English IIQE Paper 2 Topic 1

General insurance covers insurance of the person, insurance of property, insurance of pecuniary interests, and insurance of liability. The answer is D.

“Insurance of the person” is one whose subject matter is a human being’s life, limbs or health, or medical expenses. The answer is B.

Property insurances cover either all risks or specified perils. The answer is C.

Specified perils (or “named perils”) refer to that to be recoverable a loss or damage must have been proximately caused by a peril (i.e. cause of loss) specifically mentioned (specified) in the policy, e.g. lightning under a fire policy. The answer is D.

Property insurances cover either all risks or specified perils. The answer is C.

“All Risks” means that loss or damage arising from any conceivable risk is covered by the policy unless an exclusion
applies. The claimant merely has to show that an accidental loss has occurred, without the need to pinpoint its exact cause. The internal damage of a watch caused by high humidity is not an accidental loss. The answer is C.

War risks and nuclear risks are standard exclusions and are generally not insurable. The answer is A.

The fundamental risks considered exclusions in most general policies include war and nuclear risks. The answer is C.

There are three major classes of motor insurance: private vehicle (private car), motor cycle and commercial vehicle. The answer is A.

Three major classes of motor insurance are private vehicle (private car), motor cycle and commercial vehicle. The answer is C.

The “third party only cover” covers any insured driver (or any passenger) for his liability at law to third parties for their death, injury or property damage. The answer is D.

General insurance covers insurance of the person, insurance of property, insurance of pecuniary interests, and insurance of liability. The answer is A.

Third party, fire and theft cover comprises property insurance of the insured vehicle covering its loss or damage resulting from the risk of rire or theft.

Comprehensive cover, being the widest form of motor cover available, includes third party only cover and third party, fire and theft cover, with “all risks” insurance
on the insured vehicle.

The answer is D.

The “act only cover” is now rarely found in the market. The answer is C.

Comprehensive cover, being the widest form of motor cover available, includes third party only cover and third party, fire and theft cover, with “all risks” insurance
on the insured vehicle. The answer is A.

The narrowest coverage of motor insurance is “act” insurance. The answer is A.

All three major types of motor insurance cover any insured driver (or any passenger) for his liability at law to third parties for their death, injury or property damage. The answer is D.

A motor insurance policy described as
“third party”, covers liability for property damage to third parties, in
addition to liability for death or injury. The answer is A.

All three major types of motor insurance cover any insured driver (or any passenger) for his liability at law to third parties for their death, injury or property damage. The answer is D.

The “third party” policy under compulsory motor vehicle legislation and the third party policy of a Hong Kong motor insurer are totally different, because the latter covers liability for property damage. The answer is D.

The minimum amount of cover required in respect of third party death and injury liability is HK$100 million any one event. The answer is B.

All statements are true. The answer is D.

The Ordinance, when referring to “third party” risks, means potential liability for death or injury only. Liability for property damage to third parties is not required by law. The answer is B.

“Act” insurance only covers the liability required by law. The answer is A.

“Act” insurance in Hong Kong motor insurance industry is of no importance in the insurer’s motor insurance business, because the coverage is so narrow, cannot expect somebody will buy it. The answer is D.

A significant and almost unique feature of motor insurance is the practice of granting a progressive discount, called the ” no claim discount” (NCD) or “claim free discount”, on the renewal annual premium if the preceding policy year has been claim-free. The answer is B.

With private cars, the NCD system operates on what is called a “step-back system”. This means that a single claim will not necessarily destroy an entitlement to next year’s discount. The answer is B.

With private cars, the NCD system operates on what is called a “step-back system”. This means that a single claim will not necessarily destroy an entitlement to next year’s discount.

With other types of vehicles, a single claim will mean that there will not be any NCD in the forthcoming year and a fresh claim-free year will be needed to earn the minimum discount again.

The answer is C.

A significant and almost unique feature of motor insurance is the practice of granting a progressive discount, called the “no claim discount” (NCD) or “claim free discount”, on the renewal annual premium if the preceding policy year has been claim-free.

