RIBO

Question 1

Indepemnity

Answer 1

When the insured, up to the limit of the policy, is compensated for the ACV of what theyve lost

NO PROFIT, NO GAIN (for either party)

Question 2

Risk

Answer 2

Chance of loss; or an object or activity that is insured

Question 3

Peril

Answer 3

An event that may cause a loss to occur

Question 4

Object of Insurance

Answer 4

Item that is insured or covered in an insurance policy

Question 5

Indemnity

Answer 5

To put you back in the same financial position (prior to loss) NO BETTER/WORSE

Question 6

Insured Policy Holder

Answer 6

The person who purchases an insurance policy & who compensates a policy holder in the events of a loss

Question 7

Premium

Answer 7

Sum of money paid by the person to an insurance policy

Question 8

General Insurance

Answer 8

Anything other than health or life insurance

Question 9

RIBO Regulates what?

Answer 9

• Licencing
• Proffesional competence
• Ethical conduct
• Insurance - related financisl obligations of all independent general insurancr brokers in ON

Question 10

Property risk

Answer 10

Financial loss occurs when owned property is lost/damaged

Question 11

Liability risk

Answer 11

When a persons negligent actions result in injury to others/damaged to anothers property

Question 12

Negligence

Answer 12

What a readonable & prudence person would do or not do in a similar situation

Question 13

Speculative risk

Answer 13

Possibility of either financial loss/ gain (this is NOT insurable)

Question 14

Pure risk

Answer 14

Chance of financial loss with no chance of financial gain (this is INSURABLE)

Question 15

Hazards

Answer 15

Condition which may cause a peril to occur or make the loss more severe. There are 2 types: Physical hazard & Moral hazard

Question 16

Physical Hazard

Answer 16

Observablr condition relating to the object of insurance

Question 17

Moral Hazard

Answer 17

Subjective characteristics of an insured/applicant that increases the liklihokd of loss

Question 18

Proximate Cause

Answer 18

The immediate & effective cause of the loss

Question 19

Dealing with risk

Answer 19

1.) Emilimating risk: get rid of risk completely
2.) Controlling risk: taking measures to decrease the chance of loss (more practical, not enough)
3.) Retaining risk: Self insurance & deductible
4.) Transferring a portion or all of your risk to an insurer for a cost premium ($ premium)

Question 20

Reinsurance

Answer 20

Insurance for an insurance company

Question 21

Capacity

Answer 21

The amount of coverage that an insurer can reasonably assume

Question 22

Premium Capacity

Answer 22

Is the aggregate premium volume an insurer can safely write in a given accounting period

Question 23

5 Function of Insurance

Answer 23

*Spread of risk
*Eliminating worry, envouraging entrepreneurship
*Loss prevention & reductions
*Source if investment capital & employment

Question 24

Deductible

Answer 24

The amount of money a policy holder pays out og pocket to cover the first portion of a loss before insursncr begins to cover the balance

Question 25

Writing Insurance

Answer 25

The act of selling or issuing an insurance policy

Question 26

Type of insurance company

Answer 26

1.) Government insurers 2.) Private insurers - Stock insurance companu - mutual insurance company

Question 27

Which Provincial government operstes compulsary automobile insurance

Answer 27

British Columbia