Government and Insurance Industry Regulations

Question 1

What is the name of the Federal Regulator for Insurance and what do they do?

Answer 1

The Office of the Superintendent of Financial Institutions. OSFI
1. License insurers
2.Monitor and set Financial Standards to ensure the stability of the insurance industry in Canada

Question 2

What is the name of the Provincial Regulator for Insurance and what do they do?

Answer 2

BC Superintendent of Financial Regulations
1. Regulate and approved insurance policy terms and wordings
2. licence insurers that operate in their province
3. Monitor the Financial Security of insurers in the province
4. Administers the Insurance Act for their province

Question 3

What does the term “monitoring solvency” mean?

Answer 3

Solvency is the ability to meet financial obligations. An insurance company must have enough money to meet financial obligations.

Question 4

What is PACICC

Answer 4

The Property and Casualty Insurance Compensation Corporation

Question 5

What is the role of PACICC

Answer 5

They cover the policy holder even when the insurance company goes bankrupt

Question 6

What is the maximum that PACICC will give you per claim

Answer 6

$250,000

Question 7

What is the maximum refund you can get for premiums under PACICC if your insurance agent goes bankrupt?

Answer 7

PACICC will refund 70% of premiums up to an amount of $700

Question 8

What is a fiduciary?

Answer 8

A fiduciary is someone who handles other peoples money

Question 9

What is the fiduciary responsibility of a Broker?

Answer 9

1. Hold commissions in trust
2. Return any unearned commissions if the policy should be cancelled part way

Question 10

What is the responsibility of the insurer?

Answer 10

To return any un earned premiums “pro rata”. Money to be held in trust in case the policy is cancelled.

Question 11

What is pro rata?

Answer 11

Pro rata means proportional-distributed in equal portions.

Question 12

What is the Insurance Act?

Answer 12

The Insurance Act varies from Province to Province and is administered by the “Superintendents of Insurance” Lays out rules and regulations to be applied to insurance.

Question 13

As per the Insurance Act what 6 things must appear on the declarations page?

Answer 13

1. Parties to the contract (Insurer and Insured)
2. Loss payable or payee: all parties with insurable interest
3. Policy Period start time: usually 1201 am standard time at the address named of the “named insured”
4. Coverage and amount of insurance
5. Subject matter of insurance: property insured and location
6. Rates and premiums=cost of insurance

Question 14

What is basic fire policy coverage and what does it cover?

Answer 14

it covers “hostile Fire” which is a fire that is not contained that creates destructive burning

Question 15

What are two additional Perils that are covered under the basic fire policy

Answer 15

1. Lightning: damage to property from a lightning strike not power surge damage to electricals
2. Explosion of Coal, Natural or manufactured gas excluding boilers or pressured vessels

Question 16

If an insurer opts to pay cash for damaged property, how soon must they pay out after receiving proof of loss?

Answer 16

within 60 days

Question 17

If the insurer is repairing or replacing property, what are their obligations?

Answer 17

They must provide the insured with a written notice of their intent within 30 days of receiving “proof of loss” and start repairs or replacement within 45 days of receiving proof of loss