Topic 6 MCQs Business Law PDF

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SUBJECT: BSSLAW4

SECTION: AAI

DATE DUE:

TOPIC: INSURANCE LAW ANS # STATEMENTS AND CHOICES It is known as “The Insurance Code of the Philippines” as amended by Presidential Decree No. 612. A

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A. REPUBLIC ACT NO. 10607 B. REPUBLIC ACT NO. 8293 C. REPUBLIC ACT NO. 9160 D. REPUBLIC ACT NO. 3765 It refers to an agreement whereby one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown or contingent event. A. CONTRACT OF INSURANCE B. CONTRACT OF SURETYSHIP C. CONTRACT OF PARTNERSHIP D. CONTRACT OF LEASE It is not necessary for the validity of an insurance policy taken out by a married person on her life or that of her children. A. CONTRACT OF WIFE B. CONTRACT OF HUSBAND C. CONTRACT OF CHILDREN D. CONTRACT OF SPOUSE The subject to be insured does not authorize insurance for or against the drawing of any____, or for or against any chance or ticket in a lottery drawing a prize. A. RAFFLE B. PRIZE C. REWARD D. LOTTERY All kinds of _____ are subject to the provisions of this chapter so far as the provisions can apply. A. PROTECTION B. INDEMNITY C. SECURITY D. INSURANCE Every partnership, association, or corporation duly authorized to transact insurance business as elsewhere

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provided in this code, may be _____. A. INSURANCE B. INSURED C. INSURER D. PROTECTED Which of the following cannot be insured? A. PRIVATE ENEMY B. ANY PERSON C. CORPORATION D. PUBLIC ENEMY The insurance is deemed to be upon the interest of the_____, who does not cease to be a party to the original contract, and any act of his, prior to the loss, which would otherwise avoid the insurance, will have the same effect. A. MORTGAGOR B. MORTGAGEE C. OWNER D. INSURED If an insurer assents to the _____of insurance from a mortgagor to a mortgagee, and, at the time of his assent, imposes further obligations on the assignee, making a new contract with him, the acts of the mortgagor cannot affect the rights of said assignee. A. CANCELLATION B. TRANSFER C. REVOCATION D. AMENDMENT Every person has an insurable interest in the life and health in all of the following, except: A. OF HIMSELF, OF HIS SPOUSE AND OF HIS RELATIVES B. OF ANY PERSON UNDER A LEGAL OBLIGATION TO HIM FOR THE PAYMENT OF MONEY, OR RESPECTING PROPERTY OR SERVICES, OF WHICH DEATH OR ILLNESS MIGHT DELAY OR PREVENT THE PERFORMANCE C. OF ANY PERSON ON WHOM HE DEPENDS WHOLLY OR IN PART FOR EDUCATION OR

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SUPPORT, OR IN WHOM HE HAS A PECUNIARY INTEREST D. OF ANY PERSON UPON WHOSE LIFE ANY ESTATE OR INTEREST VESTED IN HIM DEPENDS. The insured shall have the right to change the ______he designated in the policy, unless he has expressly waived this right in said policy. A. REPRESENTATIVE B. LEADER C. BENEFICIARY D. SELECTED He shall receive the proceeds of the life insurance upon the death of the insured if not otherwise disqualified. A. PRINCIPAL B. ACCOMPLICE C. NEAREST RELATIVE D. ACCESSORY It refers to every interest in property, whether real or personal, or any relation thereto, or liability in respect thereof, of such nature that a contemplated peril might directly damnify the insured. A. INSURABLE INTEREST B. PERSONAL INTEREST C. MARKETABLE INTEREST D. REAL INTEREST An insurable interest in property may consist in all of the following, except: A. AN EXISTING INTEREST B. AN INCHOATE INTEREST FOUNDED ON AN EXISTING INTEREST C. EXPECTANCY, COUPLED WITH AN EXISTING INTEREST IN THAT OUT OF WHICH THE EXPECTANCY ARISES. D. A PREVIOUS INTEREST A _____or depository of any kind has an insurable interest in a thing held by him as such, to the extent of his liability but not to exceed the value thereof. A. CARRIER B. HOLDER

