CII Insurance Legal and Regulatory (IF1) - IF1 Exam Questions [2026]

QUESTION NO: 1
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

A. Advertising Standards Authority. B. Prudential Regulation Authority. C. Financial Ombudsman Service. D. Competition and Markets Authority.

Correct Answer: C

QUESTION NO: 2
Sunita suffers a loss and makes a claim under her household contents insurance policy. When must insurable interest exist for her claim to be valid?

A. At the time of the proposal. B. At policy inception and at the time of the loss. C. At policy inception only. D. At the time of the loss only.

Correct Answer: B

QUESTION NO: 3
How does insurable interest arise, if at all. when an insurer arranges reinsurance?

A. Insurable interest does not arise. B. The policyholder is considered to have assigned the insurable interest to the insurer. C. The insurer is considered to have insurable interest by virtue of its liability to pay claims. D. Insurable interest is created by statute.

Correct Answer: C

QUESTION NO: 4
How would an insurer's portfolio of motor claims be shown in terms of frequency and severity?

A. Low frequency, low seventy. B. Low frequency, high seventy. C. High frequency, high seventy. D. High frequency, low severity.

Correct Answer: D

QUESTION NO: 5
When Susan applied for a new household contents insurance policy, she was obliged to disclose her extensive claims history. Such details are normally known as

A. warranties. B. contractual terms. C. indemnity. D. material circumstances.

Correct Answer: D

QUESTION NO: 6
If the amount to be paid in the event of a total loss of insured property is agreed between the proposer and the insurer at inception of the policy, this is a modification of the principle of

A. indemnity. B. subrogation. C. good faith. D. contribution.

Correct Answer: A

QUESTION NO: 7
A risk that is always insurable is a

A. speculative risk. B. fundamental risk. C. capital risk. D. pure risk.

Correct Answer: D

QUESTION NO: 8
In accordance with the principle of good faith, which facts must a potential policyholder disclose to the insurer when applying for insurance?

A. Any facts which are in the public domain. B. Any facts of law. C. Only those facts considered likely to reduce the cost of cover D. Any facts which are considered material to the risk.

Correct Answer: D

QUESTION NO: 9
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?

A. None of the premium. B. The full year's premium. C. The full year's premium less a fixed nominal charge. D. A pro rata amount.

Correct Answer: C

QUESTION NO: 10
Under the provisions of the Financial Services Act 2012. what action, if any, can the regulator take against a firm that has committed money laundering offences?

A. No action can be taken. B. Arbitration. C. Criminal prosecution. D. Civil proceedings.

Correct Answer: C