Practice Questions

Question 1

Four common methods of dealing with risk are:
a. Eliminate, control, retain and transfer.
b. Security alarm, fire alarm, fire extinguisher, a safe.
c. Eliminate, gamble, control, transfer.
d. Re-insure, retain, sell, control.

Answer 1

a. Eliminate, control, retain and transfer.

Question 2

A form of insurance purchased by an insurance company to limit its losses is called:
a. Mortgage insurance
b. Investment bond
c. Underwriter insurance
d. Reinsurance

Answer 2

d. Reinsurance

Question 3

What is the definition of Insurance?
a. The undertaking by one person to protect themself against loss or liability for loss in respect of a certain risk or peril, which an insurance contract has listed as may be exposed, and for an insurance company to pay a sum of money or a range of equal value objects upon the happening of a certain event.
b. The undertaking by one person to indemnify another person against loss or liability for loss in respect of a certain risk or peril to which the object of insurance may be exposed, or to pay a sum of money or other thing of value upon the happening of a certain event.
c.The undertaking by an insurer to indemnify an individual person against loss or liability for loss in respect of a certain risk or peril to which the object of insurance may be exposed, or to pay a sum of money or other thing of value upon the happening of a certain event.

Answer 3

b. The undertaking by one person to indemnify another person against loss or liability for loss in respect of a certain risk or peril to which the object of insurance may be exposed, or to pay a sum of money or other thing of value upon the happening of a certain event.

Question 4

Which of the following is NOT a major function of insurance:
a. Spread of risk.
b. Eliminate worry.
c. Loss prevention and reduction.
d. Provide credit.

Answer 4

d. Provide credit.

Question 5

A physical hazard is:
a. A type of peril.
b. A physical characteristic of a risk which may give rise to a loss.
c. The same as a moral hazard.
d. The possibility of a loss due to the nature of the insured.

Answer 5

b. A physical characteristic of a risk which may give rise to a loss.

Question 6

A Managing General Agent (MGA) can be best defined as:
a. The Lloyd’s Corporation.
b. A brokerage office that has been granted authority by one or more insurance companies to transact business on their behalf.
c. An agent of a mutual insurance company that transacts business on behalf of policyholders.
d. A brokerage office that has been granted authority by one or more policyholders to transact business on their behalf.

Answer 6

b. A brokerage office that has been granted authority by one or more insurance companies to transact business on their behalf.

Question 7

Why might a broker need to seek coverage for a client from an MGA or Lloyd’s of London?
a. The client’s operation is considered too high risk for the average insurer.
b. The client refuses to provide information about their operation to the broker.
c. The claims department has declined to provide coverage.
d. The broker wants to charge a higher premium to earn more commission.

Answer 7

a. The client’s operation is considered too high risk for the average insurer.

Question 8

An underwriter performs many functions including:
a. Developing and managing broker contracts.
b. Analyzing application forms submitted by brokers to ensure eligibility.
c. Managing corporate investments.
d. Paying broker commission.

Answer 8

b. Analyzing application forms submitted by brokers to ensure eligibility.

Question 9

Which of the following best describes Lloyd’s of London?
a. A coffee shop.
b. A claims adjusting firm.
c. A well-known insurance company.
d. A marketplace where insurance buyers and sellers come together.

Answer 9

d. A marketplace where insurance buyers and sellers come together.

Question 10

A claims adjuster must:
a. Appoint brokers to sell insurance products.
b. Administer policyholder direct payment plans.
c. Develop and maintain broker portals.
d. Pay valid claims while ensuring the principle of indemnity is maintained.

Answer 10

d. Pay valid claims while ensuring the principle of indemnity is maintained.