A typical scale of NCD for private cars is such that one claim-free year earns a 20% NCD, the second year 30% and so on, rising to a maximum of 60% after five consecutive claim-free years. With other classes of vehicles, the scale of discount is very likely to start from 10%, rising to a maximum of 30% after three consecutive claim-free years.

The answer is C.

With private cars, the NCD system operates on what is called a “step-back system”. This means that a single claim will not necessarily destroy an entitlement to next year’s discount. For instance, with a four years’ entitlement (i.e. 50% NCD) for a policy year, a single claim during the
year will reduce the discount on renewal to 20%. The answer is C.

With private cars, the NCD system operates on what is called a “step-back system”. This means that a single claim will not necessarily destroy an entitlement to next year’s discount. For instance, with a four years’ entitlement (i.e. 50% NCD) for a policy year, a single claim during the
year will reduce the discount on renewal to 20%. The answer is C.

A typical scale of NCD for private cars is such that one claim-free year earns a 20% NCD, the second year 30% and so on, rising to a maximum of 60% after five consecutive claim-free years. With other classes of vehicles, the scale of discount is very likely to start from 10%, rising to a maximum of 30% after three consecutive claim-free years. The answer is B.

A progressive discount on the renewal annual premium is offered if the preceding policy year has been claim-free. The answer is C.

With private cars, the NCD system operates on what is called a “step-back system”. This means that a single claim will not necessarily destroy an entitlement to next year’s discount. The answer is A.

Common exclusions/exceptions include the insured vehicle being used otherwise than in accordance with the specified limitations as to the use of the vehicle, war and nuclear risks, and contractual liability. The answer is C.

The insurer may provide property insurance on the insured’s car.

Common exclusions/exceptions include accidents occurring outside the specified geographical area of cover.

An excess (or “deductible”) means that up to the stated amount of each loss is not insured.

The answer is A.

All the options are the common rating features. The answer is D.

The common rating features do not include the sex of the insured. The answer is C.

All the options are the common rating features. The answer is D.

One of the features of standard excesses is that they do not qualify for any discount on the premium. The answer is D.

A voluntary excess is requested by the insured, in return for a premium discount. The answer is B.

An excess (or “deductible”) means that up to the stated amount of each loss is not insured. The answer is A.

“Additional” deductibles in motor insurance are those applicable for the purpose of the undertaking subject to special conditions of insurance. The answer is C.

There are situations where compulsory insurance requirements will not allow the insurer to deny policy liability for death or injury claims from third parties, even though there is a breach of policy terms on the part of the insured. The answer is A.

There are situations where compulsory insurance requirements will not allow the insurer to deny policy liability for death or injury claims from third parties, even though there is a breach of policy terms on the part of the insured. The answer is B.

There are situations where compulsory insurance requirements will not allow the insurer to deny policy liability for death or injury claims from third parties, even though there is a breach of policy terms on the part of the insured. The answer is A.

Most commonly this will arise where the insured fails to report an accident to the insurer, or admits liability to a third party without obtaining the insurer’s prior written consent. The answer is B.

Most commonly this will arise where the insured fails to report an accident to the insurer, or admits liability to a third party without obtaining the insurer’s prior written consent.

In such cases, if the insured is liable to a third party, the insurer shall indemnify the third party notwithstanding the breach of the terms of the policy.

The answer is B.

Major classes of motor insurance include private vehicle, motor cycle and commercial vehicle. The answer is C.

Private car insurance is designed to cover the use of a car not primarily for carrying goods, but for the private use of the insured, or for carrying passengers not for hire or reward. The answer is B.

This loss of or damage to the insured vehicle (own damage) section of the comprehensive private car policy has some specific exclusions, such as consequential loss (e.g. the cost of hiring another vehicle, whilst the insured vehicle is undergoing repairs after an accident). The answer is B.

The scope of the comprehensive private car policy includes the loss of or damage to the insured vehicle. This is property insurance on an “all risks” basis, covering the insured’s car, and its accessories and spare parts whilst thereon, with indemnity limited to the reasonable market value of the car at the time of loss or damage. The answer is A.

