🏠 Personal General Insurance (CIP-03)

1. Before recommending a personal lines insurance product to a consumer, the Central Bank of Ireland's Consumer Protection Code primarily requires the intermediary to:

1. Confirm in writing that the consumer has personally read all of the policy's exclusion clauses
2. Verify the consumer's PPS number for anti-money-laundering screening purposes
3. Gather sufficient information from the consumer to establish suitability and act in the consumer's best interests
4. Issue the full policy documentation within five working days of the initial enquiry

The CPC's 'Knowing the Consumer and Suitability' provisions require the firm to gather sufficient information to assess suitability and act in the consumer's best interests before making a recommendation; the other options describe unrelated administrative or AML tasks. (Central Bank of Ireland Consumer Protection Code – Knowing the Consumer: Suitability requirements)

2. Under the European Union (Insurance Distribution) Regulations 2018, before a non-life insurance contract is concluded with a consumer, the distributor must:

1. Provide at least three competing quotations from different insurers
2. Delay conclusion of the contract for a minimum of ten working days
3. Provide the Insurance Product Information Document only if the consumer specifically requests it
4. Assess the customer's demands and needs and provide information in a comprehensible form

The IDD, transposed by S.I. No. 229 of 2018, requires a demands-and-needs assessment and comprehensible pre-contractual information for every non-life sale; the IPID must be given proactively, not only on request. (European Union (Insurance Distribution) Regulations 2018 (S.I. No. 229 of 2018), transposing Directive (EU) 2016/97)

3. A personal lines customer is given a short, standardised document before buying a household policy, setting out the type of cover, the main exclusions and the customer's own obligations under the contract. This document is the:

1. Statement of suitability
2. Insurance Product Information Document (IPID)
3. Fact-find questionnaire
4. Terms of business letter

The IPID is the standardised pre-contractual document required under the IDD for non-life products, summarising cover, exclusions and obligations; a fact-find instead captures the customer's own circumstances. (European Union (Insurance Distribution) Regulations 2018 (S.I. No. 229 of 2018))

4. A consumer asks to buy a household policy on an execution-only basis, without receiving a personal recommendation from the intermediary. Under the IDD demands-and-needs test, this obligation:

1. Is suspended entirely, because no personal recommendation is being made to the consumer
2. Applies only where the intermediary charges a separate advice fee
3. Applies only to life assurance and pension contracts, not general insurance
4. Still applies, as a baseline requirement for every non-life sale, with or without advice

The demands-and-needs assessment is a minimum standard for every non-life sale, whether or not a personal recommendation or advice is provided, so an execution-only sale does not remove it. (European Union (Insurance Distribution) Regulations 2018 (S.I. No. 229 of 2018))

5. While helping a consumer complete a household insurance proposal form, an adviser should explain that, under the Consumer Insurance Contracts Act 2019, the consumer's duty is to:

1. Answer the specific questions the insurer asks honestly and with reasonable care
2. Volunteer every fact that could be material to the insurer, whether or not it is asked about
3. Sign a basis-of-contract clause confirming that all statements made are warranted to be true
4. Obtain independent legal advice before signing any proposal form

The 2019 Act abolished the consumer's common-law duty to volunteer material facts and made basis-of-contract clauses void, replacing them with a duty to answer the insurer's specific questions honestly and with reasonable care. (Consumer Insurance Contracts Act 2019, ss.8, 9 and 14)

6. Under the Minimum Competency Code, a person advising a retail consumer on personal general insurance, such as household or motor cover, must hold:

1. A recognised minimum competency qualification such as APA or CIP
2. A Qualified Financial Adviser (QFA) diploma only
3. A general primary degree in any discipline
4. Garda vetting clearance, with no further qualification requirement

The Minimum Competency Code and Regulations require holders of retail insurance advisory roles to hold an appropriate recognised qualification such as APA or CIP; the QFA designation instead covers savings, investment and pensions business. (Central Bank Minimum Competency Code 2017 and Minimum Competency Regulations 2017 (S.I. No. 391 of 2017))

7. The primary purpose of a 'fact-find' when advising a consumer on personal lines insurance is to:

1. Calculate the intermediary's commission on the proposed policy
2. Determine the length of the statutory cooling-off period that will apply
3. Identify the consumer's needs, existing cover and personal circumstances to establish suitability
4. Assess the financial strength and solvency of the underwriting insurer