Question 11

Which of the following is not one of the sections in a commercial insurance package policy?
a. Property Insured.
b. Business Income.
c. Crime
d. Personal Liability

RIBO Textbook Chapter 10 Review Quiz

Answer 11

d. Personal Liability

Question 12

Karen owns a commercial office building. All units are rented by business professionals. Which of the following property types is considered part of Karen’s building for insurance purposes?
a. Tenants’ stock.
b. Ornamental trees growing in the lobby of the building.
c. Office furniture.
d. Tenants’ liability

RIBO Textbook Chapter 10 Review Quiz

Answer 12

b. Ornamental trees growing in the lobby of the building.

Question 13

Which of the following property types is defined as “stock” under a retail store’s commercial insurance package policy?
a. Merchandise not yet sold.
b. Goods that have been sold but are still in the policyholder’s possession pending delivery
c. Materials used to manufacture goods.
d. All of the above.

RIBO Textbook Chapter 10 Review Quiz

Answer 13

d. All of the above.

Question 14

Which of the following forms is the most commonly used in today’s commercial package policies?
a. Fire, Lightning and Explosion Form.
b. Fire and Extended Coverage Form.
c. Habitational Form.
d. Broad form.

RIBO Textbook Chapter 10 Review Quiz

Answer 14

d. Broad form.

Question 15

Yuusuf operates a convenience store in a building he owns. Thieves broke the window and caused a great deal of damage inside. Repairs are expected to take three weeks. The claims adjuster advised Yuusuf to move his stock and equipment to a storage facility to protect it from further damage. Which commercial property extension pays for these costs?
a. Removal.
b. Debris Removal.
c. Building Damage by Theft.
d. Growing Plants, Trees, Shrubs Outside the Building.

RIBO Textbook Chapter 10 Review Quiz

Answer 15

a. Removal.

Question 16

Under a commercial property Broad Form, insured property is covered against:
a. All Perils.
b. Actual cash value.
c. Named perils.
d. Specified perils.

RIBO Textbook Chapter 10 Review Quiz

Answer 16

a. All Perils.

Question 17

The commercial property Broad Form wording excludes loss or damage for certain types of property. Which of the following types of property is not excluded under the Broad Form?
a. Cash, stamps or tickets.
b. Watercraft held for sale (and therefore considered to be stock).
c. Jewellery, watches, gems, and pearls valued up to the limit specified in the policy.
d. Property which has been confiscated by a public authority.

RIBO Textbook Chapter 10 Review Quiz

Answer 17

b. Watercraft held for sale (and therefore considered to be stock).

Question 18

The commercial property Broad Form excludes several perils or causes of loss. Which of the following excluded perils or losses may be added to a policy for an additional premium?
a. Earthquake insurance.
b. Wear and tear, rust, corrosion, or gradual deterioration.
c. Shortage of equipment or stock which has been discovered while conducting an inventory.
d. All of the above.

RIBO Textbook Chapter 10 Review Quiz

Answer 18

a. Earthquake insurance.

Question 19

Which of the following causes of loss are excluded from a commercial property Broad Form?
a. Backup or overflow of water from sewers, sumps, septic tanks, or drains.
b. Flood.
c. Damage caused by rodents, insects, or vermin.
d. All of the above.

RIBO Textbook Chapter 10 Review Quiz

Answer 19

d. All of the above.

Question 20

Moe’s business policy will indemnify him for the costs to repair or replace lost or damaged business property without deduction for depreciation. What is this basis of settlement called?
a. Actual cash value.
b. The limit of insurance.
c. Indemnification.
d. Replacement cost.

RIBO Textbook Chapter 10 Review Quiz

Answer 20

d. Replacement cost.

Question 21

Which of the following best describes a Comprehensive Tenant Policy?
a. It covers theft only.
b. It covers theft only, provided there are visible signs of breaking in.
c. It is the same as a Homeowner Policy, but it does not cover buildings or outbuildings.
d. It covers the insured’s building, summer cottage, and the contents of both.

RIBO Textbook Chapter 7 Review Quiz

Answer 21

c. It is the same as a Homeowner Policy, but it does not cover buildings or outbuildings.