This loss of or damage to the insured vehicle (own damage) section of the comprehensive private car policy has some specific exclusions, such as: depreciation, wear and tear, and electrical or mechanical
breakdown. (NB depending on the wording used, it is normally loss or damage itself which is excluded, rather than loss or damage caused by “depreciation …”. Therefore, where the insured vehicle is destroyed as a result of a collision consequent upon wear and tear of its brakes, only the destruction of the brakes will be excluded. The answer is B.

This loss of or damage to the insured vehicle (own damage) section of the comprehensive private car policy has some specific exclusions, such as: depreciation, wear and tear, and electrical or mechanical
breakdown. (NB depending on the wording used, it is normally loss or damage itself which is excluded, rather than loss or damage caused by “depreciation …”. Therefore, where the insured vehicle is destroyed as a result of a collision consequent upon wear and tear of its brakes, only the destruction of the brakes will be excluded. The answer is D.

The compulsory insurance cover is usually for the minimum HK$100 million any one event required by law. The answer is A.

A number of extensions of cover may be possible on payment of an extra premium. These include the deletion of a policy exclusion or adding benefits, such as extended personal accident cover, waiver of excess for third party property damage, etc.
The answer is D.

Apart from NCD and discounts for voluntary excesses, discounts may be available for insuring more than one car under the same policy, or whilst the insured car is “laid-up” (i.e. temporarily out of use) for a minimum period. The answer is D.

There is neither a standard policy section for medical expenses nor an extended personal accident cover. The answer is D.

-Theft claims are only admissible if the whole machine is stolen. Loss of accessories alone is therefore not covered.

-There is usually a standard excess in respect of any loss of or damage to the insured machine (other than that arising from fire or theft).

-There is neither a standard policy section for medical expenses nor an extended personal accident cover.

The answer is D.

There is neither a standard policy section for medical expenses nor an extended personal accident cover. The answer is D.

There is neither a standard policy section for medical expenses nor an extended personal accident cover. The answer is C.

There is usually a standard excess in respect of any loss of or damage to the insured machine (other than that arising from fire or theft). The answer is B.

Specialized vehicles refer to the vehicles with unusual risk exposures, such as ambulances and vehicles used by undertakers, warrant special terms. The answer is C.

In Hong Kong, specialized vehicle insurance policies are more likely to cover the use of the vehicle as a tool of trade. The answer is C.

For the use of the vehicle as a tool of trade (e.g. a mechanical digger whilst being used as such), this exclusion is known as the “tool of trade clause”. The answer is A.

Food poisoning and related claims (in case the vehicle is used as a mobile food-vending outlet) are excluded. The answer is D.

Motor trade risks refer to the garages and similar risks. Those whose business largely concerns motor vehicles, have special insurance needs. Policies for such risks may relate to the road use of vehicles or premises risks, with various combinations of cover available. The answer is A.

Motor trade risks refer to the garages and similar risks. Those whose business largely concerns motor vehicles, have special insurance needs. Policies for such risks may relate to the road use of vehicles or premises risks, with various combinations of cover available. The answer is C.

Health insurance (also known as “accident and health insurance”) is a type of “insurance of the person”, in the sense that the subject matter of the insurance is the life, limbs or health of a human being. The answer is B.

PA cover may be described under three main headings including lump sum benefits, weekly benefits, and medical expenses. The answer is A.

Weekly benefits are periodic payments related to temporary total (i.e. 100%) disablement or temporary partial (i.e. less than 100%) disablement. The benefit is calculated weekly, but payments are usually made monthly during disablement, subject to a maximum period (say, 104 weeks) of payment. The answer is D.

PA insurance was the first major class of accident insurance, originally developed to deal with a demand arising from the many accidents involving the early railways. The answer is B.

Weekly benefits are periodic payments related to temporary total (i.e. 100%) disablement or temporary partial (i.e. less than 100%) disablement. The benefit is calculated weekly, but payments are usually made monthly during disablement, subject to a maximum period (say, 104 weeks) of payment. The answer is B.