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C. IMPORTER D. EXPORTER A mere _____ or expectant interest in anything, not founded on an actual right to the thing, nor upon any valid contract for it, is not insurable. A. PREDICTED B. CONTINGENT C. ABSOLUTE D. CONTRACT The______ of an insurable interest in property is the extent to which the insured might be damnified by loss or injury thereof. A. PROPORTION B. MEASURE C. RATIO D. AMOUNT No contract or policy of insurance on property shall be ______except for the benefit of some person having an insurable interest in the property insured. A. UNENFORCEABLE B. ENFORCEABLE C. VALID D. VOID An ______insured must exist when the insurance takes effect, and when the loss occurs, but need not exist in the meantime; and interest in the life or health of a person insured must exist when the insurance takes effect, but need not exist thereafter or when the loss occurs. A. INTEREST IN HEALTH B. INTEREST IN PROPERTY C. INTEREST IN MARINE D. INTEREST IN FIRE A change of interest in any part of a thing insured unaccompanied by a corresponding change of interest in the insurance, _____the insurance to an equivalent extent, until the interest in the thing and the interest in the insurance are vested in the same person. A. REVOKES B. AMENDS

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C. MODIFIES D. SUSPENDS A change of interest in a thing insured, after the occurrence of an injury which results in a _____,does not affect the right of the insured to indemnity for the loss. A. GAIN B. INTEREST C. PROFIT D. LOSS A change of interest in one or more of several _____things, separately insured by one policy, does not avoid the insurance as to the others. A. EXACT B. THE SAME C. EQUAL D. DISTINCT A change of interest, by_____, on the death of the insured, does not avoid an insurance; and his interest in the insurance passes to the person taking his interest in the thing insured. A. WRITING B. LEGAL TRANSFER C. WILL OR SUCCESSION D. ORAL TRANSFER A transfer of interest by one of several partners, _____, or owners in common, who are jointly insured, to the others, does not avoid an insurance even though it has been agreed that the insurance shall cease upon an alienation of the thing insured. A. JOINT OWNERS B. SINGLE OWNERSHIP C. SEPARATE OWNERS D. DISTINCT OWNERS Every stipulation in a policy of insurance for the payment of loss whether the person insured has or has not any interest in the property insured, or that the policy shall be received as proof of such interest, and every policy executed by way of gaming or wagering, is_____. A. VALID

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B. VOID C. NULL D. LEGAL A neglect to communicate that which a party knows and ought to communicate. A. CONCEALMENT B. REPRESENTATION C. DESERTION D. DISCARD It entitles the injured party to rescind a contract of insurance. A. REPRESENTATION B. DESERTION C. DISCARD D. CONCEALMENT Each party to a contract of insurance must communicated to the other, in good faith, all facts within his knowledge which are material to the contract and as to which he makes no______, and which the other has not the means of ascertaining. A. WARRANTY B. CONTRACT C. INSURANCE D. BENEFICIARY An intentional and _____omission, on the part of one insured, to communicate information of matters proving or tending to prove the falsity of a warranty, entitles the insurer to rescind. A. NEGLIGENCE B. FRAUDULENT C. UNINTENTIONAL D. ACCIDENTAL Neither party to a contract of _____is bound to communicate information of the matters following, except in answer to the inquiries of the other, those of which the other waives communication. A. PARTNERSHIP B. WARRANTIES C. GUARANTEE D. INSURANCE

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It is to be determined not by the event, but solely by the probable and reasonable influence of the facts upon the party to whom the communication is due, in forming his estimate of the disadvantages of the proposed contract, or in making his inquiries. A. TRANSPARENCY B. FORMALITY C. MATERIALITY D. LEGALITY Each party to a contract of _____is bound to know all the general causes which are open to his inquiry, equally with that of the other, and which may affect the political or material perils contemplated; and all general usages of trade. A. PARTNERSHIP B. INSURANCE C. GUARANTEE D. ADHESION It may be waived, either by the terms of the insurance or by neglect to make inquiry as to such facts, where they are distinctly implied in other facts of which information is communicated. A. RIGHT TO INFORMATION OF MATERIAL FACTS B. RIGHT TO ACCESS OF DATA C. RIGHT TO INSURER D. RIGHT TO EXPRESS IDEAS Information of the nature or amount of the interest of one insured need not be ______unless in answer to an inquiry, except as prescribed by section fifty-one. A. COMMUNICATED B. CONNECTED C. ACCESSED D. EXPRESSED Neither party to a contract of _____is bound to communicate, even upon inquiry, information of his own judgment upon the matters in question. A. ADHESION B. GUARANTEE C. PARTNERSHIP D. INSURANCE

