RIBO Practice Exam 3

Question 1

What differentiates speculative risk from pure risk?

Select one:

a.
The chance of loss

b.
The chance of profit

c.
The presence of a hazard

d.
The presence of a peril

Answer 1

The correct answer is: The chance of profit

Question 2

What is the existence of insurance based on?

Select one:

a.
A gain

b.
A risk

c.
A remote cause

d.
A loss

Answer 2

B

Question 3

Which scenario is an example of a moral hazard?

Select one:

a.
A factory manager with a careless attitude toward health and safety issues

b.
A business with a good credit score

c.
A landlord with an excellent maintenance record for her rental units

d.
A building with an outdated, overloaded electric panel and bare wiring

Answer 3

A

Question 4

Which cause of loss would be covered by insurance?

Select one:

a.
Effective cause

b.
Remote cause

c.
Proximate cause

d.
Immediate cause

Answer 4

C

Question 4

What term is meant to provide compensation for loss or expenses incurred as a result of the insured peril?

Select one:

a.
Insurance

b.
Indemnify

c.
Contract

d.
Risk

Answer 4

B

Question 4

What is the peril insured against in liability insurance?

Select one:

a.
Burglary

b.
Negligence

c.
Fire

d.
Dishonesty

Answer 4

B

Question 5

Which type of actuary analyzes data to determine the amount that should be charged for insurance?

Select one:

a.
Technical actuary

b.
Pricing actuary

c.
Reserving actuary

d.
Performance actuary

Answer 5

B

Question 5

What is, the amount estimated for claims in the process of being settled, known as?

Select one:

a.
Unearned premium

b.
Earned premium

c.
Loss reserves

d.
Incurred but not reported

Answer 5

C

Question 5

What is unearned premium?

Select one:

a.
The penalty charged for cancelling an insurance policy early

b.
The cost for insuring a category of risk

c.
The part of the premium that has not been used or earned

d.
The portion of premium earned or charged for the period of time a policy remained effective

Answer 5

C

Question 6

What is the role of the insurance intermediary?

Select one:

a.
Identify insurance needs, sell policies that will give the highest commission, and set insurance rates

b.
Identify the customer’s needs, match those needs with products available, and pay claims

c.
Identify the customers exposures, assist with selecting appropriate insurance coverage, and facilitate insurance contracts

d.
Identify insurance needs, issue insurance policies, and facilitate insurance contracts

Answer 6

C

Intermediaries help in identifying and matching client’s insurance needs with insurance products and facilitating insurance contracts to the satisfaction of all parties concerned. They do not pay claims or set insurance rates.

Question 6

In an insurance company, what is the role of special investigations units?

Select one:

a.
To investigate job candidates

b.
To research investments for insurer’s capital funds

c.
To adjust claims over the telephone

d.
To investigate suspicious claims

Answer 6

D

Question 6

How many insurance companies does a direct agent typically represent?

Select one:

a.
Two (2)

b.
Unlimited

c.
One (1)

d.
Ten (10)

Answer 6

C

Question 7

What are Property and Casualty insurance policies known as?

Select one:

a.
Valued contract

b.
Guaranteed replacement cost contract

c.
Contracts of indemnity

d.
Contract of compensation

Answer 7

C

Question 7

How is consideration demonstrated in contract law?

Select one:

a.
Requires everyone to have the legal capacity to enter into a contract

b.
Requires genuine intention to create a legally binding contract

c.
Exists when there is agreement to an offer

d.
Must have a price, some value, and be in the present or future

Answer 7

D

Question 7

What allows an agent/broker to accept a risk without receiving prior approval from the insurer?

Select one:

a.
Underwriting

b.
Binding authority

c.
Utmost good faith

d.
Material change in risk

Answer 7

B

Question 8

When an insurance intermediary uses a risk management approach in setting up insurance for a client, what is he providing the client?

Select one:

a.
The same policy and coverages at a lower rate

b.
Help to identify risks and determine the necessary coverage limits

c.
The same policy and coverages, but with fewer exclusions

d.
As many coverage options as possible so the client has lots of choices

Answer 8

B

Question 8

Which province(s) require(s) individuals to have a licence to operate as an insurance intermediary (agent/broker)?