Question 22

What is covered under a Condominium Unit Owner Policy?
a. The condominium building itself plus the unit owner’s contents.
b. Outbuildings.
c. The unit owner’s personal property (contents) and any unit improvements and betterments.
d. Other structrues separated by a clearly defined space.

RIBO Textbook Chapter 7 Review Quiz

Answer 22

c. The unit owner’s personal property (contents) and any unit improvements and betterments.

Question 23

An all-risks policy covers:
a. All kind of loss.
b. Fire, extended coverage, and earthquake.
c. Specified perils, including earthquake and sewer backup.
d. Any kind of loss, subject to exclusions.

RIBO Textbook Chapter 7 Review Quiz

Answer 23

d. Any kind of loss, subject to exclusions.

Question 24

Which of the following best describes the fire and extended coverage Secondary and Seasonal Residence Forms?
a. They are identitical.
b. The Secondary Residence Form covers more perils.
c. The Seasonal Residence Form covers more perils.
d. Both automatically include burglary coverage.

RIBO Textbook Chapter 7 Review Quiz

Answer 24

b. The Secondary Residence Form covers more perils.

Question 25

Which of the following losses are not covered under a Comprehensive Homeowner Policy? a. Collapse of the roof due to snow load at the seasonal dwelling. b. Additional expenses resulting from a temporary stay in a hotel following bad storm damage to the roof. c. Smoke damage to a light-coloured chesterfield following a kitchen fire. d. Damage caused by a tree falling into the swimming pool and destroying the liner. ## Footnote RIBO Textbook Chapter 7 Review Quiz

Answer 25

a. Collapse of the roof due to snow load at the seasonal dwelling.

Question 26

Under the Comprehensive Homeowner Policy, which of the following statements is correct? a. House guests' property are automatically covered for the perils of the policy. b. House guests' property can never be covered under the policy. c. Only the property of the named insured is covered under the policy. d. None of the above. ## Footnote RIBO Textbook Chapter 7 Review Quiz

Answer 26

d. None of the above.

Question 27

The Kumar family has rented the same seasonal dwelling for 20 years, for two months each year. They bring all their clothes, bedding, and supplies (worth $4,000). Unfortunately, a fire destroyed the building in the first week and all was lost. They have a $50,000 Comprehensive Tenant Policy, How much would this policy pay above the $500 deductible? a. Nothing. b. $1,800. c. $3,500. d. $4,000. ## Footnote RIBO Textbook Chapter 7 Review Quiz

Answer 27

c. $3,500.

Question 28

Shaun plans to renovate his bungalow, which means he has to vacate his home for six months. His coverage for additonal living expense will: a. Not provide any coverage. b. Provide coverage for a maximum of two weeks. c. Pay all the extra expense incurred during the six-month period. d. Provide coverage only is a loss occurs in those six months. ## Footnote RIBO Textbook Chapter 7 Review Quiz

Answer 28

a. Not provide any coverage.

Question 29

Jelena is selling her house and moving to a low-rise condominium. She asks you, her broker, what she should do with her current Homeowner Policy. What would you advise her to do? a. Endorse the current policy to the new address, but delete the building and liability coverage because they will be covered under the master policy of the condominium. b. All the building coverages for the new condoominium are covered by the master policy, so she needs a Tenant Policy in her name. c. Make no change, as the Homeowner Policy is just as good as the Condominium Unit Owner Policy. She just need to change the address. d. The Homeownner Policy must be replaced by the Condominium Unit Owner Policy, which gives certain extra coverages she will need as a unit owner. ## Footnote RIBO Textbook Chapter 7 Review Quiz

Answer 29

d. The Homeownner Policy must be replaced by the Condominium Unit Owner Policy, which gives certain extra coverages she will need as a unit owner.