B

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It may be oral or written in insurance law. A. CONCEALMENT B. REPRESENTATION C. DEMONSTRATION D. CONTRACT A representation may be made at the time of, or before, ______of the policy. A. ISSUANCE The language of a representation is to be interpreted by the same rules as the language of ______in general. A. CONTRACTS B. BUSINESS C. PARTNERSHIP D. ENTERPRISE A representation as to the future is to be deemed a_____, unless it appears that it was merely a statement of belief or expectation. A. PROMISE B. PLEDGE C. CONTRACT D. DEAL A warranty that can be qualified by representation. A. EXPRESS B. GENERAL C. SPECIFIC D. IMPLIED A representation may be ______or withdrawn before the insurance is effected, but not afterwards. A. RESCINDED B. ALTERED C. REVOKED D. CANCELLED A representation must be presumed to refer to the date on which the _____goes into effect. A. PARTY B. CONTRACT C. BUSINESS D. INSURANCE When a person insured has no _____of a fact, he may

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nevertheless repeat information which he has upon the subject, and which he believes to be true, with the explanation that he does so on the information of others. A. AWARENESS B. PERSONAL KNOWLEDGE C. INFORMATION D. EVIDENCE A representation is to be deemed _____when the facts fail to correspond with its assertions or stipulations. A. VOID B. VALID C. TRUE D. FALSE If a representation is false in a material point, whether affirmative or promissory, the injured party is entitled to rescind the contract from the time_______. A. WHEN THE REPRESENTATION BECOMES VOID B. WHEN THE REPRESENTATION BECOMES INVALID C. WHEN THE REPRESENTATION BECOMES FALSE D. WHEN THE REPRESENTATION BECOMES ACCEPTABLE The ______of a representation is determined by the same rules as the materiality of concealment. A. TRANSPARENCY B. MATERIALITY C. CORRECTNESS D. EFFECIENCY The provisions of this chapter apply as well to a _____of a contract of insurance as to its original formation. A. REVOCATION B. SUSPENSION C. CANCELLATION D. MODIFICATION Whenever a right to _____ a contract of insurance is given to the insurer by any provision of this chapter, such right must be exercised previous to the commencement of an action on the contract.

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A. AMEND B. MODIFY C. RESCIND D. SUSPEND It refers to the written instrument in which a contract of insurance is set forth. A. RULES AND REGULATIONS OF INSURANCE B. LAW OF INSURANCE C. POLICY OF INSURANCE D. STANDARDS OF INSURANCE All of the following must be written in the blank space provided in the policy that is available in printed form, except: A. PHRASE B. CLAUSE C. MARK D. TRADEMARK A policy of insurance must specify all of the following, except: A. THE AMOUNT TO BE INSURED EXCEPT IN THE CASES OF OPEN OR RUNNING POLICIES B. THE PARTIES BETWEEN WHOM THE CONTRACT IS MADE C. THE PROPERTY OR LIFE INSURED D. THE PERSONAL OBLIGATION OF THE INSURED It may be issued to bind insurance temporarily pending the issuance of the policy. A. PAGE NOTES B. COVER NOTES C. CONTENT NOTES D. BACK NOTES The insurance ______shall be applied exclusively to the proper interest of the person in whose name or for whose benefit it is made unless otherwise specified in the policy. A. INTEREST B. PROCEEDS C. SALVAGE D. LOSS

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When an insurance contract is executed with an ______as the insured, the fact that his principal or beneficiary is the real party in interest may be indicated by describing the insured as agent or trustee, or by other general words in the policy. A. REPRESENTATIVE B. PRINCIPAL C. AGENT D. INSURER To render an insurance effected by one partner or partowner, applicable to the interest of his co-partners or other part-owners, it is necessary that the _______should be such as are applicable to the joint or common interest. A. CONTENTS OF POLICY B. TERMS OF THE POLICY C. REQUIREMENTS OF THE POLICY D. PRE REQUISITES OF THE POLICY When the description of the insured in a policy is so _____that it may comprehend any person or any class of persons, only he who can show that it was intended to include him, can claim the benefit of the policy. A. SPECIFIC B. GENERAL C. ABSOLUTE D. CONDITIONAL A ______may be so framed that it will inure to the benefit of whomsoever, during the continuance of the risk, may become the owner of the interest insured. A. CONTRACT B. AGREEMENT C. POLICY D. LICENSE The mere transfer of a thing insured does not transfer the policy, but _____it until the same person becomes the owner of both the policy and the thing insured. A. AMENDS B. REVOKES C. CANCELLS D. SUSPENDS