Select one:

a.
Ontario and British Columbia

b.
Ontario, British Columbia, and Nova Scotia

c.
Alberta, Manitoba, and New Brunswick

d.
All provinces and territories

Answer 8

D

Question 8

What term is used to refer to the measurement of how often losses are likely to occur in the future?

Select one:

a.
Exposures

b.
Severity

c.
Hazards

d.
Frequency

Answer 8

D

Question 8

Amy’s young daughter plays with matches and sets the house on fire. Amy has a basic fire policy for $80,000 with an 80% co-insurance clause. The home is valued at $100,000. Damage caused by the fire is $90,000. Calculate the co-insurance amount

Select one:

a.
$90,000

b.
$100,000

c.
$72,000

d.
$80,000

Answer 8

D

Did = $80,000, Should = $80,000, Loss = $90,000 - in this case the co-insurance requirement is met however the amount of the loss exceeds the amount of insurance. The most the policy will pay is the limit of insurance.

Question 8

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

Select one:

a.
Policy conditions

b.
Statutory Conditions/Québec General Conditions

c.
Authority clause

d.
Insuring agreements

Answer 8

D

Question 9

Which concepts reinforce the principle of indemnity in ensuring a fair and proper reimbursement for insureds?

Select one:

a.
Salvage; Subrogation; and Contribution

b.
Depreciation; Deductible; and Contribution

c.
Depreciation; Deductible, and Capacity

d.
Salvage; Subrogation; and Capacity

Answer 9

A

Question 9

What is another word for the non- disclosure of a material fact?

Select one:

a.
Misrepresentation

b.
Duty to inform

c.
Concealment

d.
Obligation to Speak

Answer 9

C

Question 9

A property valued at $2,000,000 and insured for $1,500,000 suffers minor fire damage. There is an 80% co-insurance clause. Calculate the amount to be paid by the insurer. Damage is $2300.

Select one:

a.
$1840

b.
$2000

c.
$2156.25

d.
$2300

Answer 9

C

Question 9

Which type of assignment can occur without the consent of the insurer?

Select one:

a.
Assignments when the insured decides they want to

b.
Assignments under the Insurance Act

c.
Assignments under the Bankruptcy Act

d.
Assignments when property is sold

Answer 9

C

Question 9

What is a benefit of a written insurance application?

Select one:

a.
Reduce the risk of inaccuracies when collecting information

b.
Serve as checklist for adjusters when settling a claim

c.
Assist new agents and brokers with accurate note taking

d.
Help the insurer decide whether commission is payable

Answer 9

A

Question 10

What must the applicant have in relation to the subject of insurance to be considered the named insured on a policy?

Select one:

a.
A mortgagee

b.
No loss history

c.
A co-applicant

d.
Insurable interest

Answer 10

D

Question 10

In the ratemaking process, the reliability of predictions depends on which factor?

Select one:

a.
Conditions in the present are impacted by the past

b.
Conditions in the past that are relative to conditions in the future

c.
Conditions in the future are impacting the past

d.
Conditions in the present are relative to future conditions

Answer 10

B

Question 11

What is a consequence of an agent or broker who does NOT pay the premiums collected to the insurer?

Select one:

a.
The agent or broker will be fined as outlined in the Insurance Act

b.
The agent or broker may be charged a penalty by the insurer

c.
The agent’s or broker’s licence may be suspended or revoked

d.
The agent or broker will be charged interest by the insurer

Answer 11

C

Question 11

Statutory Conditions that apply to all fire insurance contracts may also be extended to cover what other perils?

Select one:

a.
Any other perils that are covered under the property policy

b.
Only specified perils

c.
No other perils besides the peril of fire

d.
Only named perils

Answer 11

A

Question 11

When an insured property is not destroyed, but the insurer reimburses the insured for the damaged property as if it were a total loss, who owns the salvage?

Select one:

a.
The repair contractor

b.
The insurer

c.
The insured

d.
The government

Answer 11

B

Question 12

In most cases, what does an insurer require when providing theft coverage for high-value items, such as jewellery or furs, covered under a personal articles endorsement?

Select one:

a.
Application form completed by the salesperson

b.
Notarized proof of purchase

c.
Detailed description of each item with a bill of sale or appraisal

d.
An affidavit

Answer 12

C

Question 12

How can coverage for earth movement perils be provided?

