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Which statement best explains Utmost good faith?

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Question ID #26074 UPSC UPSC EPFO APFC 2026 Mock Test Series UPSC EPFO APFC Insurance Sectional Test 2026 Medium

Which statement best explains Utmost good faith?

Correct Answer: B. Duty of parties to disclose material facts relevant to insurance contract
Utmost good faith: Duty of parties to disclose material facts relevant to insurance contract

Question: Which statement best explains Utmost good faith?

A. Risk-transfer arrangement under which an insurer provides financial protection in return for premium

B. Duty of parties to disclose material facts relevant to insurance contract

C. Change in behavior or risk arising because protection from loss exists

D. Insurer's right, after paying a loss, to pursue recovery from a responsible third party

Correct Answer: B. Duty of parties to disclose material facts relevant to insurance contractUtmost good faith: Duty of parties to disclose material facts relevant to insurance contract

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Which statement best explains Utmost good faith? - MCQ Explanation

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Correct answer: B. Duty of parties to disclose material facts relevant to insurance contract