Ch2: Regulations Flashcards
Who handles Federal Regulations
Office of the Superintendent of Financial Institutions
Describe the duties of the Office of the Superintendent of Financial Institutions
- to license insurance companies that operate in multiple provinces
- monitor and set strict financial standards to ensure stability
Who handles Provincial Regulations In B.C.
BC Superintendent of Financial Institutions
Describe the 4 responsibilities of the provincial regulator
- Regulate and approve insurance policy terms/wordings
- Licenses insurers, brokers, and adjusters
- Monitors financial stability of BC insurers
- Administers the Insurance Act
Define “Solvency”
ability to meet financial obligations
What stands for “PACICC?”
Property And Casualty Insurance Compensation Cooperation
What does PACICC do?
covers policyholders even when the insurer goes bankrupt
up to $250,000 per claim, refund premiums 70% or $700
Define “Fiduciary”
someone who handles other peoples money
What is a Brokers responsibility?
hold commissions in trust and return unearned commissions
What is a Insurers responsibility
return unearned premiums
What are the 6 Contents of a Insurance Policy
- Parties of a contract
- Loss Payable or Payee
- Policy Period starts at 12:01AM Standard Time @ address of name of insured
- Coverage and Amount of Insurance
- Subject Matter of Insurance
- Rates and Premiums
When does the policy period start?
12:01AM Standard Time @ address of name of insured
Define “Fire”
ignition that causes “destructive burning”
Define “Friendly Fire”
deliberate and contained for beneficial purposes (not insurable)
Define “Hostile Fire”
not contained & destructive affects (insurable)
What are the 4 Basic Fire Policy Coverages?
- Friendly Fire
- Hostile Fire
- Lightning
- Explosion of Coal, Natural or Manufactured Gas
Name the 5 Fire policy exclusions
- Application of heat
- Radioactive Contamination
- Other electrical currents
- Lightning damage to electrical devices
- Riot, Insurrection, Civil Commotion, War, Act of a Foreign Enemy or Military deliberate act of violence with a large loss
Define “Statutory Conditions”
rights and responsibilities of the parties - no changes
Name the 3 types of Misrepresentation
- False description of property
i.e. Making it look better than it is - Misrepresentation of a “Material Fact”
i.e. give a true account - Fraudulent omission of a “Material Fact”
i.e. applicant deliberately withholds material information
Define “Material Fact”
something that would change the insurers decision if known
Name the 8 requirements upon loss
- Notice of Loss
- Proof of Loss
- Inventory of Damaged Property
- How the Loss Occurred
- Location
- Other Insurance
- Interest of the Insured & Others
- Changes in Property
Who are the 3 people who can give notice for proof of loss?
- the insured
- the agent if justifiable
- those with insurable interest - even if insured refuses
Termination responsibilities of the Insured
must notify insurer (termination=immediate)
In Writing: to the provincial head office of insurer
Premium Refund = on short rate basis to cover admin costs
Termination responsibilities of the Insurer
In writing: to the last known address of the insured.
Registered Mail: 15 days’ notice
Hand Delivered: 5 days’ notice
Refund = Pro Rata & accompanies the notice