Question 30

Is loss or damage caused by an earthquake insurable? a. Yes - it is one of the insured perils usually covered in a property insurance policy. b. No - it is not available under a property policy. c. No - being an "act of god," it is never insurable. d. Yes - it can be added to a property policy for an additional premium. ## Footnote RIBO Textbook Chapter 7 Review Quiz

Answer 30

d. Yes - it can be added to a property policy for an additional premium.

Question 31

Which of the following losses or damages would NOT be covered by the Comprehensive Homeowner's wording? a. Damage caused by accidental escape of water from a water main. b. Damage caused by freezing during the usual heating season if the insured is away for more than four consecutive days and a competent person is daily entering the building. c. Ground water or rising of the water table or surface water. d. Accidental discharge of an automatic sprinkler with the insured dwelling.

Answer 31

c. Ground water or rising of the water table or surface water.

Question 32

When an insured purchases ____ coverage, one does not need to purchase burglary or robbery coverage on the same property. a. Door lock replacement. b. Pet life insurance. c. Home security system. d. Theft.

Answer 32

d. Theft.

Question 33

Under a Condominium Owner’s Comprehensive form, loss assessment coverage pays: a. For the damage to the unit caused by any Named Peril. b. Only when there is a policy in place with the Condominium Corporation. c. Any amounts assessed to the condominium unit owner for damage to common areas of the Condo due to lack of insurance or under-insurance on the part of the Condominium Corp. d. The limit shown on the Declaration page for this coverage or $50,000.

Answer 33

c. Any amounts assessed to the condominium unit owner for damage to common areas of the Condo due to lack of insurance or under-insurance on the part of the Condominium Corp.

Question 34

The basis of settlement for most claims using the Comprehensive Homeowner's wording is ______, unless otherwise stated. a. as listed in the declarations b. replacement value c. cash value less depreciation d. actual cash value

Answer 34

d. actual cash value

Question 35

Homeowners who run home businesses and already have insurance under the Comprehensive Homeowner's wording can select additional coverage that meets their insurance needs by obtaining ____. a. Theft, personal liability and automobile. b. Home business extension endorsement. c. Window, door and glass coverage. d. Double fire protection, personal liability and extended property protection.

Answer 35

b. Home business extension endorsement.

Question 36

What are the factors analyzing a risk? ## Footnote Section 10.3.6 Page 358

Answer 36

1. Construction 2. Occupancy 3. Protection 4. Location 5. Claims History

Question 37

What are the parts to the insuring agreement? ## Footnote Section 8.5

Answer 37

1. Pay all sums legally obligated to pay *(Subject to policy limits)* 2. To Third Parties 3. For Compensatory Damages 4. For Bodily Injury & Property Damage 5. During the Policy Period 6. Caused by an Occurence 7. Within the Coverage Territotry

Question 38

What are the types of compensation? ## Footnote Section 8.5

Answer 38

1. General Damages 2. Special Damages 3. Nominal Punitive or exemplary damages are **not** covered.

Question 39

Your client calls you that while hosting a birthday party at their home, someone fell through the back deck and broke their ankle. They are worried, as now that person has been off work for more than a week and the company they work for is threatening them with a lawsuit. They are not sure if their policy could help cover them if they are taken to court. Would a claim like this be covered and if so, under what Coverage? a. No. this is due to poor maintenance of the property, and they would not be covered. b. Yes, they would be covered under Coverage F: Voluntary Medical Payments c. Yes. they would be covered under Coverage E: Personal Liability

Answer 39

c. Yes. they would be covered under Coverage E: Personal Liability

Question 40

Your client emails you that over the weekend their 11-year-old child got a hold of their motorized lawnmower and drove it into their neighbour's garage door. The neighbour was furious because the costs to repair it could be as high as $800. Your client was afraid their policy won't cover damage to another person's property. Would a claim like this be covered and if so, under what Coverage? a. Yes, the whole amount will be covered under Coverage G. b. No, there is no coverage available for the acts of a child to another person's property. c. Yes, there is coverage under Coverage G, but only up to $1,000.

