Ch.3- Role of government in the insurance industry Flashcards
1
Q
Role of federal government
A
2
Q
Role of provincial governmetn
A
- supervising terms + conditions of insuance contracts
- licensing of insurers
- monitoring financial stability of provincially licenced insurers
3
Q
solvent
A
able to fulfill fnancial obligations
4
Q
PACICC
A
- Property And Casualty Insurance Compensation Corp
- if insurer goes bankrupt-> PACICC pays all VALID claims
- Max $250,000 on all claims from single occ.
- refund up to 70% unearned premiums
5
Q
Fiduciary
A
- a person who handles other ppls money
- i.e insurers, brokers
- comsumers expect premiums paid fwd to insurer + that they keep portion to pay claims
6
Q
Fiduciary responsibility of insurers
A
- premiums paid not fully earned till expiry of policy (held in trust)
- if only 1 mth of policy has passed, then only 1/12th earned, the rest is UNEARNED and held in trust
7
Q
Fiduciary responsibility of Brokers
A
- Commisions not fully earned until expiry of policy
- broker deducts commission from pmt to insurer
- keeps earned commission only
8
Q
Insurnace act
A
Legal rules governing operation of insurance industry
9
Q
Insurance contracts rules (7) List
A
- Contents of insurance policies legislated
- Removal coverage legislated
- Limitation of liability clauses- Usage legislated
- Right of subrogation legislated
- Waiver of term/condition
- Effect of delivery of policy
- Policies Insuring fie peril
- basic covergaes legislated
- standard exclusions legislated
- Statutory conditions
10
Q
- Contents of Insurance Policies legislated
A
- parties to the contract (insurer/insured)
- policy period (start/end date, effective time)
- Loss payable/Payee (if any)
- Types of insurance Coverages + amts
- rate premium charged (amount + method/rate)
- Sunjectb matter of insurnce (items insured, location of insured items)
11
Q
- Removal coverage legislated
A
?? insert pic ??- imnsured property can be removed to protect it???
- conditions applying to removal clause
- insurer extend coverage to a location NOT insured when property necessarily removed from locations to prevent loss/destruction/damage
- amt of ins left for any loss @unamed location is reduced by amt paid for loss at original location
- obligation of insurer to extend insurnace to property at unanmed location is oy for 7 days or expiration of polciy
12
Q
- Limitation of liability clauses
A
requires contract to be stamped/printed on its face in red ink:
“this policy contains a clause that may limit amount payable”
clauses cause amot for loss tp be less thaan what it was purchased for
13
Q
- Right of subrogation
A
- Subrogations: put yourself in anothers shoes
- any action taken aainst responsible party is taken in insured name
14
Q
- Waiver of term or condition
A
- interim changes to policy- only under signature of person authorized for that purpose by insurer (i.e broker -me)
15
Q
- Effect of delivery on policy
A
- once policy delivered, even if not paid for, its still binding to insurer