The definition of accidental bodily injury frequently includes such words as “physical injury from accidental, external, violent and visible means”. Customary wording includes a phrase such as “solely and independently of any other cause result in ……”. The answer is D.

Exclusions include suicide, deliberately self-inflicted injury and hazardous activities. The answer is D.

Exclusions include suicide, deliberately self-inflicted injury and hazardous activities. The answer is B.

Anti-social activities, such as suicide, deliberately self-inflicted injury, abuse of alcohol or drugs (other than taking of drugs prescribed by a qualified medical
practitioner) are exclusions. The answer is C.

Quite a number of individual features (e.g. age) may have underwriting consequences, but the standard premium calculation is based upon the insured’s occupation. The answer is D.

PA policies normally last for one year, renewal being a matter of mutual agreement. A cancellation clause is usually included to allow unilateral cancellation of the policy mid-term with premium refund, subject to prescribed notification to the other party. The answer is B.

Compensation is usually expressed as a percentage of a sum specified in the policy. Death merits a 100% benefit, so does any one of such specified major
injuries as loss of two limbs and total loss of sight. In addition, the specified injuries and related benefit distribution are often specified in the policy. The answer is B.

Lump sum benefits are single amounts payable in the event of death or other specified injury arising from an accident. The answer is B.

PA cover may be described under three main headings, with the insured person sustaining a prescribed bodily injury as a
common criterion for policy liability: lump sum benefits, weekly benefits and medical expenses. The answer is D.

PA cover may be described under three main headings, with the insured person sustaining a prescribed bodily injury as a
common criterion for policy liability: lump sum benefits, weekly benefits and medical expenses. The answer is C.

Weekly benefits are periodic payments related to temporary total (i.e. 100%) disablement or temporary partial (i.e. less than 100%) disablement. The answer is D.

To be reimbursable, the medical expenses
incurred must arise from “bodily injury” rather than sickness and are subject to a limit any one event. The answer is C.

Suicide, deliberately self-inflicted injury, and hazardous activities are exclusions. The answer is B.

Although premiums are not based on the age of the insured person, policies usually specify an insurable band of ages (e.g. 18 to 70 years for adult cover). The answer is A.

All of these are exclusions. The answer is D.

Whereas PA insurance is primarily intended to provide a benefit to the insured in the event of death or injury from accident, medical insurances are intended to cover medical expenses arising from accident or sickness. The answer is A.

Medical insurance is intended to cover medical expenses arising from accident or sickness. The answer is C.

Special exclusions of medical insurance include congenital conditions, pre-existing (i.e. prior to insurance) conditions and
disabilities, birth control/infertility treatment, cosmetic surgery, routine medical examinations and check-ups, dental treatment (unless arising from an accident during policy period). The answer is D.

Medical insurance is intended to cover medical expenses arising from accident or sickness.

Special exclusions of medical insurance include congenital conditions, pre-existing (i.e. prior to insurance) conditions and
disabilities, birth control/infertility treatment, cosmetic surgery, routine medical examinations and check-ups, dental treatment (unless arising from an accident during policy period).

The answer is D.

The VHIS is designed to make it easier for consumers to access individual hospital insurance. The answer is B.

The Voluntary Health Insurance Scheme (“VHIS”) is a policy initiative implemented by the Food and Health Bureau (“FHB”) of the Government. The answer is C.

The Voluntary Health Insurance Scheme (“VHIS”) is implemented by the Food and Health Bureau (“FHB”) of the Government to regulate individual indemnity hospital insurance products. The answer is B.

The Voluntary Health Insurance Scheme (“VHIS”) is a policy initiative implemented by the Food and Health Bureau (“FHB”) of the Government to regulate individual indemnity hospital insurance products, with voluntary participation by insurance companies and consumers. Under the VHIS, the participating insurance companies can offer indemnity hospital insurance plans (“IHIP”) that have been certified by the FHB (“Certified Plans”) for individual consumers to purchase voluntarily.

