MRL3701 EXAM PACK 2026 FULL STUDY GUIDE WITH
CORRECT ANSWERS || 100% GUARANTEED PASS
<RECENT VERSION>
MRL3701 EXAM PACK 2024: INSURANCE LAW
100 Questions and Answers for Guaranteed Success
PART 1: GENERAL PRINCIPLES OF INSURANCE LAW
1. What is the defining characteristic of an insurance contract?
A) It is a sale of goods.
B) It is a contract of utmost good faith (uberrimae fidei).
C) It is always a long-term agreement.
D) It requires no form of payment.
ANSWER: B) It is a contract of utmost good faith (uberrimae fidei).
2. The principle that allows an insurer to step into the shoes of the insured
after indemnification to claim from a third party is known as:
A) Subrogation
B) Contribution
C) Proximate Cause
D) Insurable Interest
ANSWER: A) Subrogation
3. Which principle prevents an insured from making a profit from their
insurance claim?
A) The Principle of Indemnity
B) The Principle of Utmost Good Faith
C) The Principle of Proximate Cause
D) The Principle of Insurable Interest
ANSWER: A) The Principle of Indemnity
4. A "warranty" in an insurance contract is:
A) A mere descriptive term.
,B) A promissory condition that must be strictly complied with.
C) An opinion held by the insured.
D) A marketing slogan.
ANSWER: B) A promissory condition that must be strictly complied with.
5. The document that contains the insured's written request for insurance is
called the:
A) Policy Schedule
B) Proposal Form
C) Cover Note
D) Claim Form
ANSWER: B) Proposal Form
6. The legal right to insure, arising from a financial relationship with the
subject matter, is called:
A) Proximate Cause
B) Insurable Interest
C) Subrogation
D) Indemnity
ANSWER: B) Insurable Interest
7. When two or more policies cover the same risk and interest, the principle
that prevents double recovery is:
A) Subrogation
B) Contribution
C) Causa Proxima
D) Average
ANSWER: B) Contribution
8. The dominant or most effective cause of a loss, even if it is not the last cause,
is known as:
A) The Sine Qua Non
B) The Proximate Cause (Causa Proxima)
C) The Remote Cause
D) The Immediate Cause
ANSWER: B) The Proximate Cause (Causa Proxima)
, 9. A "material fact" is one that would:
A) Be interesting to the insurer.
B) Influence the judgment of a prudent insurer in fixing the premium or
determining whether to take the risk.
C) Be known to the insured personally.
D) Always lead to a claim.
ANSWER: B) Influence the judgment of a prudent insurer in fixing the
premium or determining whether to take the risk.
10. The party who agrees to pay the premium in return for insurance cover is
the:
A) Beneficiary
B) Insurer
C) Policyholder
D) Third Party
ANSWER: C) Policyholder
PART 2: THE INSURANCE CONTRACT & FORMATION
11. What is the primary legal effect of a "cover note"?
A) It is a permanent insurance contract.
B) It provides temporary insurance cover until the policy is issued or declined.
C) It is a receipt for premium payment.
D) It is a rejection of the proposal.
ANSWER: B) It provides temporary insurance cover until the policy is issued
or declined.
12. The consideration provided by the insurer in an insurance contract is
called:
A) The Promise of Indemnity
B) The Proposal Form
C) The Policy Document
D) The Premium
ANSWER: A) The Promise of Indemnity
CORRECT ANSWERS || 100% GUARANTEED PASS
<RECENT VERSION>
MRL3701 EXAM PACK 2024: INSURANCE LAW
100 Questions and Answers for Guaranteed Success
PART 1: GENERAL PRINCIPLES OF INSURANCE LAW
1. What is the defining characteristic of an insurance contract?
A) It is a sale of goods.
B) It is a contract of utmost good faith (uberrimae fidei).
C) It is always a long-term agreement.
D) It requires no form of payment.
ANSWER: B) It is a contract of utmost good faith (uberrimae fidei).
2. The principle that allows an insurer to step into the shoes of the insured
after indemnification to claim from a third party is known as:
A) Subrogation
B) Contribution
C) Proximate Cause
D) Insurable Interest
ANSWER: A) Subrogation
3. Which principle prevents an insured from making a profit from their
insurance claim?
A) The Principle of Indemnity
B) The Principle of Utmost Good Faith
C) The Principle of Proximate Cause
D) The Principle of Insurable Interest
ANSWER: A) The Principle of Indemnity
4. A "warranty" in an insurance contract is:
A) A mere descriptive term.
,B) A promissory condition that must be strictly complied with.
C) An opinion held by the insured.
D) A marketing slogan.
ANSWER: B) A promissory condition that must be strictly complied with.
5. The document that contains the insured's written request for insurance is
called the:
A) Policy Schedule
B) Proposal Form
C) Cover Note
D) Claim Form
ANSWER: B) Proposal Form
6. The legal right to insure, arising from a financial relationship with the
subject matter, is called:
A) Proximate Cause
B) Insurable Interest
C) Subrogation
D) Indemnity
ANSWER: B) Insurable Interest
7. When two or more policies cover the same risk and interest, the principle
that prevents double recovery is:
A) Subrogation
B) Contribution
C) Causa Proxima
D) Average
ANSWER: B) Contribution
8. The dominant or most effective cause of a loss, even if it is not the last cause,
is known as:
A) The Sine Qua Non
B) The Proximate Cause (Causa Proxima)
C) The Remote Cause
D) The Immediate Cause
ANSWER: B) The Proximate Cause (Causa Proxima)
, 9. A "material fact" is one that would:
A) Be interesting to the insurer.
B) Influence the judgment of a prudent insurer in fixing the premium or
determining whether to take the risk.
C) Be known to the insured personally.
D) Always lead to a claim.
ANSWER: B) Influence the judgment of a prudent insurer in fixing the
premium or determining whether to take the risk.
10. The party who agrees to pay the premium in return for insurance cover is
the:
A) Beneficiary
B) Insurer
C) Policyholder
D) Third Party
ANSWER: C) Policyholder
PART 2: THE INSURANCE CONTRACT & FORMATION
11. What is the primary legal effect of a "cover note"?
A) It is a permanent insurance contract.
B) It provides temporary insurance cover until the policy is issued or declined.
C) It is a receipt for premium payment.
D) It is a rejection of the proposal.
ANSWER: B) It provides temporary insurance cover until the policy is issued
or declined.
12. The consideration provided by the insurer in an insurance contract is
called:
A) The Promise of Indemnity
B) The Proposal Form
C) The Policy Document
D) The Premium
ANSWER: A) The Promise of Indemnity