Answer 40

c. Yes, there is coverage under Coverage G, but only up to $1,000.

Question 41

All of the following are exclusion under your Homeowner’s Liability section except: a. The rendering or failure to render any professional service. b. Liability imposed by any workers compensation statute. c. Business pursuits or business use of your premises except as otherwise specified in this policy. d. The ownership, use, or operation of a motorized vehicle, trailer, or watercraft.

Answer 41

d. The ownership, use, or operation of a motorized vehicle, trailer, or watercraft.

Question 42

Complete this statement by selecting the correct term from the options below. When joint tortfeasors are responsible for damages but the liability is being disputed, each of the tortfeasors is held liable for an amount of ______. This encourages liable joint tortfeasors to settle the dispute themselves or split the damages evenly: it also encourages shorter settlement periods. a. The total loss or damages. b. Half the total damages. c. 10% until the claim is settled. d. Nothing

Answer 42

a. The total loss or damages.

Question 43

Your 10 year old daughter intentionally throws rocks through 5 of your neighbour's windows causing $2000 in damage. You are later sued for these damages. This would be covered under: a. Legal liability - personal liability of your Homeowner’s policy. b. Voluntary property damage of your Homeowner’s policy. c. Tenants legal liability coverage of your Homeowner’s policy. d. None of the above.

Answer 43

a. Legal liability - personal liability of your Homeowner’s policy.

Question 44

6. Select the correct individual from the options below to complete this statement. A _____ is one who comes onto the premises of the occupier or owner of a property for his or her own purposes, but with the occupier’s consent, such as a postal worker, social guest, or meter reader. a. Bailee. b. Visitor or invitee. c. Trespasser or burglar. d. Uninvited visitor.

Answer 44

b. Visitor or invitee.

Question 45

An Umbrella policy: a. Is not usually subject to a deductible or SIR. b. May contain very specific territory limitations. c. Provides excess insurance over another policy. d. Does not require an application.

Answer 45

c. Provides excess insurance over another policy.

Question 46

RIBO regulates the: a. Licensing and professional competence of underwriters. b. Licensing and professional competence of insurance brokers across Canada. c. Licensing and professional competence of insurance brokers in Ontario. d. Licensing and professional competence of policyholders. ## Footnote Chapter 1 Review Quiz

Answer 46

c. Licensing and professional competence of insurance brokers in Ontario.

Question 47

Which of the following is not a speculative risk? a. Gambling b. A home that has been damaged by a windstorm. c. Starting a new business. d. A faulty furnace. ## Footnote Chapter 1 Review Quiz

Answer 47

b. A home that has been damaged by a windstorm.

Question 48

An old building is in poor condition. The older electrical wiring caused a small fire last year. This is an example of: a. Speculative risk. b. Moral hazard. c. Pure risk. d. Physical hazard. ## Footnote Chapter 1 Review Quiz

Answer 48

d. Physical hazard.

Question 49

Which of the following statement is not correct? a. With pure risk, there is a chance of loss but no chance of profit or financial gain. b. With speculative risk, there is the possibility of either financial loss or financial gain. c. With pure risk, there is a chance of either financial loss and/or financial gain. d. Insurance is based on pure risk. ## Footnote Chapter 1 Review Quiz

Answer 49

c. With pure risk, there is a chance of either financial loss and/or financial gain.

Question 50

Which of the following is an example of personal risk? a. The cost of reparing or replacing damaged property. b. The loss of one's health or life. c. The loss of business income resulting from a fire at the business. d. Being held financially responsible for one's negligent actions. ## Footnote Chapter 1 Review Quiz

Answer 50

b. The loss of one's health or life.