A fact-find gathers the consumer's circumstances, needs and existing arrangements so the adviser can establish suitability, which underpins the CPC's suitability requirement; the other options relate to unrelated matters. (Central Bank of Ireland Consumer Protection Code – Knowing the Consumer: Suitability requirements)

8. An existing personal lines client has moved house and changed car since their policies were last arranged. Before recommending renewal terms, the adviser should:

1. Renew both policies automatically on last year's sums insured to save time
2. Rely on the client's original fact-find, since it remains valid indefinitely
3. Only revisit the fact-find if the renewal premium increases by more than 10%
4. Update the fact-find and needs assessment to reflect the client's changed circumstances

Suitability must reflect the consumer's current circumstances, so a material change such as a house or car move requires the fact-find and needs assessment to be updated before a fresh recommendation is made. (Central Bank of Ireland Consumer Protection Code – Knowing the Consumer: Suitability requirements)

9. Which of the following is NOT a requirement placed on an intermediary by the Central Bank's suitability obligations when advising on personal lines insurance?

1. Guaranteeing that the recommended product carries the lowest premium available in the market
2. Gathering sufficient information about the consumer's circumstances and existing cover
3. Explaining the recommendation in a way the consumer can reasonably be expected to understand
4. Keeping a record of the information gathered and the basis for the recommendation made

Suitability is about matching a product to the consumer's disclosed needs, not about guaranteeing the cheapest market price — a common misconception; the other three are genuine elements of the suitability and record-keeping obligations. (Central Bank of Ireland Consumer Protection Code – Knowing the Consumer: Suitability requirements)

10. During a fact-find for household and motor cover, a client discloses a recent serious illness that limits their mobility. The adviser should:

1. Disregard the disclosure, since it has no bearing on the suitability of general insurance products
2. Adapt communication and support to the client's disclosed needs while still assessing suitability
3. Decline to provide any further advice to the client for the remainder of the policy year
4. Immediately refuse to renew the client's existing policies on the grounds of increased risk

Where a consumer discloses a vulnerability, the adviser must adapt communication and support to that consumer's needs while still carrying out the suitability assessment, rather than ignoring it or withdrawing service. (Central Bank of Ireland Consumer Protection Code – provisions on consumers in vulnerable circumstances)

11. When assessing a client's need for income protection cover as part of a personal lines review, the key piece of information the adviser must establish is:

1. The client's preferred insurer brand for household cover
2. The no-claims discount currently applied to the client's motor policy
3. The client's current income, occupation and any existing sick-pay or protection arrangements
4. The make, model and registration year of the client's car

Income protection needs are driven by the client's income, occupation-related risk and any existing sick-pay or protection cover, since these determine the appropriate level of benefit; motor or household details are not relevant to this need. (Central Bank of Ireland Consumer Protection Code – suitability and needs analysis; standard Irish market practice)

12. Once a personal lines recommendation has been made to a consumer, the Consumer Protection Code requires the intermediary to keep a record of:

1. Only the consumer's signed proposal form, with no further documentation
2. A verbal summary that need not be retained in any written or electronic form
3. The intermediary's internal sales targets for the relevant period
4. The information gathered from the consumer and the rationale for the recommendation made

The suitability requirement includes retaining a record of the information gathered and the basis for the recommendation, so that suitability can be demonstrated later; a signed proposal form alone would not satisfy this. (Central Bank of Ireland Consumer Protection Code – Knowing the Consumer: Suitability requirements)

13. A client insists on buying a level of household cover that the adviser's needs assessment shows is unsuitable, for example a sum insured well below the reinstatement cost. What should the adviser do?

1. Arrange the policy exactly as requested without any further comment, since the client has final say
2. Warn the client clearly that the cover is unsuitable and record the warning and the client's decision
3. Refuse to arrange any insurance for the client under any circumstances
4. Silently increase the sum insured to the suitable level without informing the client

Where a consumer chooses cover the adviser considers unsuitable, the adviser must warn the consumer clearly and document the warning and the consumer's decision, rather than proceeding silently or refusing outright. (Central Bank of Ireland Consumer Protection Code – Knowing the Consumer: Suitability requirements)

14. For household buildings insurance, the sum insured should normally be based on the property's:

1. Current market value if the property were sold today
2. Original purchase price paid by the current owner
3. Full rebuilding (reinstatement) cost, rather than its market or sale value
4. Local authority rates valuation for the current year

