LML4805 - INSURANCE LAW 2025 EXAM TEST | EXAM QUESTIONS AND
ANSWERS |UPDATED VERSION 2025/2026| ALREADY GRADED A+
1.What is an insurance warrantey - ANSWER A promise made by insured relating to facts or something
agreed to do
2.Consequence of non warranty compliance - ANSWER Cover is suspended from moment breech
occured until remedied
But IA 2015 allowed warranties to be remedied whereas before they could not
3.State 2 types of warranties - ANSWER Expressed- stated in policy itself
Implied- only in marine only
4.What are 2 types of insurance condition precedent - ANSWER To the contract- words state policy not
come into effect if insured fails to comply
To liability- concern with claim process like notification of claim time period, or not admit liability. Allows
insurer discharge liability
5.Difference between condition & condition precedent - ANSWER Not reference condition precedent
No strong words
No term providing insurer liability depends...
If so more a mere condition
6.Impact of breech of warranty - ANSWER MIA 1906 it ended insurance contract
IA 2015 allowed insured to remedy the breach, cover suspended until fixed
7.Impact of breach of condition precedent - ANSWER If not fulfilled, contract never came into existence
8.Impact of breach of condition precedent to liability - ANSWER Insurer discharged from liability which
claim tainted by breach Policy remains inforce
,9.Impact of breach of collateral (mere) conditions - ANSWER Remedy depends on seriousness of breach,
most cases not able to reject claim
10.Impact of breach of suspensive condition - ANSWER Cover suspended long as insured fails to comply
with condition Resumes once compliant
11.What type of warranty breach allow insured to still claim - ANSWER Warranty that is risk mitigating
rather than impact risk of whole
whole allows insurers reject claim, but warranty breach that not increase the risk of loss in way risk has
occurred can be claimed
12.Difference of breach in joint and composite policies - ANSWER Joint- interest of insured the same eg
husband and wife insure joint property, breach by one is breach by both and policy fails
Composite- interests of insured persons are different eg mortgagor and mortgagee, policy only
invalidates for individual caused breach or invalidate contract not other
13.What is the law of agency - ANSWER A person (agent), who is authorised to act on behalf of another
(principal) to create legal relations with a third party
14.Examples of agency - ANSWER Private person hiring a contractor to complete repair work on a home
A corporation retaining an attorney to perform legal work
15.State the 3 ways the relationship between principle and agent arises - ANSWER Agreement (or
consent)- implied and expressed
Ratification- agreement made retroactively
Necessity- someone trusted with good or action due to an emergency, so aim to preserve it
16.Give an example of agency by ratification - ANSWER A states they are agent of B. A sells car to C
without B's knowledge. B may accept the agreement later a binding. So if C fails to buy car they breech
contract and B has right to sue C
,17.State the 7 conditions required for agency by ratification - ANSWER Agent must clear they acting for
principle not on own behalf
Principle must be person agent had in mind during act
Principle must have full knowledge at ratification
Principle must had contractual capacity to make the contract
Ratification occur reasonable time
Void or illegal acts cannot be ratified
Whole contact must be ratified
18.2 ways an agent appointed by agreement by principle - ANSWER Express- formal and informal
agreement which outlined certain authority like: their powers, duties, commission, period of agreement
Implied- person acts on behalf of in exchange for payment but not formally stated
19.Roles of agent in insurance - ANSWER Give general advise
Grant cover (acting for insurers)
Collect premiums
Completion proposal form
20.What 5 actions are an agent considered to act for insurers - ANSWER Expressed authority from
insurers to receive and handle proposal form
Instructed by insurers to ask questions and fill in answers on proposal form
When they survey and describe property on insurers behalf
Act without expressed authority but get ratification from insurers or previous ratified such action
Authority to collect premiums
21.What actions are agent considers to work for proposer - ANSWER Giving advise
No authority from insurers, only recognition is the commission given
Add answers to proposal form
Complete form on proposers behalf and the form incorporates a wording
They are in collusion to defraud insurers
, Advise to formulate a claim
22.What are the duties of an agent - ANSWER Obey principles instructions
Exercise proper care and skill
Perform duties personally - delegation allowed in certain circumstances
Act in good faith toward principle- no potential conflict of interest
Account for monies received on behalf of principal- separate premiums and commissions
23.State the circumstances where a agent can delegate duties - ANSWER Principle expressly authorises it
Can be implied from the circumstance, eg admin tasks
When delegation is trade custom
When its a necessity
24.State the 3 classifications of contracts - ANSWER Contracts under seal & simple
Unilateral & bilateral contracts
Void & viodable contracts
25.What are seal & simple contracts - ANSWER Seal- formal, signed contracts
Simple- all other contracts, not signed
26.What are unilateral and bilateral contracts - ANSWER Unilateral - one sided, legally binding agreement
where one party pays for a specific act. It's a promise eg reward for finding a lost pet
Bilateral- commitment is required from 2 or more parties, its enforceable from time when contract
signed
28.What are void and voidable contracts - ANSWER Void- contract that is unenforceable. Eg if it's an
illegal act being agreed
Voidable- agreement made and valid, but become set aside due to certain reasons
28.What are five essential for formation of a contract? - ANSWER Agreement
ANSWERS |UPDATED VERSION 2025/2026| ALREADY GRADED A+
1.What is an insurance warrantey - ANSWER A promise made by insured relating to facts or something
agreed to do
2.Consequence of non warranty compliance - ANSWER Cover is suspended from moment breech
occured until remedied
But IA 2015 allowed warranties to be remedied whereas before they could not
3.State 2 types of warranties - ANSWER Expressed- stated in policy itself
Implied- only in marine only
4.What are 2 types of insurance condition precedent - ANSWER To the contract- words state policy not
come into effect if insured fails to comply
To liability- concern with claim process like notification of claim time period, or not admit liability. Allows
insurer discharge liability
5.Difference between condition & condition precedent - ANSWER Not reference condition precedent
No strong words
No term providing insurer liability depends...