Question 51

Which of the following is correct? a. A peril is an event which may cause a loss to occur. b. A hazard can cause a loss to be less severe. c. A business that makes heavy machinery is an example of a physical hazard. d. Moral hazards are easier to detect and correct than physical hazards. ## Footnote Chapter 1 Review Quiz

Answer 51

a. A peril is an event which may cause a loss to occur.

Question 52

A physical hazard is: a. A type of peril. b. The same as a moral hazard. c. A physical characteristic of a risk that may give rise to a loss. d. The possibility of loss due to the nature of the insured. ## Footnote Chapter 1 Review Quiz

Answer 52

c. A physical characteristic of a risk that may give rise to a loss.

Question 53

The item that is insured or covered by an insurance policy is called: a. The object of insurance. b. The policy. c. The peril. d. The hazard. ## Footnote Chapter 1 Review Quiz

Answer 53

a. The object of insurance.

Question 54

In general, when an insurance company indemnifies an insured, it tries to: a. Put the insured back into the same financial position they were in when they purchased the policy. b. Put the insured back into the same financial position they were in when the loss is finally settled with the insurance company. c. Better the financial position of the insured. d. Put the insured back into the same financial position they were in at the time the loss occurred.

Answer 54

d. Put the insured back into the same financial position they were in at the time the loss occurred.

Question 55

What is the role of Registered Insurance Brokers of Ontario (RIBO)? ## Footnote Chapter 1

Question 56

What are the methods of dealing with risk? ## Footnote Chapter 1

Answer 56

1. Eliminate 2. Control - decrease chance of loss 3. Retain - self-insure 4. Transfer - buy insurance

Question 57

What are the five functions of insurance? ## Footnote Chapter 1

Answer 57

1. Spread of Risk 2. Basis of Credit System - protects investments of lenders 3. Eliminating Worry, Encouraging Entrepreneurship - reduces anxiety of future losses when engaging in business ventures 4. Loss Prevention and Reduction - works with community and public officials to deal with issues 5. Source of Investment Capital and Employment

Question 58

How can the public purchase insurance in Canada? ## Footnote Chapter 2

Answer 58

Through government and/or private insurers.

Question 59

What is the difference between agencies and brokerages? ## Footnote Chapter 2

Answer 59

**Agency** primarily represents interests of the **insurance** **company** in an insurance transaction. **Brokerage** primarily represents the interests of the **policyholder** in an insurance transaction. **Agency** - independently owned by 1 or 2 agents and sells for a single sponsoring insurance company. They own their own portfolio of business, commissions are used to pay office expenses. **Brokerage** - independently owned businesses partnered and sells for two or more insurance companies. They own the business it produces, commissions are used to pay operating expenses, including salaries and/or commissions to its employees. Commission is paid by the insurers through their broker agreement.

Question 60

Who can write insurance? ## Footnote Chapter 2

Answer 60

Direct writers or intermediaries.

Question 61

What are the departments of an insurance company? ## Footnote Chapter 2

Answer 61

* Business Development * Underwriting * Finance * Claims * Information Technology

Question 62

An insurance company that sells insurance products directly to customers is: a. A director. b. An intermediary. c. A direct writer. d. An agency. ## Footnote Chapter 2 Review Quiz

Answer 62

c. A direct writer.

Question 63

An intermediary is a person or organization who: a. Acts as a mediator or link between two parties. b. Works at a bank. c. Is an employee at Lloyd's of London. d. Works for the government. ## Footnote Chapter 2 Review Quiz

Answer 63

a. Acts as a mediator or link between two parties.

Question 64

Which of the following best describes an insurance broker? a. Someone who is authorized to sell the products of one insurance company. b. Someone who primarily represents the interests of the insurance company in an insurance transaction. c. Someone who is an independent business. d. Someone who primarily represents the interests of the client in an insurance transaction. ## Footnote Chapter 2 Review Quiz

Answer 64

d. Someone who primarily represents the interests of the client in an insurance transaction.