Buildings sums insured must reflect the full cost of rebuilding the property, since that is what an insurer must fund after a total loss; market value, purchase price and rates valuation can all differ significantly from rebuilding cost. (Standard household policy 'condition of average'; Insurance Institute CIP-03 handbook)

15. The 'condition of average' in a household policy is triggered when, at the time of loss:

1. The sum insured is greater than the full reinstatement value of the property
2. The sum insured is less than the full reinstatement value of the property or contents
3. The claim amount is smaller than the policy excess
4. Two different insurers have each covered part of the same risk

Average applies where the sum insured is inadequate relative to the full value at risk, reducing the claim payment proportionately; over-insurance, a small claim below the excess, and co-insurance do not, by themselves, trigger average. (Standard household policy 'condition of average'; Insurance Institute CIP-03 handbook)

16. A house has a full rebuilding cost of €300,000 but is insured for only €200,000. A partial fire loss produces a repair cost of €60,000. Applying the condition of average, the amount the insurer pays is:

1. €60,000
2. €90,000
3. €40,000
4. €20,000

Average applies the ratio of sum insured to full value: €60,000 × (€200,000 ÷ €300,000) = €40,000; paying €60,000 ignores average, €90,000 wrongly inverts the ratio, and €20,000 wrongly applies the shortfall rather than the sum-insured ratio. (Standard household policy 'condition of average'; Insurance Institute CIP-03 handbook)

17. A property has a full rebuilding cost of €250,000 but is insured for €150,000. A storm causes damage costed at €80,000, and the policy carries a €500 excess. After applying the condition of average and the excess, the insurer pays:

1. €48,000
2. €79,500
3. €32,000
4. €47,500

Average first reduces the claim: €80,000 × (€150,000 ÷ €250,000) = €48,000, from which the €500 excess is deducted, giving €47,500; the other figures omit the excess, omit average, or wrongly apply the shortfall ratio. (Standard household policy 'condition of average'; Insurance Institute CIP-03 handbook)

18. An adviser recommends that a client's buildings sum insured be reviewed and increased each year in line with rebuilding costs. The main reason for this is that:

1. The Health Insurance Authority requires an annual increase in household sums insured
2. Rising rebuilding costs can leave a static sum insured inadequate and trigger average
3. Household policies automatically lapse if the sum insured is not increased every year
4. The Central Bank of Ireland mandates a fixed minimum annual increase for all household sums insured

Because rebuilding costs tend to rise over time, a sum insured that is not periodically reviewed can fall below the true reinstatement cost and trigger average; the Health Insurance Authority regulates private health insurance, not household cover. (Standard household policy 'condition of average'; Insurance Institute CIP-03 handbook)

19. On a 'new-for-old' household contents basis, the contents sum insured should reflect:

1. The original purchase price of each item when first bought
2. The resale value the items would achieve at auction
3. An average value calculated across all main contents items
4. The full cost of replacing all contents as new at the time of loss

A new-for-old contents basis requires the sum insured to reflect the full replacement cost as new, not depreciated resale value, original purchase price, or a crude average across items, which would leave the sum insured inadequate. (Standard household policy – new-for-old contents basis; Insurance Institute CIP-03 handbook)

20. A client proposing household buildings cover is unsure of the rebuilding cost and simply enters the price they paid for the house as the sum insured. The adviser should recommend that the client instead:

1. Continue using the purchase price, since it is a reliable proxy for rebuilding cost
2. Obtain a proper rebuilding cost assessment from a surveyor or recognised cost guide
3. Use the average house price for the local area instead
4. Use the outstanding mortgage balance as the sum insured

Purchase price, local average house prices and mortgage balances can all diverge sharply from the actual cost of rebuilding; a proper rebuilding cost assessment gives the accurate basis needed to avoid underinsurance and average. (Standard household policy 'condition of average'; Insurance Institute CIP-03 handbook)

21. Some household policies include automatic index-linking of the buildings sum insured during the year of cover to help keep pace with rebuilding cost inflation. This feature:

1. Removes the condition of average permanently, regardless of the sum insured chosen
2. Applies only to contents cover and has no effect on buildings sums insured
3. Guards against in-year inflation but does not cure an inadequate starting sum insured
4. Guarantees full reinstatement cover even if the client deliberately under-declares the rebuilding cost

Index-linking adjusts the sum insured for inflation during the policy year but does not cure an inadequate starting figure, so average can still apply if the original sum insured under-valued the property. (Standard household policy 'condition of average'; Insurance Institute CIP-03 handbook)

