Every answer and its explanation appears here once you have finished the path. Each one then links to the matching glossary entry, where the concept is set out in full with its worked example.
1. What does the indemnity principle require on an asset the state has just taken over, and why is it impracticable?
A value at the date of loss, that is, on the exact day access to the books, the site and the auditors was removed
The coincidence is cruel and it is the module's subject: the day the value must be established is precisely the day everything that would establish it becomes inaccessible. The other answers describe real valuation difficulties that exist elsewhere too, whereas this one is peculiar to political risk and dictates the solution, namely to constitute the value beforehand rather than prove it afterward.
Glossary entry →2. An agreed value makes settlement practicable. What does it cost, and what happens if the insured fails its side?
It is paid for by a periodic revaluation obligation, whose breach does not penalize: it drops you into the regime the insured cannot serve
The sanction is not a sanction, and that is what makes it formidable: missing a revaluation does not cost a percentage, it sends you back to the indemnity principle, that is, to the exercise the previous question just declared impracticable. You therefore lose the one thing that made settlement possible, with no line of the contract announcing a penalty. The other three answers look for a quantified sanction, which is the normal reflex before a contractual breach and exactly what leads to underestimating this one.
Glossary entry →3. The policy pays "the lesser of book value or the agreed amount". What does that mean?
That the stated figure is a cap and not a promise: book value will pay if it is lower
The formula is common and read quickly, so the agreed amount settles in people's minds as the sum insured when it is only its cap: on a depreciated asset, book value can be far lower, and it is what will pay. The answer making it a floor inverts the mechanism exactly, and it is the module's costliest error because it reassures. Believing the two figures converge assumes a depreciation policy aligned with economic value, which is almost never the case.
Glossary entry →4. Where must the valuation file be built and kept, and why?
Outside the country concerned, and before the taking: a value is constituted beforehand and cannot be proved afterward
The two halves hold together and both get neglected: constituting beforehand is useless if the file stays where it will become inaccessible, and taking it out is useless if it was never built. The answers leaving it at the local head office or with the auditor name the most natural places, and those are exactly the ones the taking closes. Lodging a copy with the insurer is useful and not sufficient: it is not a question of enforceability but of the documents physically existing.
Glossary entry →5. The module flags a correlation that makes everything worse. Which one?
The more specific the asset, the less its value can be established and the more exposed it is: difficulty of proof correlates with probability of loss
A bespoke refinery or a mining concession have no comparable, which makes their value hard to establish, and they are precisely the assets a state takes because they are strategic and immovable. The two difficulties therefore do not add up by chance, they meet in the same assets, and that is what justifies the documentary effort beforehand exactly where it costs most. The other answers describe real relationships with no mutual reinforcement.
Glossary entry →