Page 179 - W01TB8_2017-18_[low-res]_F2F_Neat

Self-test answers v

Chapter 5 self-test answers

1. A positive duty voluntarily to disclose, accurately and fully, all facts material to the risk being
proposed, whether requested or not.
2. The principle applies equally to both proposer and insurer. In addition, it applies to any
intermediary acting on behalf of their principal, whether policyholder or insurer.
3. The common law position of utmost good faith, which means disclosure requirements exist up to the
inception of the policy, are revived at renewal and can be altered by policy conditions to require
continuing disclosure of material changes.
4. A material fact is one which would influence the judgment of a prudent insurer fixing the premium or
determining whether he will take the risk.
5. Your answers will have included some of the following:
• Previous claims history.
• Previous refusals to insure.
• Criminal convictions.
• A lack of good management of business premises.
• Excessive or wilful carelessness.
6. • Matters of law.
• Factors which lessen the risk.
• Facts known by the insurers.
• Facts which the insurers ought to know.
• Information that is waived by the insurers.
• Facts that are outside the scope of specific questions.
• Facts which an investigation of the risk ought to have revealed. Reference copy for CII Face to Face Training
• Facts which the proposer does not know.
• ‘Spent’ convictions.

7. The insurer may set the contract aside ab initio (from the beginning), which means that the insurer
will refuse to pay the claim in question or any others.
8. Non-disclosure is failing to reveal a material fact. Misrepresentation is when a material fact is stated
wrongly or is exaggerated.