INS 3533 : Chapter 4 - Basic Principles of Insurance

An insured will undergo a personal financial loss as a result of loss. Hence, under the principle of ________________, there must a financial relatonship or ownership with the subject matters of insurance.

• Insurable interest

• Subrogation

• Utmost Good Faith

• Indemnity

The four essential components of Insurable Interest may includes:

I - There must be some property, right, interest, life, limb or potential liability capable of being insured.

II - Any of these above i.e. property, right, interest etc. Must be the subject matter of Insurance.

III - The insured must stand in a formal or legal relationship with the subject matter of the Insurance. Whereby he benefits from its safety, well-being or freedom from liability and would be adversely affected by its loss, damage existence of liability.

IV - The relationship between the insured and the subject matter must be recognized by law.

• I & II

• II & IV

• I, II & III

• All of the above

According to the principles of ________________, a higher standard of honesty is obligatory to the participant. A duty of disclosure that remain in force though out the entire policy duration.

• Insurable Interest

• Utmost Good Faith

• Indemnity

• Proximate Cause

If a personal fails to provide the ________________, which considered as an important information to the underwriter. The participant can be considered breach the principle of Utmost Good Faith.

• Non- disclosure

• Innocent

• Material fact

• Misrepresentation

________________ can be defined as security against financial loss. It's an exact financial compensation or the takaful operator will restore the financial position of a participant as before loss.

• Indemnity

• Insurable Interest

• Contribution

• Proximate Cause

The method of Indemnity are as follows except:

• Cash

• Repair

• Replacement

• Reinstallment

Transfer of legal rights on behalf of the insured; in order to recover a loss from any liable third parties are known as the principle of________________.

• Indemnity

• Subrogation

• Insurable Interest

• Contribution

A negligence made a third party and subsequently exercise a subrogation from the takaful operator in order to recover the loss from the liable third parties are refers to:

• Subrogation arising out of contract

• Subrogation arising out of a statute

• Subrogation arising out of salvage

• Subrogation arising from tort

When there are:

· Two or more policies of indemnity exists

· The policies must cover a common interest, common peril, common subject matter and Each policy must be liable for the loss. The following are statement refers to principle of _______________________.

·

• Subrogation

• Indemnity

• Contribution

• Proximate Cause

Under the principle _______________, the takaful operator are only liable to the loss caused by and insured perils and not loss caused by uninsured or excepted perils.

• Insurable Interest

• Indemnity

• Contribution

• Proximate Cause