CAIB 1 EXAM WITH FULL PACK
SOLUTIONS
Transfer mof mrisk m- mbuy minsurance m
Avoidance mof mrisk m- mavoid mthe mchance mof mfinancial mloss
Controlling mof mrish m- mtaking mmeasures mto mreduce mthe mfrequency mand
msecuritu mof mloss
Retention mof mrisk m- mwhen ma mcompany mdecides mto mfinance mtheir mown
mlosses m- mcorrect manswers m-People mcan mchoose mto mdeal mwith mrisk min ma
mvariety mof mways. mIdentify mfour mpossible moptions mand mprovide ma mbrief
mexplanation mof meach.
Transfer mof mrisk mis mthe mmost mpractical m- mcorrect manswers m-Which mof
mthese moptions mis mmost mpractical mfor mmost mpeople?
1. mAgreement
2. mConsideration m
3. mLegality mof mobject m
, 4. mLegal mcapacity mof mthe mparties mto mcontract
5. mGenuine mintention m- mcorrect manswers m-Identify mthe mfive melements
mrequired mto mbe mpresent min mall mtypes mof mcontracts.
Individuals m- myes
Trade mnames m- mno
Corporations m-yes m- mcorrect manswers m-Indicate mwether mthe mfollowing mare
mpermitted mto menter minto ma mcontract:
Insurable minterest
Utmost mgood mfaith
Indemnity m- mcorrect manswers m-Insurance mcontracts mare mdifferent mfrom mall
mother mtypes mof mcontracts. mIdentify mthe mthree madditional melements mof
minsurance mcontracts mwhich mare mnot mrequired mof mother mtypes mof mcontracts.
Insured's m- mexpert madvice
mCompetitive mpricing mof mproducts
mCareful mand mprompt mattention mto
minstructions
Insurers m- mcollect mpremium m
mPassing mon mof mrelevant minformation m
mobtained mfrom mthe mclient m- mcorrect manswers m-State mtwo mduties mowed mby
mbrokers mto:
The mvalue mof mthe minsured's mproperty mas mit mexisted mimmediately mprior mto
mthe mloss m- mcorrect manswers m-What mpoint min mtime mis mused mby minsured mto
mmeasure mthe mamount mof mthe mindemnity mto mbe mpaid mby mthe mpolicy?
Insured's magency magreement m- mcorrect manswers m-Where mdoes mthe mbroker
mobtain mthe mauthority mto mbind man minsurer mon ma mrisk
Get mit min mwriting mas msoon mas mpossible m- mcorrect manswers m-What madvise
mwould myou mgive mto ma mbroker mwho mhas mprovided man moral mbinder mon ma
mrisk?
May mface man merrors mand momissions mclaim mwhich mwould mresult min mthe
mbrokerage m(not mthe minsurer) mbeing mresponsible mfor mthe mclaim m- mcorrect
manswers m-Explain mwhat mmight mhappen mwhen ma mbroker mexceeds mtheir
mbinding mauthority mon ma mrisk.
i. mMay mbind ma mrisk mfor mhigher mamounts mthen mset mout min mthe magency
mcontract
ii. mMay mbind ma mrisk mwhich mis mon mthe mdecline mlist m
iii. mMay mbind ma mliability mrisk mfor mhigher mlimits mthen mset mout min mthe
magency mcontract m- mcorrect manswers m-Identify mat mleast mthree mways min
mwhich mbrokers mmight mexceed mthe mbinding mauthority mgiven mto mthem mby man
minsurer.
SOLUTIONS
Transfer mof mrisk m- mbuy minsurance m
Avoidance mof mrisk m- mavoid mthe mchance mof mfinancial mloss
Controlling mof mrish m- mtaking mmeasures mto mreduce mthe mfrequency mand
msecuritu mof mloss
Retention mof mrisk m- mwhen ma mcompany mdecides mto mfinance mtheir mown
mlosses m- mcorrect manswers m-People mcan mchoose mto mdeal mwith mrisk min ma
mvariety mof mways. mIdentify mfour mpossible moptions mand mprovide ma mbrief
mexplanation mof meach.
Transfer mof mrisk mis mthe mmost mpractical m- mcorrect manswers m-Which mof
mthese moptions mis mmost mpractical mfor mmost mpeople?
1. mAgreement
2. mConsideration m
3. mLegality mof mobject m
, 4. mLegal mcapacity mof mthe mparties mto mcontract
5. mGenuine mintention m- mcorrect manswers m-Identify mthe mfive melements
mrequired mto mbe mpresent min mall mtypes mof mcontracts.
Individuals m- myes
Trade mnames m- mno
Corporations m-yes m- mcorrect manswers m-Indicate mwether mthe mfollowing mare
mpermitted mto menter minto ma mcontract:
Insurable minterest
Utmost mgood mfaith
Indemnity m- mcorrect manswers m-Insurance mcontracts mare mdifferent mfrom mall
mother mtypes mof mcontracts. mIdentify mthe mthree madditional melements mof
minsurance mcontracts mwhich mare mnot mrequired mof mother mtypes mof mcontracts.
Insured's m- mexpert madvice
mCompetitive mpricing mof mproducts
mCareful mand mprompt mattention mto
minstructions
Insurers m- mcollect mpremium m
mPassing mon mof mrelevant minformation m
mobtained mfrom mthe mclient m- mcorrect manswers m-State mtwo mduties mowed mby
mbrokers mto:
The mvalue mof mthe minsured's mproperty mas mit mexisted mimmediately mprior mto
mthe mloss m- mcorrect manswers m-What mpoint min mtime mis mused mby minsured mto
mmeasure mthe mamount mof mthe mindemnity mto mbe mpaid mby mthe mpolicy?
Insured's magency magreement m- mcorrect manswers m-Where mdoes mthe mbroker
mobtain mthe mauthority mto mbind man minsurer mon ma mrisk
Get mit min mwriting mas msoon mas mpossible m- mcorrect manswers m-What madvise
mwould myou mgive mto ma mbroker mwho mhas mprovided man moral mbinder mon ma
mrisk?
May mface man merrors mand momissions mclaim mwhich mwould mresult min mthe
mbrokerage m(not mthe minsurer) mbeing mresponsible mfor mthe mclaim m- mcorrect
manswers m-Explain mwhat mmight mhappen mwhen ma mbroker mexceeds mtheir
mbinding mauthority mon ma mrisk.
i. mMay mbind ma mrisk mfor mhigher mamounts mthen mset mout min mthe magency
mcontract
ii. mMay mbind ma mrisk mwhich mis mon mthe mdecline mlist m
iii. mMay mbind ma mliability mrisk mfor mhigher mlimits mthen mset mout min mthe
magency mcontract m- mcorrect manswers m-Identify mat mleast mthree mways min
mwhich mbrokers mmight mexceed mthe mbinding mauthority mgiven mto mthem mby man
minsurer.