If so more a mere condition
6.Impact of breech of warranty - ANSWER MIA 1906 it ended insurance contract
IA 2015 allowed insured to remedy the breach, cover suspended until fixed
7.Impact of breach of condition precedent - ANSWER If not fulfilled, contract never came into existence
8.Impact of breach of condition precedent to liability - ANSWER Insurer discharged from liability which
claim tainted by breach Policy remains inforce
,9.Impact of breach of collateral (mere) conditions - ANSWER Remedy depends on seriousness of breach,
most cases not able to reject claim
10.Impact of breach of suspensive condition - ANSWER Cover suspended long as insured fails to comply
with condition Resumes once compliant
11.What type of warranty breach allow insured to still claim - ANSWER Warranty that is risk mitigating
rather than impact risk of whole
whole allows insurers reject claim, but warranty breach that not increase the risk of loss in way risk has
occurred can be claimed
12.Difference of breach in joint and composite policies - ANSWER Joint- interest of insured the same eg
husband and wife insure joint property, breach by one is breach by both and policy fails
Composite- interests of insured persons are different eg mortgagor and mortgagee, policy only
invalidates for individual caused breach or invalidate contract not other
13.What is the law of agency - ANSWER A person (agent), who is authorised to act on behalf of another
(principal) to create legal relations with a third party
14.Examples of agency - ANSWER Private person hiring a contractor to complete repair work on a home
A corporation retaining an attorney to perform legal work
15.State the 3 ways the relationship between principle and agent arises - ANSWER Agreement (or
consent)- implied and expressed
Ratification- agreement made retroactively
Necessity- someone trusted with good or action due to an emergency, so aim to preserve it
16.Give an example of agency by ratification - ANSWER A states they are agent of B. A sells car to C
without B's knowledge. B may accept the agreement later a binding. So if C fails to buy car they breech
contract and B has right to sue C
,17.State the 7 conditions required for agency by ratification - ANSWER Agent must clear they acting for
principle not on own behalf
Principle must be person agent had in mind during act
Principle must have full knowledge at ratification
Principle must had contractual capacity to make the contract
Ratification occur reasonable time
Void or illegal acts cannot be ratified
Whole contact must be ratified
18.2 ways an agent appointed by agreement by principle - ANSWER Express- formal and informal
agreement which outlined certain authority like: their powers, duties, commission, period of agreement
Implied- person acts on behalf of in exchange for payment but not formally stated
19.Roles of agent in insurance - ANSWER Give general advise
Grant cover (acting for insurers)
Collect premiums
Completion proposal form
20.What 5 actions are an agent considered to act for insurers - ANSWER Expressed authority from
insurers to receive and handle proposal form
Instructed by insurers to ask questions and fill in answers on proposal form
When they survey and describe property on insurers behalf
Act without expressed authority but get ratification from insurers or previous ratified such action
Authority to collect premiums
21.What actions are agent considers to work for proposer - ANSWER Giving advise
No authority from insurers, only recognition is the commission given
Add answers to proposal form
Complete form on proposers behalf and the form incorporates a wording
They are in collusion to defraud insurers
, Advise to formulate a claim
22.What are the duties of an agent - ANSWER Obey principles instructions
Exercise proper care and skill
Perform duties personally - delegation allowed in certain circumstances
Act in good faith toward principle- no potential conflict of interest
Account for monies received on behalf of principal- separate premiums and commissions
23.State the circumstances where a agent can delegate duties - ANSWER Principle expressly authorises it
Can be implied from the circumstance, eg admin tasks
When delegation is trade custom
When its a necessity
24.State the 3 classifications of contracts - ANSWER Contracts under seal & simple
Unilateral & bilateral contracts
Void & viodable contracts
25.What are seal & simple contracts - ANSWER Seal- formal, signed contracts
Simple- all other contracts, not signed
26.What are unilateral and bilateral contracts - ANSWER Unilateral - one sided, legally binding agreement
where one party pays for a specific act. It's a promise eg reward for finding a lost pet
Bilateral- commitment is required from 2 or more parties, its enforceable from time when contract
signed
28.What are void and voidable contracts - ANSWER Void- contract that is unenforceable. Eg if it's an
illegal act being agreed
Voidable- agreement made and valid, but become set aside due to certain reasons
28.What are five essential for formation of a contract? - ANSWER Agreement
