.
A proposer for private motorcycle insurance carelessly states the motorcycle's engine capacity as 500cc when in fact it is 1500cc. A policy is issued by the insurer on this basis. In the event of a valid claim causing damage to the motorcycle, what potential remedies are available to the insurer under the Consumer Insurance (Disclosure and Representations) Act 2012?
- A. Apply any terms it would have applied if the misrepresentation had not taken place.
- B. Reduce the claim amount in proportion to the premium it would have charged.
- C. Avoid the contract, refuse all claims and keep the premium.
- D. Reject the claim, but maintain the policy.
Answer: A,B
NEW QUESTION # 35
In the tort of negligence, a primary victim of nervous shock is a class of person who suffers psychiatric injury
- A. through fear for the safety of another person involved in an accident which he witnessed.
- B. as a result of stress or harassment at work.
- C. through fear for his own safety in an accident.
- D. as a result of grief or sorrow for the loss of a person with whom he had a close relationship.
Answer: C
NEW QUESTION # 36
For this question more than 1 option is correct. You must select fill the correct options to gain the mark. In what circumstances would an agency agreement be automatically terminated?
- A. Death of the agent.
- B. Disclosure of the name of the principal.
- C. Bankruptcy of the agent.
- D. Bankruptcy of the principal.
Answer: A,D
NEW QUESTION # 37
Insurance agencies are usually created by way of
- A. deed of agreement.
- B. express agreement.
- C. unilateral agreement.
- D. implied agreement.
Answer: B
NEW QUESTION # 38
Ambiguous terms in a household insurance contract are generally construed against the
- A. insurer due to the contra proferentem rule.
- B. policyholder due to the noscitur a sociis rule.
- C. insurer due to the ejusdem generis rule.
- D. policyholder due to the literal rule.
Answer: A
NEW QUESTION # 39
When a defendant deliberately destroys possessions belonging to someone else, he has committed the tort(s) of
- A. trespass to goods, conversion and nuisance only,
- B. trespass to goods, conversion, nuisance and battery.
- C. trespass to goods only.
- D. trespass to goods and conversion only.
Answer: C
NEW QUESTION # 40
Within what time period, from the date when the damage first began, does the owner of an office block have a right to sue the builder for negligent construction work?
- A. 15 years.
- B. 6 years.
- C. 3 years.
- D. 9 years.
Answer: C
NEW QUESTION # 41
For this question more than 1 option is correct. You must select all the correct options to gain the mark. How may double insurance arise?
- A. The inadvertent non-cancellation of a policy when a new policy is taken out.
- B. An overlap in cover between two different types of insurance policy.
- C. A deliberate attempt to obtain the proceeds of two policies.
- D. A merger between two major insurance companies.
Answer: B,C
NEW QUESTION # 42
For this question more than 1 option is correct. You must select all the correct options to gain the mark.
The Insurance: Conduct of Business sourcebook (ICOBS) rules in respect of claims handling specify that an insurer must
- A. settle a claim promptly once settlement has been agreed.
- B. provide reasonable guidance to an insured to help him make a claim.
- C. handle a claims notification within 14 days.
- D. not unreasonably reject an insured's claim.
Answer: A,B,D
NEW QUESTION # 43
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