7. Explain, with examples, adverse selection and moral hazard problems in insurance.

(8 marks)

8. When must an insurable interest legally exist in property insurance for an insured to

receive payment for a loss from the insurer? (3 marks)

9. When must an insurable interest legally exist in life insurance? (3 marks)

10. List three basic purposes of subrogation. (6 marks)

True or False with explanation (Question 11-17, 3 marks each)

Determine and briefly explain whether the following statements about offer and acceptance

for insurance contracts is true.

11. In property and liability insurance, agents typically have the authority to bind coverage.

12. In life insurance, the agent can usually accept an offer by immediately binding coverage.

13. In property insurance, the offer and acceptance are usually in writing but may be oral.

14. In life insurance, the offer is merely the promise to pay the first premium.