Question 65

Which of the following statements is not correct? a. A brokerage owns the business it produces. b. An insurance brokerage employs agents to sell and service clients. c. A brokerage is responsible for providing services to its clients. d. A brokerage is independently owned business. ## Footnote Chapter 2 Review Quiz

Answer 65

b. An insurance brokerage employs agents to sell and service clients.

Question 66

In an insurance transaction, insurance brokers primarily represent the interests of: a. The underwriter. b. The client. c. The insurer. d. Other brokers. ## Footnote Chapter 2 Review Quiz

Answer 66

b. An insurance brokerage employs agents to sell and service clients.

Question 67

In Canada, there are two types of insurers. They are: a. Government and private. b. Private and direct. c. Lloyd's and the government. d. Stock and mutual. ## Footnote Chapter 2 Review Quiz

Answer 67

a. Government and private.

Question 68

Which of the following types of insurance is not sold by the Government of Ontario? a. Automobile. b. Health. c. Workers' compensation. d. Employment. ## Footnote Chapter 2 Review Quiz

Answer 68

a. Automobile.

Question 69

A stock insurance company is owned by: a. The government b. Policyholders. c. Shareholders d. The stock exchange. ## Footnote Chapter 2 Review Quiz

Answer 69

c. Shareholders

Question 70

A mutual insurance company is owned by: a. The government b. Policyholders. c. Shareholders. d. Employees. ## Footnote Chapter 2 Review Quiz

Answer 70

b. Policyholders.

Question 71

What is one of the primary goals of a mutual insurance company? a. To make profit for its shareholders. b. To operate on a national basis. c. To collect sufficient premiums to cover the costs of paying claims and operating the company. d. To return excess premiums to its policyholders every year. ## Footnote Chapter 2 Review Quiz

Answer 71

c. To collect sufficient premiums to cover the costs of paying claims and operating the company.

Question 72

What are the elements of a legal contract? ## Footnote Chapter 3

Answer 72

1. Agreement = offer>unconditional acceptance>issued policy *oral and written agreements are legally binding* 2. Consideration = exchange of value (e.g. payment of premium) 3. Legality of object 4. Legal capacity of the parties to the contract 5. Genuine intention - *not affected by fraud, duress, concealment or mistake (signed in error or mistake*

Question 73

What are the elements specific to an insurance contract?

Answer 73

1. Insurable Interest 2. Utmost Good Faith 3. Indemnity ## Footnote Examples of parties who demonstrate insurable interest are owners of property, mortgage holders, bailees to whom property is entrusted for repair, service or safekeeping, any person or entity who may be legally liable to a third party for injury or damage.

Question 74

What are the levels of insurance regulation in Canada? Which type of government supervises and regulates each level? ## Footnote Chapter 3

Answer 74

1. Federal - Solvency - OFSI 2. Provincial: * Solvency - FSRA * Fair practices - FSRA * Insurer licensing - FSRA * Broker licensing - RIBO

Question 75

Government regulation of insurance companies is essential for: a. The protection of Canadian insurance companies. b. The protection of insurance brokers. c. The protection of the government. d. The protection of Canadian Insurance consumers. ## Footnote Chapter 3 Review Quiz

Answer 75

d. The protection of Canadian Insurance consumers.

Question 76

Which of the following best describes a fiduciary? a. Someone who handles other people's money. b. Someone who sells insurance. c. Someone who adjusts insurance claims. d. Someone who acts as a notary public. ## Footnote Chapter 3 Review Quiz

Answer 76

a. Someone who handles other people's money.

Question 77

What is the main role of the Office of the Superintendent of Financial Institutions (OFSI)? a. To regulate insurers operating in Ontario. b. To enforce the Compulsory Automobile Insurance Act. c. To review and monitor the financial soundness of all federally licensed insurers. d. To remain solvent. ## Footnote Chapter 3 Review Quiz

Answer 77

c. To review and monitor the financial soundness of all federally licensed insurers.

