Chapter 3 Flashcards
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.
D
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
A
What is the main role of the Office of the Superintendent of Financial institutions (OSFI)?
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.
C
What is the main role of the organization responsible for licensing of both life and general insurance agents in Ontario?
a) The office of the Superintendent of Financial Institutions(OSFI).
b) The Property and Casualty Insurance Compensation Corporation (PACICC)
c) The financial Services Regulatory Authority of Ontario(FSRA)
d) The Registered Insurance Brokers of Ontario (RIBO).
C
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.
C
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 premiums.
C
Which of the following 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.
B
What is the legal purpose of consideration in any valid contract?
a) It allows the intermediary to earn 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.
D
Maria was a bit short of funds on the date she purchased an automobile policy. She promised to pay the premium within 30 days. Which of the following statements is correct?
a) The broker cannot legally accept such arrangement.
b) The policy is valid because Maria has an intent ti pay the premium.
c) Maria must pay the premium in full on the policy start date or the policy is void.
d) The element of consideration has not been satisfied.
B
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
B