Select one:

a.
From provincial government disaster recovery programs

b.
With the Purchase of an endorsement

c.
It is included in all types of homeowners policies

d.
From municipal government disaster recovery programs

Answer 12

B

Question 12

What are two areas of focus for insurance regulation?

Select one:

a.
Insurance distribution channels and rating structures

b.
Policy production and policy wordings

c.
Solvency and market conduct

d.
Payment options and ensuring enough choice in the market place

Answer 12

C

Question 13

A heavy downpour where the rain cannot be absorbed by the ground or flow into sewer systems quickly enough and remains on the surface of the ground, is the description for which term?

Select one:

a.
Overland water

b.
Flood

c.
Sewer back-up

d.
Ground water

Answer 13

A

Question 13

What type of customer information may be disclosed by a broker or agent to the insurer?

Select one:

a.
Information about other liability policies the customer has with other insurers.

b.
All customer information may be divulged without the customers permission.

c.
Information required to renew or amend a policy during policy negotiations.

d.
Information about other property the customer owns but is insured by another insurer.

Answer 13

C

Question 13

A process by which an insurer makes good on its promise to pay money to, or on behalf of, an insured if a certain event takes place is referred to as which of the following?

Select one:

a.
The claims process

b.
The application process

c.
The underwriting process

d.
The subrogation process

Answer 13

A

Question 13

Which conditions must be met for a fire insurance policy to classify an incident as a fire?

Select one:

a.
The fire department must classify the incident as a fire.

b.
The fire department must be called to put out the fire.

c.
There must be an actual fire; what is on fire is something that should not have been on fire; the fire was accidental.

d.
Heating of something that is damaged in the heating process; the incident was intentional.

Answer 13

C

Question 13

When the insurer cancels an insurance policy, which type of cancellation applies?

Select one:

a.
A pro rata cancellation

b.
A short-rate cancellation

c.
An average cancellation

d.
A standard cancellation

Answer 13

A

Question 13

What type of fire is one that is burning in its intended place?

Select one:

a.
Accidental fire

b.
Friendly fire

c.
Hostile fire

d.
Arson

Answer 13

C

Question 13

Which statement describes the requirements under the fire Statutory Condition—Termination, when the insured requests the termination of insurance?

Select one:

a.
The insured must provide at least five days’ advance notice to the insurer.

b.
The insured has 15 days to arrange other coverage.

c.
The insured is entitled to a premium refund as soon as practicable from the insurer, calculated on a short-term rate premium basis.

d.
The insurer is required to send written confirmation of cancellation to the insured, including any premium refund as soon as practicable for the insurer.

Answer 13

C

Question 13

A property valued at $60,000 with a co-insurance clause of 80%. It is insured for $24,000. If fire damages the property for $12,000 and there is a $500 deductible, how much will the insurer pay?

Select one:

a.
$5,000

b.
$6,000

c.
$5,500

d.
$12,000

Answer 13

C

Question 13

If personal property is subject to a special limit, how can it be insured for its full value?

Select one:

a.
With an umbrella policy

b.
With an increased limit to the personal property coverage (coverage C)

c.
With a named-perils policy

d.
With a separate endorsement for additional premium

Answer 13

D

Question 14

Payment for information leading to an arson conviction in connection with a fire loss to the insured property, would be covered under what area of a comprehensive homeowners policy?

Select one:

a.
Extensions of Coverage: Arson Conviction Reward

b.
Insured Peril: Fire

c.
Extensions of Coverage: Fire Department Charge

d.
Special Limits of Insurance: Arson Conviction Award

Answer 14

A

Question 14

What coverage is provided by the debris removal extension of a comprehensive homeowners policy?

Select one:

a.
Covers costs to remove debris for the list of specified perils only and provides a high percentage increase to the limit of insurance.

b.
Covers costs to remove debris for fire losses only and can provide a high percentage increase to the limit of insurance.

c.
Covers costs to remove debris after an insured loss and can provide a small percentage increase in the limit of insurance.

d.
Covers costs to remove debris for fire losses only and does not increase the limit of insurance.

Answer 14

C

Question 15

Would there be coverage for loss or damage to the building and contents, under a basic homeowners policy, if heating oil leaked from the residential oil tank?

