Auto Chapter 10

Question 1

Residual markets

Answer 1

special programs to ensure insurance availability for less desirable risks

Question 2

Examples of risks that might have to obtain insurance through residual markets

Answer 2

multiple claims or convictions, licence suspensions, cancelled for underwriting reasons, etc.

Question 3

2 objectives/terms of residual market programs

Answer 3

Facility Association / Echelon

Question 4

Facility Association

Answer 4

created in 1977. provides insured to obtain insurance through the voluntary market, (market pool of all insurers)

Question 5

Where does Facility Association operates?

Answer 5

AB NB NFLD NWT NT NS ON PEI YK

Question 6

Define “car year”

Answer 6

measurement of insurer’s exposure, and auto insured for 12 months is one year.

Question 7

Servicing carriers verses non servicing carriers

Answer 7

in facility association, the servicing carrier takes part in the day to day business submitted with policyholder service. non servicing carrier are still members but they have no direction involvement with its operation.

Question 8

Risk Sharing pool

Answer 8

pooling exposures that present higher than average risk.

Question 9

what are ON’s three markets called

Answer 9

regular, echelon, and facility association

Question 10

what are special and regular accounts

Answer 10

special account is for the facility association only