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INSURANCE
INSURANCE OBJ:
01-10: CBAABBADAB
11-20: BBABADBAAB
21-30: CBDDDACADB
31-40: ABBDDCACBD
41-50: ABCAAABAAD
(2ai)
(PICK ANY ONE)
Insurable interest is a fundamental principle in insurance that refers to the financial or pecuniary (monetary) interest an individual or entity must have in the subject matter of an insurance policy.
OR
Insurable interest refers to the financial stake or relationship that an individual or entity has in an insured object or person, justifying their ability to obtain insurance coverage for potential losses.
(2aii)
(PICK ANY THREE)
(i) The insured must have a financial stake or interest in the subject matter of insurance.
(ii) The insured must have a legal relationship or right to the subject matter being insured.
(iii) There must be a possibility of the insured suffering a financial loss if the insured event happens.
(iv) The insured interest must be valid and lawful.
(v) The insurable interest must exist at the time the loss or damage occurs.
(2b)
(PICK ANY THREE)
(i) An insurable risk must be clearly defined and measurable.
(ii) Insurable risk should be an event that is unpredictable or accidental, rather than something certain to happen.
(iii) Insurable risks are generally individual or small-scale events rather than catastrophic or widespread events.
(iv) Insurable risks should be randomly distributed across a large population.
(v) The risk should be calculable by the insurer to determine an appropriate premium.
(7a)
A paid-up policy refers to an insurance policy that has been fully paid for and no further premium payments are required.
(7b)
(i) Insurer/Insurance Company: An insurer, also known as an insurance company or carrier, is the primary operator in the insurance market. Insurers offer various insurance policies to individuals, businesses, or other entities. They assume the financial risk associated with potential losses covered by the insurance policy in exchange for premium payments from policyholders. Insurers assess risks, calculate premiums, and manage claims payments.
(ii) Policyholder/Insured: The policyholder, also referred to as the insured, is an individual or entity that purchases an insurance policy from an insurer. The policyholder pays regular premiums to the insurer in exchange for the coverage provided by the policy. Policyholders can be individuals seeking personal insurance coverage (e.g., auto insurance, health insurance) or businesses seeking commercial insurance (e.g., property insurance, liability insurance).
(iii) Reinsurer: Reinsurers are companies that provide insurance coverage to other insurance companies. In essence, they insure the risks undertaken by primary insurers. Reinsurers help insurance companies manage their own risk exposure by spreading the risk across multiple parties. When an insurer transfers a portion of its risk to a reinsurer, it is known as reinsurance. Reinsurers provide financial stability to insurers, especially in the face of large or catastrophic losses.
(iv)
Insurance Broker/Agent: Insurance brokers or agents act as intermediaries between the insurers and the policyholders. They represent multiple insurance companies and help individuals or businesses find suitable insurance coverage that meets their needs. Brokers/agents provide guidance, advice, and expertise to policyholders, helping them understand different policy options, compare prices, and facilitate the purchase of insurance policies.
(1a)
The proximate cause of the accident was the presence of the heap of sand on the road, which led to the driver swerving and colliding with the road divider and Mr. Okuku.
(1bi)
The driver, Mr. Olu, was at fault.
(1bii)
Mr. Olu was at fault because he failed to exercise due care and attention while driving.
(1ci)
Comprehensive Motor Insurance policy
(1cii)
Workmen’s Compensation Insurance policy
(1di)
Sick Leave Benefit
(1dii) Permanent Disability Benefit
(1e)
Contractor’s All Risk (CAR) Insurance policy.
*NUMBER SIX*
(6a)
Reinsurance is the practice whereby an insurance company transfers some of its risks to another insurance company in exchange for a premium payment. In other words it is a type of insurance for insurance companies.
(6bi)
Individuals
[PICK ANY THREE]
(i) Financial protection: Insurance provides individuals with financial protection against unexpected events such as accidents illnesses or natural disasters. This helps to reduce the financial burden that can arise from such events.
(ii) Peace of mind: Having insurance helps individuals to feel more secure and at ease knowing that they are protected from potential risks.
(iii) Access to healthcare: Health insurance provides individuals with access to quality healthcare services at a fraction of the cost they would pay out of pocket.
(iv) Promotion of savings: Some types of insurance such as life insurance encourage individuals to save money over the long term by offering investment options.
(v) Protection of assets: Insurance can protect individuals’ valuable assets such as homes cars and businesses from damage or loss due to accidents or unforeseen events.
(vi) Social security benefits: Insurance can provide individuals with social security benefits such as disability income and pension plans which can be vital in times of need.
(6bii)
The society
[PICK ANY THREE]
(i) Risk reduction: Insurance helps reduce the risk of financial loss for both individuals and businesses which can ultimately promote economic stability.
(ii) Job creation: The insurance industry is a major source of employment providing jobs for many people in different fields such as underwriting claims sales marketing and customer service.
(iii) Disaster relief: Insurance companies often play a significant role in disaster relief efforts by providing financial support to individuals and businesses affected by natural disasters or other catastrophic events.
(iv) Encourages investment: Insurance companies invest heavily in different industries which can stimulate economic growth and development.
(v) Promote entrepreneurship: Insurance can help individuals start and grow businesses providing a safety net that enables them to take risks and innovate.
(vi) Provides peace of mind: By providing protection against unexpected risks insurance helps society to function more smoothly and with more peace of mind.
(3)
(PICK ANY FIVE)
(i) Sum Insured: The initial sum insured, which was N 80,000,000, serves as a reference point. The insurer will consider this value as the maximum amount payable under the policy.
(ii) Policy Coverage: The terms and conditions of the insurance policy will outline the specific coverage provided. The insurer will review the policy to ensure that fire damage is covered and falls within the scope of the policy.
(iii) Extent of Damage: The insurer will assess the extent of the fire damage to the shopping plaza. This evaluation includes the structural damage, loss of contents, and any other relevant factors that indicate the severity of the fire.
(iv) Market Value: The insurer may consider the current market value of the shopping plaza. This assessment takes into account factors such as property location, size, condition, and other market influences that could affect the value of the property.
(v) Depreciation: Depending on the terms of the policy, the insurer may apply depreciation to certain elements of the claim. Depreciation factors in the age and condition of the building and its contents, and it reduces the claim payout accordingly.
(vi) Salvage Value: If any salvageable items or parts of the shopping plaza remained after the fire, the insurer may deduct the estimated value of those salvageable assets from the claim payout. This helps offset the costs incurred by the insurer.
(vii) Deductibles and Excess: The insurance policy may have deductibles or excess clauses, which require the insured to contribute a certain amount towards the claim. The insurer will deduct the applicable deductible or excess from the final payout.
(viii) Adjusters’ Report: The insurer’s loss adjusters assess the claim and provide a report with their findings. The adjusters investigate the incident, evaluate the damage, and recommend an appropriate payout based on their professional judgment and the policy provisions.
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