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C11 > Big C11 Cards > Flashcards

Big C11 Cards Flashcards

Midterm + Multiple choice questions

1
Q

Which type of risk can be insured?

A

Pure risk

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2
Q

Antoine opens up a new barber shop on a busy downtown street and expects to earn a big profit. What is this an example of?

A

Speculative risk

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3
Q

What is a peril?

A

Event that will give rise to a loss

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4
Q

What is an example of a proximate cause of loss?

A

Clare has a building and it collapses after being damaged and weakened by a raging fire in another building. Although the building collapsed, the fire next door directly precipitated the collapse and qualifies as the proximate cause of the loss

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5
Q

What is both a pre-loss and a post-loss objective of risk management?

A

Social responsibility

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6
Q

What is a simple definition of earnings?

A

Difference between revenues and expenses: the profits (net income) of a business

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7
Q

All costs associated with managing pure risk are known as what?

A

Cost of risk

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8
Q

What is an example of an organization practising social responsibility after a loss?

A

Deciding to maintain as many employees on the payroll as possible despite a major loss affecting a building and equipment

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9
Q

What method is commonly used to identify exposure?

A

Survey

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10
Q

What is an example of a peril?

A

Explosion resulting in fire

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11
Q

Insurance is based on the existence of:

A

Risk

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12
Q

What are the duties of a risk manager

A

Identifying loss exposures to prevent and reduce losses

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13
Q

Examples of loss prevention activities include which of the following?

A
  • Installing anti theft protection devices on a vehicle
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14
Q

Which is the act enacted by the canadian gov that deals with fed licensing and supervision of insurance companies and solvency standards for insurers

A

The insurance companies act

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15
Q

What is at the heart of all gov reg

A
  • To protect consumers
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16
Q

The highway traffic act deals with all of the following except 1

A
  • Basic contents of a policy
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17
Q

Which of the following is an example of physical hazard

A
  • Basic electrical wires
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18
Q

Telematics is one of the insurance initiative that

A
  • Analyzes the exposure a client needs to manage and provide a plan of action manage the risk
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19
Q

The role of insurance intermediary is to

A
  • Bring the client and the insurer in to a contractual relationship by arranging insurance
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20
Q

Which of the following is a non-profit org, funded by the insurance industry that responds to the claims of the policyholders when an insurer becomes insolvent

A
  • Property and casualty insurance compensation corporation
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21
Q

The operation of an automobile at the legal speed limit is an example for

A
  • A contract enforceable at law without agreement
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22
Q

A contract that is considered as never made or existed and which cannot stand up in court is termed as

A
  • Void contract
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23
Q

Richard renovated the basement of his detached home….

A
  • Material fact
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24
Q

What is the function of aid to credit

A
  • Granters of credit like mortgage…
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25
Q

Which of the follow statement is true about the deductible in a policy

A
  • Specifies the amount the insured must pay….
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26
Q

Silence where there is an obligation to speak is known as which of the following

A
  • Concealment
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27
Q

Whose rights do statutory conditions in a property policy protect?

A
  • Both the insured’s and the insurer’s rights
28
Q

On the insurance application, suzzane….

A
  • Misrepresentation
29
Q

Standard of honesty greater than that usually required in most non-insurance contracts is known as which of the following

A
  • Utmost good faith
30
Q

Which of the following has the legal capacity to contract

A
  • 20 yr old male buying a car
31
Q

Who is the first party of an insurance contract

A
32
Q

If a loss occurs under an insurance binder and before the policy has been issued, how will the insurer respond?

A
  • Pay the claim in accordance….
33
Q

Which of the following elements is unique to insurance contracts

A
  • Utmost good faith
34
Q

Federal insurance regulators have many priorities, which (1) of the following is the most significant of all?

A
  • The financial stability and solvency of licensed insurance companies
35
Q

In arranging a contract of insurance, an agent or broker is always required to do which of the following?

A
  • Disclose all relevant material facts to the insurer
36
Q

Which of the following is not a definition of “certificate of insurance”

A
  • It does not certify the existence of insurance
37
Q

Actual cash value is

A
  • Replacement value less any accumulated depreciation
38
Q

A document, issued by the superintendent of financial institutions, giving a company approval to carry on the business of insurance.

A
  • Order of commencement
39
Q

Remote cause is best defined as:

A
  • A cause that is not proximate cause of loss and is separated from the proximate cause in a chain of events leading to a loss
40
Q

Which of the following is an example of an indirect loss?

A
  • Loss of rental income…
41
Q

Which of the following situation is an example of insurable interest in property

A
  • A homeowner whose personal property…
42
Q

Which of the following describes the principle of indemnity

A
  • To put back into the same financial position…
43
Q

Which type of adjusters are independent…

A
44
Q

Which of the following concepts upholds the principle of indemnity

A
  • Insurable interest
45
Q

When an insured property is not totally destroyed or lost and the property that remains has some value, what is this known as?

A
  • Salvage
46
Q

Which of the following best defines non-disclosure or concealment?

A
  • An applicant for insurance withholds information pertinent to a risk
47
Q

Which of the following is not included in the duties of a risk manager

A
  • Acting as an in house legal counsel
48
Q

The risk management process is used to ;

A
  • Determine the exposures clients need to manage
49
Q

What are the types of insurance that make up general insurance

A
  • Property insurance and casualty insurance
50
Q

Which part of an insurance policy states the perils insured against?

A
  • Insuring agreements
51
Q

What kind of offer is needed in order to establish a legally binding contract?

A
  • the offer must be made and accepted
52
Q

Which of the following statements is true for a sub policy

A
  • The policy documents must be signed by the member of each participating insurer
53
Q

What can be a consequence of the applicant misrepresenting material facts on the application for insurance?

A
  • The loss could be denied or the insurance policy could be voided or canceled
54
Q

Personal lines insurance may be written on a replacement cost basis which is:

A
  • Replacement or repair of the damaged property as it cost at the time of the loss with property of like kind and quality, without a deduction for depreciation.
55
Q

What must an insurer do if the insured cancels a policy mid-term

A
  • Return the unearned portion of the insured’s premium
56
Q

Which of the following is fundamental to the principle of utmost good faith?

A
  • Duty of disclosure
57
Q

Which statement best describes the mechanism of insurance?

A
  • A large group of individuals contribute to a pool of funds to reimburse a member for a loss caused by some specific happening
58
Q

Define the term peril

A
  • An event that will give rise to a loss
59
Q

What is the proximate cause of loss?

A

The immediate and effective cause of the loss

60
Q

A tenant negligently caused a fire…

A
  • Liability risk
61
Q

Which of the following is an example of a professionals not employed by the insurance industry

A
  • Sportsmen
62
Q

Which of the following is an example of a document that fulfills the promise of coverage in an insurance contract?

A
  • Certificate of insurance
63
Q

A contract in which one party agrees to indemnify another party is

A
  • An insurance contract
64
Q

WHat is the correct process for terminating temporary insurance

A
  • Exactly the same way as a policy
65
Q

What is the term used for the person or firm requesting insurance

A
  • Applicant
66
Q

What is the claims department within an insurance company organized to do?

A
  • Deliver the promise made to the consumer when the insurance policy was sold.

C11 (9 decks)

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