Insured persons under the VHIS must be Hong Kong residents (including holders of Hong Kong Identity Card) aged between 15 days and 80 years.

The answer is D.

The deduction ceiling is $8,000 per insured person per year, irrespective of the number of policies that cover the insured person. However, there is no cap on the number of specified relatives who are eligible for tax deductions. The answer is B.

Taxpayers are entitled to tax deductions under salaries tax and personal assessment for qualifying premiums they pay on or after 1 April 2019 for Certified Plans for themselves or any of their “specified relatives” – defined to cover the taxpayer’s
I. spouse
II. children
III. Taxpayer’s or his/her spouse’s grandparents, parents and siblings

Taxpayers are entitled to tax deductions under salaries tax and personal assessment for qualifying premiums they pay on or after 1 April 2019 for Certified Plans for themselves or any of their “specified relatives” – defined to cover the taxpayer’s spouse and children and the taxpayer’s or his/her spouse’s grandparents, parents and siblings. The answer is D.

In the case of a Standard Plan, VHIS Providers should explain to consumers during the selling process and upon enquiry that all benefits described in the Standard Plan are not subject to any restriction in the choice of ward class. With Flexi Plans subject to restrictions in the choice of ward class, they should instead explain the targeted ward class and the details of benefit adjustment upon voluntary choice of higher ward classes, and that the insurance company will guarantee that such benefit adjustment will not apply in the event of involuntary ward upgrade, or to the Basic Benefits of the Flexi Plans (i.e. the coverage equivalent to the Standard Plan) in the event of voluntary ward upgrade. The answer is D.

The FHB has set out the scheme rules in a set of scheme documents for compliance by VHIS Providers:
(i) Registration Rules for Insurance Companies under the Ambit of the Voluntary Health Insurance Scheme;
(ii) Voluntary Health Insurance Scheme Certified Plan Policy Template;
(iii) Product Compliance Rules under the Ambit of the Voluntary Health Insurance Scheme;
(iv) Code of Practice for Insurance Companies under the Ambit of the Voluntary Health Insurance Scheme.
The answer is A.

The IA issued a guideline on medical insurance business to be applicable to all medical insurance business, including the VHIS. The guideline will provide guidance on the expected standard and practices to ensure fair treatment of customers. The answer is B.

The VHIS is administered by the Voluntary Health Insurance Scheme Office (“VHIS Office”) of the FHB. The answer is B.

A Flexi Plan must provide Enhanced Benefits in addition to the Basic Benefits.

Both Standard Plan and Flexi Plan may encompass a minor element of benefits other than Basic Benefits and Enhanced Benefits, namely Other Benefits.

The answer is D.

A Standard Plan must offer terms and benefits equivalent to the minimum requirements of Certified Plans under the VHIS, namely Basic Benefits, as prescribed in the Policy Template.

Both Standard Plan and Flexi Plan may encompass a minor element of benefits other than Basic Benefits and Enhanced Benefits, namely Other Benefits.

A Flexi Plan must provide Enhanced Benefits in addition to the Basic Benefits.

The answer is C.

Insurance companies seeking to offer VHIS-compliant products must first register as VHIS Providers and, before their Standard Plans and Flexi Plans (if offered) are marketed, each plan must have been successfully certified as a Certified Plan by the FHB. The answer is A.

Other benefits are allowed to form part of a Certified Plan to cater for the licensing requirement for long-term insurers to provide long-term insurance benefits (e.g. life insurance) in the individual IHIP they offer. The answer is A.

The Voluntary Health Insurance Scheme Certified Plan Policy Template(Policy Template) illustrates the minimum requirements on the policy structure, terms and benefits of Certified Plans, including Standard Plans and Flexi Plans. The answer is B.

In the case of a Standard Plan, VHIS Providers should explain to consumers during the selling process and upon enquiry that all benefits described in the Standard Plan are not subject to any restriction in the choice of healthcare services providers. With Flexi Plans subject to restrictions in the choice of healthcare services providers, they should instead explain the list of selected healthcare services providers, and that the restrictions are inapplicable to the Basic Benefits of the Flexi Plans, i.e. the coverage equivalent to the Standard Plan. The answer is D.

