10 Questions
Which of the following proposer details is NOT primarily used for identification and communication purposes?
Proposer's Occupation
What is the primary reason for inquiring about a proposer's occupation?
To identify potential physical and/or moral hazards
What is the primary purpose of inquiring about a proposer's insurance history?
To identify potential underwriting risks
What is the primary purpose of inquiring about the subject matter of insurance?
To assess the sum insured
What is the primary purpose of inquiring about the loss story?
To assess potential physical and/or moral hazards
What type of condition is the 'claim condition' an example of?
Express condition
How many implied conditions does the law read into any contract of insurance?
Four
Which of the following is an implied condition in an insurance contract?
Duty of utmost good faith
What is one of the implied conditions that the law reads into any contract of insurance?
The subject matter insured is actually in existence
What is another way to describe an 'implied condition' in an insurance contract?
Unwritten term
Study Notes
Insurance Application Questions
Proposer's Information
- Proposer's name is required for identification and communication purposes.
- Proposer's address and situation of risk are necessary for underwriting and communication.
Occupation and Insurance History
- Proposer's occupation is important for underwriting, as it may indicate physical and/or moral hazard.
- Insurance history is crucial for underwriting, including details of previous insurers who declined or refused to renew.
Risk Assessment
- Loss story is important for underwriting, as it may indicate poor physical and/or moral hazard.
Policy Details
- Sum insured is required to assess premium and determine the need for reinsurance.
- The limit of indemnity is specified in liability insurance.
Subject Matter
- A detailed description and situation of the subject matter of insurance are necessary for identification and underwriting decisions.
Express Conditions
- Appear explicitly in the policy document
- Examples: claim conditions and cancellation conditions
Implied Conditions
- Conditions that the law implies in any contract of insurance, but not explicitly stated in the contract
- Four key implied conditions:
- Insurable interest: the insured must have a legitimate interest in the subject matter
- Duty of Utmost Good Faith (U.G.F): parties must observe good faith and honesty
- Existence of subject matter: the insured subject matter must exist at the time of the contract
- Identifiability of subject matter: the insured subject matter must be clearly identifiable
Test your knowledge of insurance underwriting principles, including proposer information, risk assessment, and insurance history.
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