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IIQE papers (insurance)
Paper 1Principles and Practice of Insurance✓MPF intermediaries
MPFMPF Intermediaries ExaminationThese are Scenario Mode questions from IIQE Prep: the hardest questions in our IIQE Paper 1 bank, from client scenarios and calculations to fine-print rules. Answers and worked explanations are shown. No sign-up needed — see the style for yourself.
Which three of the following illustrate ancillary benefits of insurance? (i) a bridge project obtains bank finance once it is insured (ii) an insurer employs local claims staff (iii) a fire victim receives a claim payment (iv) a surveyor's report leads a factory to improve fire safety
Answer: (i), (ii) and (iv). Statements (i), (ii) and (iv) are true; (iii) is not.(i) True. Economic growth and development.(ii) True. Employment.(iii) False. Compensation to insured victims is the primary benefit.(iv) True. Loss prevention and loss reduction.Why not the others:• (i), (ii) and (iii): includes (iii), which is false, and leaves out (iv), which is true.• (i), (iii) and (iv): includes (iii), which is false, and leaves out (ii), which is true.• (ii), (iii) and (iv): includes (iii), which is false, and leaves out (i), which is true.Watch out: Treating the claim payment as ancillary; it is the primary benefit.Rule: Ancillary benefits include economic development, employment and loss control; compensation is primary.Source: IA P1 Study Notes, 2024 Edition (8th ed., Nov 2024; for exams from 17 Feb 2025), 1.2(b), p. 1/4
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Start practising →Original study material written to the public IIQE Paper 1syllabus, not past or official papers. Verify any figures and rules against the regulator's current guidance before relying on them. IIQE Prep is an independent study service, not affiliated with or endorsed by the Insurance Authority, the IIQE administrator (the Vocational Training Council) or the Mandatory Provident Fund Schemes Authority (MPFA). 'IIQE' and 'MPF' are used only to describe the examinations.
An agent authorised only to sell travel insurance for an insurer purports to grant fire cover on a client's shop. Until the insurer decides, the proposed fire contract is:
Answer: technically void, but open to ratification. A contract made without authority from the insurer is technically void, but the insurer may subsequently accept the insurance and confirm cover, so the contract becomes valid retrospectively.Why not the others:• voidable at the client's option: The defect is lack of authority, which gives the client no such option.• unenforceable until a policy is issued: The problem is lack of authority, not a missing policy.• valid and binding on the insurer from the start: The agent had no authority for fire business, so the insurer is not bound unless it ratifies.Watch out: Assuming any cover granted by an insurer's agent binds the insurer.Rule: Cover granted without authority is technically void unless the principal ratifies it.Source: IA P1 Study Notes, 2024 Edition (8th ed., Nov 2024; for exams from 17 Feb 2025), 2.2.2(b), p. 2/6
A personal accident policy excludes injury 'directly or indirectly caused by' riot. Hurrying home along a dark back lane because a riot has closed his usual route, the insured trips on a kerb and breaks a leg. The claim is most likely:
Answer: excluded, as riot contributed even indirectly. The riot is what put him on the dark lane, so it is a remote contributory cause of the injury. An exclusion of loss 'directly or indirectly' caused by an excepted peril has been held to apply even where that peril was only a remote contributory factor, as in the decided case of an officer killed by a train in wartime.Why not the others:• covered, as riot was not the last cause: being last in time is not the test under this wording.• covered, as the fall was the proximate cause: the wording excludes losses where riot was only a remote contributory factor.• covered, as 'indirectly' adds nothing to 'directly': 'directly' alone adds nothing, but 'directly or indirectly' widens the exclusion.Watch out: Applying the normal proximate cause test to 'directly or indirectly' wording.Rule: 'Directly or indirectly' exclusions catch remote as well as proximate causes.Source: IA P1 Study Notes, 2024 Edition (8th ed., Nov 2024; for exams from 17 Feb 2025), 3.3.4, p. 3/9
A third party sues an insured under a public liability policy. Besides whether the policy responds, the insurer must establish whether:
Answer: the insured is liable at law to the third party. For liability insurance, the insurer must also ascertain whether the insured is liable at law to the third party claimant.Why not the others:• the third party holds an IA licence: the claimant's licence status is irrelevant.• the insured paid the premium in cash: the payment method does not affect liability.• the third party has insurance of its own: the claimant's own cover does not decide the insured's liability.Watch out: Stopping at policy liability and forgetting legal liability in liability classes.Rule: Liability claims have two liability questions: under the policy, and at law to the third party.Source: IA P1 Study Notes 2024 Ed. §4.7(c)(i), p.4/6
A contract on a group of persons under which accumulated contributions go to the last survivor or survivors at the end of a set period is a:
Answer: tontine. A tontine is an unusual contract on a group of persons, paying accumulated contributions to the last survivor(s); it is long term class E.Why not the others:• group life policy: group life pays on death, not to survivors of a pool.• capital redemption contract: capital redemption is not related to human life.• class G retirement scheme contract: class G provides retirement scheme benefits with a guarantee.Watch out: Choosing a group product because the stem mentions a group.Rule: Tontines are class E; only a handful of companies write classes B, E or F.Source: IA P1 Study Notes 2024 Ed. §5.1.1(a), p.5/1-5/2; Insurance Ordinance (Cap. 41) Sch. 1, Parts 2-3 (e-Legislation, checked 31 Oct 2026)
A proposed responsible officer of a broker company has a bachelor degree, 6 years' insurance experience and 1 year of management experience. Against GL23's general expectation, he:
Answer: falls short on management experience. An RO is generally expected to have at least 5 years' industry experience, including at least 2 years of management experience.Why not the others:• falls short, as a master's degree is the expected qualification: a bachelor degree meets the education expectation.• meets the expectation, as 5 years' experience is enough on its own: 2 of those years should be management experience.• falls short, as 10 years' industry experience is generally expected: the general expectation is 5 years.Watch out: Counting total experience and ignoring the management element.Rule: RO: bachelor degree (or IA-specified/equivalent qualification); generally 5 years' experience incl. 2 in management, commensurate with the business.Source: IA P1 Study Notes 2024 Ed. §6.2.4(c)(i) Responsible Officer, p.6/25-6/26
Which two of the following statements about the insurance provision in the anti-discrimination Ordinances are correct? (i) The SDO, DDO and FSDO contain an identical insurance provision (ii) The RDO contains the same insurance provision (iii) The treatment must rely on actuarial or other reliable data (iv) Any treatment is lawful if the insurer's profits require it
Answer: (i) and (iii).(i) True. An identical provision is in each of the first three Ordinances.(ii) False. The notes exclude the RDO from that identical provision.(iii) True. Part of the test, together with reasonableness.(iv) False. Profit is not the test.Watch out: Extending the insurance provision to the RDO.Rule: Test: reliable actuarial or other data, and reasonable having regard to the data and other relevant factors.Source: IA P1 Study Notes 2024 Ed. §7.3.2, p.7/14