VHIS products can be divided into standard plans and flexi plans. The answer is C.

The design of Flexi Plans must adhere to the “better-off principle” entailing terms and benefits which will bring more protection to customers when compared with a Standard Plan. The answer is D.

A standard plan must offer terms and benefits equivalent to the minimum requirements of Certified Plans under the VHIS, namely Basic Benefits, as prescribed in the Policy Template. The answer is C.

All Certified Plans must be individual IHIP. The following are some examples that are not deemed to be individual IHIP: group insurance plans with master policy for employees; outpatient insurance plans; non-indemnity insurance plans including hospital cash plans and critical illness cash plans; and indemnity insurance plans that cover specific illnesses (e.g. cancer) only. The answer is B.

The Product Compliance Rules under the Ambit of the Voluntary Health Insurance Scheme set out the minimum product design requirements for an insurance plan to be certified as VHIS-compliant and the relevant product certification procedure. The answer is C.

VHIS Providers should explain to consumers during the selling process and upon enquiry the coinsurance arrangement of prescribed diagnostic imaging tests under the Standard Plan, and the coinsurance and deductible arrangements approved by the FHB for eligible Flexi Plans, if any. The answer is D.

The Voluntary Health Insurance Scheme Certified Plan Policy Template(Policy Template) illustrates the minimum requirements on the policy structure, terms and benefits of Certified Plans, including Standard Plans and Flexi Plans. The answer is D.

With Flexi Plans subject to restrictions in territorial scope of cover, VHIS Providers should explain the definition of regions with restrictions and the benefit adjustment rules, and that the reduction is inapplicable to the Basic Benefits of the Flexi Plans, i.e. the coverage equivalent to the Standard Plan. The answer is C.

An individual IHIP must be certified by the FHB before it can be marketed as a certified plan. The answer is C.

The Code of Practice for Insurance Companies under the Ambit of the Voluntary Health Insurance Scheme sets out the required conduct and practices covering product offering, migration arrangement, sales and marketing, handling of application, cooling-off period, after-sales services, etc. for VHIS Providers to comply with so as to supplement the Policy Template. The answer is D.

VHIS Providers should ensure that all sales and marketing materials are accurate and in a nonmisleading manner, in Chinese and English (except for social media and advertisements), in plain language and complete. The answer is B.

In the case of a Standard Plan, VHIS Providers should explain to consumers during the selling process and upon enquiry that all benefits described in the Standard Plan are applicable worldwide except for psychiatric treatments. The answer is D.

In the case of a Standard Plan, VHIS Providers should explain to consumers during the selling process and upon enquiry that all benefits described in the Standard Plan are applicable worldwide except for psychiatric treatments. The answer is B.

Where an insurance policy covers not only a Certified Plan but also another insurance plan (e.g. where a Certified Plan forms a rider to a life insurance policy), the policy will contain terms and benefits that the Policy Template does not stipulate, and these terms and benefits will not be subject to the requirements of the VHIS. The answer is B.

Investigation and treatment of congenital conditions which have manifested or been diagnosed after the age of 8 are covered by the VHIS. The answer is C.

Insured persons under the VHIS must be Hong Kong residents (including holders of Hong Kong Identity Card) aged between 15 days and 80 years. The answer is A.

In order to enhance market transparency and promote price competition, it is a requirement that VHIS Providers publish agebanded premium schedules for their Certified Plans. The answer is B.

During each policy year and upon renewal, no additional rate or amount of premium loading or casebased exclusion(s) on the insured person may be imposed by reason of any change in the insured person’s health condition. The answer is B.

In line with the free market principle, VHIS Providers are free to set their own premium levels. By common market practice, Certified Plans may charge standard premiums that differ by age and gender. The answer is C.