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All of the following are the types of a policy of insurance, except: A. OPEN B. VALUED C. CLOSE D. RUNNING A policy in which the value of the thing insured is not agreed upon, but is left to be ascertained in case of loss. A. CLOSE B. OPEN C. VALUED D. RUNNING A policy in which expresses on its face an agreement that the thing insured shall be valued at a specific sum. A. VALUED B. RUNNING C. OPEN D. CLOSE A policy in which contemplates successive insurances, and which provides that the object of the policy may be from time to time defined, especially as to the subjects of insurance, by additional statements or indorsements. A. VALUED B. OPEN C. CLOSE D. RUNNING A condition, stipulation, or agreement in any policy of insurance, limiting the time for commencing an action thereunder to a period of less than one (1) year from the time when the cause of action accrues, is_____. A. VALID B. ACCEPTABLE C. ENFORCEABLE D. VOID No policy of insurance other than life shall be cancelled by the insurer except upon prior notice thereof to the insured, and no notice of cancellation shall be effective unless it is based on the occurrence, after the effective date of the policy, in any of the following, except: A. NONPAYMENT OF PREMIUM

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B. CONVICTION OF A CRIME ARISING OUT OF ACTS INCREASING THE HAZARD INSURED AGAINST C. DISCOVERY OF FRAUD OR MATERIAL MISREPRESENTATION D. FINANCIAL CHANGES IN THE PROPERTY INSURED WHICH RESULT IN THE PROPERTY BECOMING UNINSURABLE All notices of cancellation shall be in writing, mailed or delivered to the named insured at the address shown in the policy, or to his broker provided the broker is authorized in _____by the policy owner to receive the notice of cancellation on his behalf. A. WRITING B. WILL C. SUCCESSION D. PRINCIPAL Any _____written for a term of less than one (1) year shall be considered as if written for a term of one (1) year. A. REPORT B. POLICY C. INSURANCE D. WARRANTY It is either expressed or implied. A. WARRANTY B. REPRESENTATION C. POLICY D. RULES All of the following are cases in which warranties may be related to, except: A. PAST B. FUTURE C. PRESENT D. BEYOND No particular form of words is necessary to create a______. A. POLICY B. REPRESENTATION C. CONTRACT

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D. WARRANTY Every_______, made at or before the execution of a policy, must be contained in the policy itself, or in another instrument signed by the insured and referred to in the policy as making a part of it. A. IMPLIED WARRANTY B. EXPRESS WARRANTY C. ABSOLUTE WARRANTY D. CONDITIONAL WARRANTY A statement in a policy, of a matter relating to the person or thing insured, or to the risk. A. EXPRESS WARRANTY B. IMPLIED WARRANTY C. ABSOLUTE WARRANTY D. CONDITIONALL WARRANTY A ______in a policy, which imparts that it is intended to do or not to do a thing which materially affects the risk, is a warranty that such act or omission shall take place. A. STATEMENT B. REQUIREMENT C. REPORT D. CONTENT When, before the time arrives for the performance of a warranty relating to the future, a loss insured against happens, or performance becomes _____at the place of the contract, or impossible, the omission to fulfill the warranty does not avoid the policy. A. VOID B. VALID C. ENFORCEABLE D. UNLAWFUL The _____of a material warranty, or other material provision of a policy, on the part of either party thereto, entitles the other to rescind. A. VIOLATION B. RULES C. POLICY D. REQUIREMENT It may declare that a violation of specified provisions thereof shall avoid it; otherwise the breach of an

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immaterial provision does not avoid it. A. POLICY B. CONTRACT C. RULES D. WARRANTY It merely exonerates an insurer from the time that it occurs, or where it is broken in its inception, prevents the policy from attaching to the risk. A. BREACH OF WARRANTY WITHOUT FRAUD B. BREACH OF CONTRACT C. BREACH OF IMMATERIAL D. BREACH OF WARRANTY WITH LOSS Payment in which the insurer is entitled to as soon as the thing insured is exposed to the peril insured against. A. REBATE B. PREMIUM C. PREPAID D. POST PAID Employees of the Republic of the Philippines, including its political subdivisions and instrumentalities, and government-owned or -controlled corporations, may pay their insurance premiums and loan obligations through_____. A. BANK B. SALARY DEDUCTION C. PREPAID D. POST PAID It is a conclusive evidence of its payment, so far as to make the policy binding, notwithstanding any stipulation therein that it shall not be binding until the premium is actually paid. A. RECEIPT OF PREMIUM B. PROMISSORY NOTE C. RECEIPT OF CONTRACT D. PROOF OF PAYMENT A person insured is entitled to a return of______. A. INVESTMENT B. PREMIUM C. INSURANCE D. ASSETS

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