Select one:

a.
There is no coverage unless the leak occurred while the tank was being filled.

b.
There is coverage if the fuel supply company accepts responsibility.

c.
There is no coverage as leakage from residential oil tanks containing fuel oil is excluded.

d.
There is coverage provided for damage to the building but not for contents.

Answer 15

C

Question 16

Traditionally, the term flood applied to which type of water?

Select one:

a.
A body of freshwater

b.
Overland water

c.
Sewer water

d.
A body of salt-water

Answer 16

D

Question 16

Which additional condition of a comprehensive homeowners policy prevents the insured from claiming the loss of one or more portions of an item as loss of the whole item?

Select one:

a.
Parts

b.
Basis of settlement

c.
Pair and Set

d.
Sue and Labour

Answer 16

A

Question 17

When would an insured homeowner be required to purchase a specialized boat or marine policy?

Select one:

a.
When the boat is valued at $25,000 or more, is longer than 25 feet, and has an inboard motor.

b.
When the boat exceeds the value, size, and power restrictions as stated on a homeowners policy.

c.
When the boat valued at $10,000 or more, is longer than 10 feet, and has an outboard motor.

d.
All boats, regardless of value or size require boat or marine policies.

Answer 17

B

Question 18

Which information is requested on the application for tenants insurance policy?

Select one:

a.
The type of heating in the unit

b.
An inventory of all personal property

c.
The limit of coverage for the dwelling building

d.
The dimensions of the apartment

Answer 18

A

Question 18

What is one reason tenants need insurance when they do not own the dwelling building?

Select one:

a.
For the cost of repairing and replacing damage

b.
Lease agreements require the tenant to carry insurance

c.
They might decide to buy the building later

d.
To add additional living expenses

Answer 18

B

Question 19

The condominium corporation is responsible for snow and ice removal on the property. A guest falls and sues the corporation for his injuries. The corporation’s policy liability limit is $2,000,000, however the plaintiff is awarded $2,500,000 by the court. How does the unit owner’s loss assessment insurance coverage apply?

Select one:

a.
The unit owner’s policy pays nothing as the unit owner is not responsible for snow and ice removal.

b.
The unit owner will be assessed on their share of the shortfall of $500,000 and can claim it on their unit owner’s policy.

c.
The unit owner’s policy pays nothing as the unit owner was not sued.

d.
The unit owner’s policy will pay the entire settlement if the injury occurred on the unit owner’s driveway.

Answer 19

B

Question 19

What is the term for unlawful removal of property from a premise by visible forceable entry or exit?

Select one:

a.
Vandalism

b.
Theft

c.
Burglary

d.
Malicious mischief

Answer 19

C

Question 19

What is a condominium development?

Select one:

a.
A group of low-rise or high-rise apartment building or single-family homes that are commonly owned

b.
A residential complex where dwellings are owned individually, while land and common elements are held in joint ownership

c.
A commercial complex in which dwellings are owned individually, while land and common elements are held in joint ownership

d.
A group of low-rise or high-rise apartment building or single-family homes owned individually

Answer 19

B

Question 20

What is another name for a mobile home?

Select one:

a.
Manufactured

b.
Secondary

c.
Seasonal

d.
Cottage

Answer 20

A

Question 20

Mark is a plumber who installed a bathroom sink for a client. Due to improper installation, the sink leaks and caused damage to the clients’ home. What type of liability coverage does Mark need to pay for this damage?

Select one:

a.
Contractual liability

b.
Products and completed operations

c.
Professional liability

d.
Owners and contractors’ protective liability

Answer 20

B

Question 21

Which sections of a homeowners policy may be used at the discretion of the insured even though there is no legal liability for damage or injury?

Select one:

a.
Coverage E – Legal Liability and Coverage F – Medical Payments

b.
Coverage E – Legal Liability and Umbrella Insurance

c.
Coverage F – Medical Payments and Coverage G–Payment for damage to property

d.
Coverage E – Legal Liability and Coverage G – Payment for Damage to Property

Answer 21

C

Question 22

Which type of insurance protects individuals from the liability of their actions anywhere in the world?

Select one:

a.
Personal liability

b.
Tenants liability

c.
Employers liability

d.
Premises liability

Answer 22

A

Question 22

What is indemnity for claims against the insured by people who have suffered damages in a cyber-attack as a result of the insured’s actions or failure to act?