22. In household insurance, 'underinsurance' describes a situation where:

1. The sum insured is less than the full value of the property or contents at risk
2. The sum insured is higher than the full value of the property or contents
3. The policy excess has been set at an unusually low level
4. The annual premium is lower than the market average for similar risks

Underinsurance means the declared sum insured falls short of the true value at risk, which is precisely what exposes the policyholder to the condition of average; a low excess or below-average premium are unrelated concepts. (Standard household policy 'condition of average'; Insurance Institute CIP-03 handbook)

23. Which of the following would NOT normally be an acceptable basis for setting a household buildings sum insured?

1. The price the property would achieve if sold on the open market
2. Reinstatement cost assessed by a chartered surveyor
3. A published cost-per-square-metre rebuilding cost guide
4. Rebuilding cost inclusive of professional fees and debris removal

Market/sale value reflects location and demand rather than the cost of rebuilding, so it is not an acceptable basis for a buildings sum insured; a surveyor's assessment and recognised rebuilding cost guides are legitimate approaches. (Standard household policy 'condition of average'; Insurance Institute CIP-03 handbook)

24. A house has a full rebuilding cost of €180,000 and is insured for exactly €180,000. Following a total loss, the effect of the condition of average on the claim is:

1. The claim is still reduced by a fixed percentage under average
2. Average applies to every claim regardless of whether the sum insured is adequate
3. The payment is automatically capped at 80% of the sum insured under average
4. None: because the sum insured matches the full value, average does not reduce the payment

Average only bites when the sum insured is less than the full value; where the two match, there is no shortfall for average to apply to, so the claim is met in full subject to the ordinary policy terms. (Standard household policy 'condition of average'; Insurance Institute CIP-03 handbook)

25. Household contents have a full replacement value of €40,000 but are insured for €30,000. A theft claim of €12,000 is admitted, with no policy excess. Applying the condition of average, the insurer pays:

1. €12,000
2. €9,000
3. €16,000
4. €3,000

Average applies the sum-insured ratio: €12,000 × (€30,000 ÷ €40,000) = €9,000; paying €12,000 ignores average, €16,000 wrongly inverts the ratio, and €3,000 wrongly applies the shortfall ratio. (Standard household policy 'condition of average'; Insurance Institute CIP-03 handbook)

26. From the insurer's perspective, the main purpose of the condition of average is to:

1. Increase the insurer's profit margin on every claim it settles
2. Determine the level of policy excess applied to large claims
3. Keep claim payments fair by reducing them in proportion to any underinsurance
4. Ensure compliance with Central Bank of Ireland capital adequacy rules

Average exists to keep the relationship between premium, sum insured and claim payment fair across all policyholders, discouraging underinsurance, rather than to boost insurer profit, meet capital rules, or set the excess. (Standard household policy 'condition of average'; Insurance Institute CIP-03 handbook)

27. Under the Road Traffic Act 1961 (as amended), it is a criminal offence in Ireland to use a mechanically propelled vehicle in a public place unless which of the following is in force?

1. A motor breakdown and recovery policy arranged with the vehicle's manufacturer
2. A legal expenses policy protecting the registered owner of the vehicle
3. An approved policy covering third-party liability for injury, death and property damage
4. A comprehensive policy covering accidental damage to the insured's own vehicle

Section 56 of the Road Traffic Act 1961 makes it an offence to use a vehicle in a public place without an approved policy covering third-party liability for injury, death and property damage; own-vehicle, legal expenses or breakdown cover is not part of the statutory minimum. (Road Traffic Act 1961, s.56 (as amended))

28. Under the codified EU Motor Insurance Directive (as amended by Directive (EU) 2021/2118), the minimum compulsory cover for third-party property damage is expressed on which basis?

1. Per accident, irrespective of the number of victims
2. Per victim, so that the minimum multiplies with each additional claimant
3. Per policy year, aggregated across all accidents in that year
4. Per vehicle involved in the collision

The Directive sets the third-party property-damage minimum on a per-accident basis, irrespective of the number of victims, whereas the personal-injury minimum can alternatively be expressed per victim. (Directive 2009/103/EC as amended by Directive (EU) 2021/2118 (Motor Insurance Directive))

29. In the Irish motor insurance market, how does compulsory cover for third-party personal injury typically compare with the EU statutory minimum for third-party property damage?