Coverage of VHIS is extended to include unknown pre-existing conditions. Pre-existing conditions not known at the time of joining are partially covered during a waiting period of 3 years upon policy inception (i.e. no coverage in the 1st policy year, 25% reimbursement in the 2nd policy year and 50% in the 3rd policy year) and fully covered from the 4th policy year onwards. The answer is D.

The VHIS policyholder has the right (“cooling-off right”) to cancel a newly effected policy during the 21-day period (or a longer period offered by the VHIS providers) after the delivery of the policy to the policyholder or to the policyholder’s representative or the issuance of notice of policy availability to the policyholder or to the policyholder’s representative, whichever is the earlier, with full refund of the premiums paid provided no benefit payment has been made or is to be made or impending. The answer is C.

The insured is guaranteed a right of renewal up to the age of 100. Moreover, there is no “lifetime benefit limit” – the maximum amount of benefits that a medical insurance policy says it will pay cumulatively during the lifetime of the insured person. The answer is D.

Setting of VHIS premiums is unfettered and in line with the free market principle. The answer is D.

During each policy year and upon renewal, no additional rate or amount of premium loading or casebased exclusion(s) on the insured person may be imposed by reason of any change in the insured person’s health condition. The answer is B.

Coverage of VHIS is extended to include day case procedures. Surgical procedures (including endoscopy) not conducted in hospital are covered, subject to such provisos as “medical necessity”. The answer is D.

Prescribed advanced diagnostic imaging tests not conducted in hospital are covered by the VHIS, subject to 30% coinsurance. The answer is C.

Coverage of the VHIS is extended to include prescribed non-surgical cancer treatments. Chemotherapy, radiotherapy, targeted therapy, immunotherapy and hormonal therapy for cancer treatments are covered. The answer is A.

Psychiatric treatments during confinement in Hong Kong as recommended by a specialist are covered by the VHIS. The answer is D.

VHIS Providers are required to explain their underwriting decisions and application results to the applicants concerned and, upon the applicants’ request, provide written notice for such explanations. The answer is D.

It is not mandatory for VHIS Providers to accept any applications. They may underwrite the insured persons to assess their risks, and decide whether to accept the applications unconditionally, accept the applications with premium loading and/or case-based exclusions, or reject the applications. The answer is A.

Upon successful registration as VHIS Providers, insurance companies must provide their existing policyholders of individual hospital insurance with an opportunity to switch (or “migrate”) to Certified Plans. The answer is B.

Either the combined policy or the package policy is a single policy document that provides more than one type of insurance, e.g. fire insurance, business interruption
insurance, theft insurance, employees’ compensation insurance and public liability
insurance. This is increasingly the trend, as large organisations particularly become
more sophisticated in their risk management and insurance appreciation. The answer is D.

Household insurance includes not only property insurance (mainly on an “all risks” basis), but also some liability insurance and even some insurance of the person and pecuniary insurance. The answer is D.

The main element of cover for household insurance is property insurance of the buildings and/or contents belonging to the insured. The answer is A.

The main element of cover for household insurance is property insurance of the buildings and/or contents belonging to the insured. The answer is A.

Limitations and exclusions of household insurance cover war, riot and similar risks. The answer is B.

Household insurance (or “home insurance”) represents a major element in private insurances (sometimes called personal or private lines) which most insurers underwrite through their Fire Departments or Property Departments. The answer is A.

If the insured premises are made uninhabitable by an insured peril, the policy will reimburse the insured occupier for any costs of alternative accommodation or the insured landlord for any loss of rent. (These are actually pecuniary insurance.) The answer is B.

A household policy that provides protection only against loss or damage to contents means Content s Only Cover. It does not cover the buildings. There’s a greater chance for tenents to buy this kind of household insurance. The answer is A.

According to the pro rata average condition, where the premium is based on a
sum insured selected by the insured, the policy terms will include a pro rata average condition, so that if under-insurance exists at the time of loss, the insured will not be covered for the full
amount of loss. For example, if at the time of loss the sum insured represented only 80% of the value at risk, the claim payment would be limited to 80% of the loss, in no case exceeding the sum insured. The answer is D.