Baer

Question 1

Name IBC’s 5 objectives (formed in 1964)
[SPEC-D]

Answer 1

Study legislation
Collect / analyze actuarial and statistical data
Engage in mkt research
Discuss general insurance
Promote public understanding & awarness

Question 2

Name 3 organisations under the IBC umbrella

Answer 2

Association of Independent Insurers
Canadian Federation of Insurance Agents & Brokers
Insurance Institute of Canada

Question 3

What has been the focus of Canadian Insurance Regulation since Confederation?
[MOTHS]

Answer 3

Marketing: marketing integrity & improvement of insurance contract

Ownership: encourage canadian ownership

Taxes: tax revenue

Honesty: honesty & compentence of intermediaries (ex: agents)

Solvency: keep insurer’s solvent to protect policyholders

Question 4

Identify examples of Canadian regulation/legislation (federal or provincial) that promote insurer solvency (6)
[CIRCA-F]

Answer 4

Creation: oversee creation of (domestic) & licensing (foreign) of insurers

Investments: restrictions on the type of investments that are permitted for insurers (to reduce risk)

Rating: authorization of rating bureaus for info-sharing

Compliance: give government departments authority to enforce compliance with legislation

Adequacy: create boards to oversee and ensure adequacy of rates

File F/S: require regular filing of Financial Statements

Question 5

What conditions eventually led to public control regarding solvency in the 1870s?

Answer 5

• Many insurer bankruptcies in the 1860s/70s
• The recognition that short-term price competition is bad (exempt from anti-trust)
• Insurance involves a significant savings component (prepaid premiums) & policyholders must be protected