2023/24 GOVERNMENT WASSCE INSURANCE REAL,SURE,RUNS, EXPO,,, CONFIRMED AND VERIFIED QUESTIONS AND ANSWERS BY COOLBOY FOR ALL COUNTRIES SUCH AS SIERRA LEONE,,GHANA,,, GAMBIA,,, LIBERIA AND NIGERIA

*INSURANCE*

*NUMBER TWO*

(2ai)

Insurable interest refers to an individual or entity having a financial stake or relationship to an insured item or person. It is the basis on which insurance contracts are designed and insured parties are identified as being eligible for coverage.

(2aii)

[PICK ANY THREE]

(i) Legitimate interest: The interest must not be frivolous or fictional, it must be a true relationship that has some degree of financial value.

(ii) Legal and valid: The interest must be legal and valid and the insurer must be able to demonstrate tangible evidence of such an interest.

(iii) Relevant and measurable: The interest must be measurable and relevant, it should not be speculative or vague.

(iv) Continuous: The interest must exist continuously throughout the duration of the policy period.

(v) At the time of loss: The interest must exist at the time of the loss or damage.

(vi) Direct or indirect interest: The interest can be direct or indirect; it can be related to either property or person.

(vii) Financial protection: The interest should provide financial protection against a potential loss or damage.

(2b)

[PICK ANY THREE]

(i) Fortuitous: The risk must be accidental or unintended. It should not be a predictable event.

(ii) Definite and determinable: The risk should be definite and determinable in terms of time place and extent of the loss or damage.

(iii) Large number of homogeneous risks: The risk should involve a large number of people exposed to the same risk.

(iv) Calculable probability: The probability of the risk occurring and the cost of loss or damage should be calculable and based on statistical data.

(v) Not catastrophic: The risk should not be catastrophic or result in a massive loss that would threaten the stability of the insurance company.

(vi) Adverse selection: The risk should be such that the insured party is not prone to engage in adverse selection i.e choosing to purchase insurance only when they anticipate a loss.

(vii) Affordable premiums: The premiums should be affordable and reasonable for the insured party.