CII 930 Practice Questions - Advanced Insurance Broking (930) Exam - CII 930 Practice Questions

Question 1

What is a primary strategic driver for an independent commercial insurance broker adopting a fee-for-service model instead of traditional brokerage commission?

To eliminate all FCA regulatory oversight regarding client money under CASS 5. To align compensation directly with advisory value and eliminate revenue volatility tied to soft underwriting market cycles. To automatically transfer client claims liability directly onto the broker's balance sheet. To guarantee that insurers will provide 100% indemnity without policy excesses.

Correct Answer:

To align compensation directly with advisory value and eliminate revenue volatility tied to soft underwriting market cycles.

Question 2

An insurance broking firm earns £800,000 in gross brokerage commission. It pays out 35% in sub-broker commissions and incurs £320,000 in direct operating expenses. What is the firm's net operating profit before tax?

£200,000 £520,000 £480,000 £160,000

Correct Answer:

£200,000

Question 3

In strategic broking management, how does a Managing General Agent (MGA) model differ fundamentally from a traditional independent retail broker model?

An MGA acts strictly as a representative of the policyholder without insurer delegation. An MGA holds delegated underwriting authority and claims handling powers from insurers, operating essentially as an underwriting agent. An MGA is exempt from FCA conduct rules and ICOBS disclosure requirements. An MGA cannot place business within Lloyd's or the London market.

Correct Answer:

An MGA holds delegated underwriting authority and claims handling powers from insurers, operating essentially as an underwriting agent.

Question 4

A corporate broker handles a portfolio generating £5,000,000 in gross written premium (GWP) at an average commission rate of 15%. If the client transitions to a fee agreement of £600,000 per year and the broker remits net premiums to insurers, what is the net revenue change for the broker?

Decrease of £150,000 Increase of £150,000 Increase of £60,000 No change in total revenue

Correct Answer:

Decrease of £150,000

Question 5

What is the primary risk associated with a broker relying heavily on contingent commissions (profit shares) from underwriting market partners?

Inability to hold statutory trust client money accounts. Potential conflict of interest between placement advice to clients and maximizing broker profit share. Automatic revocation of Lloyd's broker accreditation. Breach of UK Solvency II capital requirements for insurers.

Correct Answer:

Potential conflict of interest between placement advice to clients and maximizing broker profit share.

Question 1

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Prepare with the CII 930 Practice Questions - Advanced Insurance Broking (930) Exam practice quiz. This question bank includes 100 questions covering client, broker, insurance, commercial, and broking. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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CII 930 Practice Questions - Advanced Insurance Broking (930) Exam

This practice set contains 100 questions from the matching question bank and focuses on client, broker, insurance, commercial, and broking. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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CII 930 Practice Questions - Advanced Insurance Broking (930) Exam

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