Question 78

What is the name of the organization responsible for licensing of both life and general insurance agents in Ontario? a. The Office of the Superintendent of Financial Institutions (OFSI). b. The Property and Casualty Insurance Compensation Corporation (PACCIC). c. The Financial Services Regulatory Authority of Ontario (FSRA). d. The Registered Insurance Brokers of Ontario (RIBO). ## Footnote Chapter 3 Review Quiz

Answer 78

c. The Financial Services Regulatory Authority of Ontario (FSRA).

Question 79

All contracts must include five essential elements to be enforceable by law, They are: a. Agreement, conservation, legality of contract, legal capacity, genuine intention. b. Agreement, consideration, legality, capacity, genuine intention. c. Agreement, consideration, legality of object, legal capacity, genuine intention. d. Disagreement, consideration, legality of object, legal capacity, genuine intention. ## Footnote Chapter 3 Review Quiz

Answer 79

c. Agreement, consideration, legality of object, legal capacity, genuine intention.

Question 80

In a legally enforceable contract, the element of agreement comprises both offer and acceptance. Which of the following is an example of an offer? a. The offer by the insurance adjuster to settle the claim. b. The insurance company's desire to sell an insurance policy. c. A completed application for insurance submitted to the insurer. d. The underwriter's agreement to negotiate terms and premium. ## Footnote Chapter 3 Review Quiz

Answer 80

c. A completed application for insurance submitted to the insurer.

Question 81

Which of the following statements is incorrect? a. An oral agreement is legally binding on the parties to the contract. b. An oral agreement is not legally binding on the parties to the contract. c. To avoid misunderstandings, it is common practice for contracts to be written. d. A written agreement is legally binding on the parties to the contract. ## Footnote Chapter 3 Review Quiz

Answer 81

b. An oral agreement is not legally binding on the parties to the contract.

Question 82

What is the legal purpose of consideration in any valid contract? a. It allows the intermediary to earn a commission. b. It demonstrates the legality of object. c. It shows acceptance of the offer. d. It is evidence the two parties to the contract intend to be bound by the contract. ## Footnote Chapter 3 Review Quiz

Answer 82

d. It is evidence the two parties to the contract intend to be bound by the contract.

Question 83

Maria was a bit short of funds on the date she purchased an automobile insurance policy. She promised to pay the premium within 30 days. Which of the following statements is correct? a. The broker cannot legally accept such an arrangement. b. The policy is valid because

Answer 83

b. The policy is valid because

Question 84

Pardeep Singh owns Singh's Appliances Ltd. The named insured on the insurance policy must be shown as: a. Pardeep Singh doing business as Singh's Appliances. b. Singh's Appliances Ltd. c. Pardeep Singh. d. Singh's Appliances operated by Pardeep Singh. ## Footnote Chapter 3 Review Quiz

Answer 84

b. Singh's Appliances Ltd.

Question 85

What is covered under Coverage A - Dwelling Building? ## Footnote Chapter 7

Answer 85

* The dwelling and **attached** structures * Outdoor equipment **permanently installed** **on the premises** * Outdoor domestic water containers including swimming poos, hot tubs, saunas and **attached** equipment **on the premises** * Materials and supplies** located on or adjacent to the premises** intended for use in construction **alteration and repair** of your dwelling or additional building/structures **on the premises.***Theft is covered only when the dwelling is completed and ready to be occupied* Specified items below are only insured for loss caused by fire, lightning, explosion, impact by aircraft or land vehicles, riot vandalism, or malicious acts and theft including damage caused by theft: * Building fixtures and fittings - **temporary removal from premises for repair or seasonal storage.** * Outdoor trees, shrubs, plants and lawns**on premises** - 5% on Coverage A on coverage summary page, no more than $500 for one tree, plant or shrub including debris removal ***Not insured: cannabis plants or items grown for commercial purposes.