LM1 - CII Exam Newest 2026 Complete Questions | With 100% Correct
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By sharing information about their risk, the insured satisfies which obligation? - (answer)Good faith
The proximate cause of a loss will always be the - (answer)Dominant cause
Which insurance principle gives an insurer the right to call upon other insurers to share in the settling of
a claim? - (answer)Contribution
A building valued at £250,000 is jointly owned by Karen and Terry, who each individually arrange
insurance on it. Karen insures the building for £100,000, whilst Terry insures it for £150,000. If a valid
claim of £55,000 occurs how much is each insurer liable to pay? - (answer)Karen's insurer is liable for
£22,000 and Terry's for £33,000.
An insurer arranges for a policyholder's car to be repaired following damage by a negligent third party
motorist. Under which insurance principle can the insurer recover the paid claim? - (answer)Subrogation
Which insurance principle ensures that in the event of a loss the insured is placed in the same financial
position as he was immediately prior to the loss? - (answer)Indemnity
The protection of jobs is classed as which type of function of insurance? - (answer)A secondary function
of insurance only
Which type of risk arises from a cause outside the control of any one individual and affects a large
number of people? - (answer)Fundamental risk
For an individual, which class of risk is always uninsurable? - (answer)Speculative risk
The subjective judgment that individuals or organisations make about the characteristics and severity of
a risk is known as - (answer)Risk perception
, LM1 - CII Exam Newest 2026 Complete Questions | With 100% Correct
Answers graded A+ Guaranteed Success!!
In relation to insurance, a peril is - (answer)An event that may give rise to a loss
The calculation of what involves the use of the law of large numbers? - (answer)Equitable premiums
What is the most likely impact, if any, on a commercial insurer if it fails to implement an effective claims-
handling process? - (answer)The reputation of the insurer will be affected
A proposer for an insurance policy who has previously made fraudulent insurance claims would be
classed by an underwriter as a - (answer)Poor moral hazard
Where the premiums of the many pay the losses of the few, this is known as - (answer)Pooling of risks
What is the basic purpose of insurance? - (answer)To transfer risks
What class of insurance protects the policyholder from the nationalisation of their overseas assets by a
foreign government? - (answer)Political risks
Cargo carried by an airline will usually be covered under what class of business? - (answer)Marine
What class of insurance would respond to claims made against a lawyer in respect of advice given to fee
paying clients? - (answer)Professional indemnity
What class of insurance can provide cover for loss of attraction or denial of access to the insured's
premises? - (answer)Business interruption
Answers graded A+ Guaranteed Success!!
By sharing information about their risk, the insured satisfies which obligation? - (answer)Good faith
The proximate cause of a loss will always be the - (answer)Dominant cause
Which insurance principle gives an insurer the right to call upon other insurers to share in the settling of
a claim? - (answer)Contribution
A building valued at £250,000 is jointly owned by Karen and Terry, who each individually arrange
insurance on it. Karen insures the building for £100,000, whilst Terry insures it for £150,000. If a valid
claim of £55,000 occurs how much is each insurer liable to pay? - (answer)Karen's insurer is liable for
£22,000 and Terry's for £33,000.
An insurer arranges for a policyholder's car to be repaired following damage by a negligent third party
motorist. Under which insurance principle can the insurer recover the paid claim? - (answer)Subrogation
Which insurance principle ensures that in the event of a loss the insured is placed in the same financial
position as he was immediately prior to the loss? - (answer)Indemnity
The protection of jobs is classed as which type of function of insurance? - (answer)A secondary function
of insurance only
Which type of risk arises from a cause outside the control of any one individual and affects a large
number of people? - (answer)Fundamental risk
For an individual, which class of risk is always uninsurable? - (answer)Speculative risk
The subjective judgment that individuals or organisations make about the characteristics and severity of
a risk is known as - (answer)Risk perception
, LM1 - CII Exam Newest 2026 Complete Questions | With 100% Correct
Answers graded A+ Guaranteed Success!!
In relation to insurance, a peril is - (answer)An event that may give rise to a loss
The calculation of what involves the use of the law of large numbers? - (answer)Equitable premiums
What is the most likely impact, if any, on a commercial insurer if it fails to implement an effective claims-
handling process? - (answer)The reputation of the insurer will be affected
A proposer for an insurance policy who has previously made fraudulent insurance claims would be
classed by an underwriter as a - (answer)Poor moral hazard
Where the premiums of the many pay the losses of the few, this is known as - (answer)Pooling of risks
What is the basic purpose of insurance? - (answer)To transfer risks
What class of insurance protects the policyholder from the nationalisation of their overseas assets by a
foreign government? - (answer)Political risks
Cargo carried by an airline will usually be covered under what class of business? - (answer)Marine
What class of insurance would respond to claims made against a lawyer in respect of advice given to fee
paying clients? - (answer)Professional indemnity
What class of insurance can provide cover for loss of attraction or denial of access to the insured's
premises? - (answer)Business interruption