1. Both personal injury and property damage cover are capped at the same statutory minimum
2. Personal injury cover is unlimited, while property damage cover is subject to a statutory minimum
3. Property damage cover is unlimited, while personal injury cover is capped at €6,450,000 per accident
4. Personal injury cover is capped at €1,300,000 per victim, matching the property damage minimum

Irish motor insurers provide third-party personal-injury cover on an unlimited basis, exceeding the EU minimum, while property damage cover is set against the statutory per-accident minimum under the Directive. (Directive 2009/103/EC as amended by Directive (EU) 2021/2118; Road Traffic Act 1961, s.56)

30. Which body compensates victims of road traffic accidents in Ireland that are caused by uninsured or unidentified (untraced) drivers?

1. Injuries Resolution Board (IRB)
2. Insurance Compensation Fund (ICF)
3. Motor Insurers' Bureau of Ireland (MIBI)
4. Financial Services and Pensions Ombudsman (FSPO)

MIBI compensates victims of uninsured and untraced drivers under its agreement with the Minister for Transport; the ICF, IRB and FSPO deal with insurer insolvency, injury assessment and complaints respectively. (MIBI Agreement 2009 (Uninsured/Untraced Drivers) between MIBI and the Minister for Transport)

31. Which statement best describes insurer participation in the Motor Insurers' Bureau of Ireland (MIBI)?

1. Membership of MIBI is optional and chosen only by insurers offering comprehensive cover
2. Only insurers writing commercial fleet business are required to join MIBI
3. MIBI membership is limited to insurers that have previously become insolvent
4. Every insurer underwriting motor business in Ireland must be a member of MIBI

Every insurer underwriting motor business in Ireland must be a member of MIBI, which funds compensation for uninsured/untraced-driver claims across the whole market. (MIBI Agreement 2009 (Uninsured/Untraced Drivers) between MIBI and the Minister for Transport)

32. A non-life insurer authorised in Ireland is declared insolvent. Policyholder A has an admitted third-party motor injury claim of €40,000. Policyholder B has an admitted household contents claim of €40,000 with the same insurer. Applying the Insurance Compensation Fund rules, how much will each receive?

1. Policyholder A receives €26,000; Policyholder B receives €40,000 in full
2. Both policyholders receive €26,000, being 65% of the claim
3. Policyholder A receives €40,000 in full; Policyholder B receives €26,000
4. Both policyholders receive €40,000 in full, as the cap of €825,000 has not been reached

The ICF meets third-party motor claims in full, while non-motor claims such as household are capped at 65% of the sum due or €825,000, whichever is less; 65% of €40,000 is €26,000. (Insurance (Amendment) Act 1964 as amended by the Insurance (Amendment) Act 2011)

33. Before a person injured in a road traffic accident can generally issue court proceedings for damages against the at-fault driver, to which body must the claim first be submitted for assessment?

1. The Financial Services and Pensions Ombudsman (FSPO)
2. The Motor Insurers' Bureau of Ireland (MIBI)
3. The Circuit Court, without any prior assessment
4. The Injuries Resolution Board (IRB)

Most personal-injury claims, including motor claims, must first be assessed by the Injuries Resolution Board (formerly PIAB) before court proceedings may issue. (Personal Injuries Assessment Board Act 2003 (as amended by the Personal Injuries Resolution Board Act 2022))

34. A motor policy that provides only the minimum cover required by law — indemnifying the insured against liability for injury or damage caused to third parties, with no cover for the insured's own vehicle — is best described as which type of cover?

1. Third Party, Fire and Theft cover
2. Third Party Only cover
3. Comprehensive ("fully comp") cover
4. Named Driver Only cover

Third Party Only is limited to the statutory minimum — liability to others — with no cover for the insured's own vehicle, distinguishing it from TPFT and comprehensive. (Standard motor policy wording; The Insurance Institute of Ireland — Personal General Insurance (CIP-03) handbook)

35. Which type of motor cover extends Third Party Only cover to also compensate the policyholder for loss of or damage to their own vehicle caused by fire or theft, but not by accidental collision?

1. Comprehensive ("fully comp") cover
2. Third Party Only cover
3. Third Party, Fire and Theft cover
4. Named Driver Only cover

TPFT adds first-party fire and theft protection to the statutory minimum but, unlike comprehensive cover, excludes accidental collision damage to the insured's own vehicle. (Standard motor policy wording; The Insurance Institute of Ireland — Personal General Insurance (CIP-03) handbook)