Last Updated: Aug 25, 2026
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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Interpretation and Vitiation of Insurance Contracts | 15% | - Factors vitiating the contract - Rules of construction - Warranties, conditions and exceptions |
| Topic 2: Nature and Sources of English Law | 15% | - Sources of law: statute, common law, EU influence - Legal system and structure - Legal personality and capacity |
| Topic 3: Law of Agency | 10% | - Authority, rights and duties - Application to insurance intermediaries - Creation and types of agency |
| Topic 4: Formation of Insurance Contracts | 15% | - Utmost good faith and disclosure - Offer, acceptance and consideration - Insurable interest |
| Topic 5: Claims and Indemnity Principles | 15% | - Measure of indemnity - Subrogation and contribution - Notification and proof of loss |
| Topic 6: Law of Torts | 15% | - Principles of negligence - Other torts: trespass, nuisance, breach of statutory duty - Application to liability insurance |
| Topic 7: Law of Contract | 15% | - Essentials of a valid contract - Terms, conditions and representations - Breach and remedies |
Question 1
John owns stock that he intentionally insured for £15,000, although the full value of the stock is £18.000. His insurance policy has no excess and is subject to a pro rata condition of average. In the event of water damaging
£6.000 of John's stock, how much will the insurer pay for a valid claim after the application of average?
A. £6,000
B. £3,000
C. £5,000
D. £15,000
Question 2
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. Bankruptcy of the agent.
C. Disclosure of the name of the principal.
D. Bankruptcy of the principal.
Question 3
A riot results in a shop being damaged and the shopowner's insurer settling the claim. A subrogation right enabling the insurer to sue the police authority arises under
A. a condition subsequent to liability.
B. statute.
C. tort.
D. a condition precedent to liability.
Question 4
Ambiguous terms in a household insurance contract are generally construed against the
A. policyholder due to the literal rule.
B. insurer due to the contra proferentem rule.
C. insurer due to the ejusdem generis rule.
D. policyholder due to the noscitur a sociis rule.
Question 5
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. provide reasonable guidance to an insured to help him make a claim.
B. settle a claim promptly once settlement has been agreed.
C. handle a claims notification within 14 days.
D. not unreasonably reject an insured's claim.
Solutions:
| Question 1 Answer: C | Question 2 Answer: A,D | Question 3 Answer: B | Question 4 Answer: B | Question 5 Answer: A,B,D |
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