Select one:

a.
Errors and Omissions Liability Insurance

b.
Cyber Liability Insurance

c.
Directors and Officers Liability Insurance

d.
Cyber Risk Insurance

Answer 22

B

Question 23

What factor does NOT help determine if a home-based business would be considered an incidental exposure or a commercial exposure?

Select one:

a.
The income generated by the business

b.
The business activities taking place in the home

c.
Volume/size of business operations

d.
The number of years the business has been operating

Answer 23

D

Question 24

Does the OPCF 28—Reducing Coverage for Named Persons remove third-party liability and accident benefits coverage?

Select one:

a.
Liability can never be reduced below the minimum limits of the province and accident benefits do apply when an OPCF 28 has been applied.

b.
Third-party lability and accident benefits remain the same, regardless of the addition of this endorsement.

c.
Third-party liability and accident benefits are eliminated for the named person under this endorsement.

d.
Accident Benefits are removed for the named person; however third-party liability still applies.

Answer 24

A

Question 24

What is the purpose of the OPCF 32—Use of Recreational Vehicle by Unlicensed Operators?

Select one:

a.
Waives compliance with the statutory condition pertaining to qualification and the age of the operator of a vehicle while it is being operated off the public highway.

b.
Ensures compliance with the statutory condition pertaining to drivers who are not licensed but borrow the recreational vehicles to drive on the local roads.

c.
Waives compliance with the statutory condition pertaining to qualification and the age of the operator of a vehicle while it is being operated on the public highway.

d.
Ensures compliance with the statutory condition pertaining to qualification and the age of the operator of a vehicle while it is being operated off the public highway.

Answer 24

A: Waives compliance with the statutory condition pertaining to qualification and the age of the operator of a vehicle while it is being operated off the public highway.

Question 24

What is the OPCF 2, and what is the OAP 2?

Select one:

a.
OPCF 2—Drive Other Automobiles is an endorsement; OAP 2—Driver’s Automobile Policy is a policy.

b.
OAP 2—Government Owned Automobiles is a Policy; OPCF 2—Driver’s Automobile Policy is an endorsement.

c.
OAP 2—Drive Other Automobiles is an endorsement; OPCF 2—Driver’s Automobile Policy is a policy.

d.
OPCF 2—Government Owned Automobiles is an endorsement; OAP 2—Driver’s Automobile Policy is a policy.

Answer 24

A

Question 25

For which situation does the OPCF 2—Drive Other Automobiles endorsement expand the definition of insured person?

Select one:

a.
For all coverages to include the insureds spouse

b.
For all coverages when operating a rental car

c.
For third-party liability when operating a non-owned or other automobile

d.
For third-party liability to include everyone within the insured’s household

Answer 25

C

Question 25

What group of insurers provides insurance to owners and operators of automobiles who have difficulty obtaining insurance in the voluntary market?

Select one:

a.
Voluntary Market Association

b.
Residual Association

c.
Facility Association

d.
Alternative Market Association

Answer 25

The correct answer is: Facility Association

Question 26

In Ontario, what is the name of the mandatory automobile policy?

Select one:

a.
SPF 1

b.
OAF 1

c.
OAP 1

d.
OAP 2

Answer 26

C

Question 26

Which example best illustrates the process of obtaining insurance in the Facility Association?

Select one:

a.
Broker or agent would assist in completing a standard application, then a Servicing carrier would issue the policy based on predetermined rates

b.
The insured would contact the Facility Association to complete a standard application and, if they qualify, would contact a broker for issuance of the policy

c.
The insured would contact the Facility Association to complete a standard application and issue the policy based on predetermined rates

d.
Broker or agent would assist in completing a standard application and issue the policy based on predetermined rates

Answer 26

A

This type of vehicle is often operated by underage, and unlicensed operators on trails and off the public roads and highways. The statutory conditions exclude coverage when a described vehicle is operated by an unlicensed driver, and therefore, this endorsement, OPCF 32, is used to remove the exclusion.

Question 26

Which province uses a combination system to distribute insurance?

Select one:

a.
Newfoundland

b.
Manitoba

c.
Quebec

d.
Ontario

Answer 26

C

Question 27

Why must insurers use the regulator approved automobile insurance application form?

Select one:

a.
It allows the insurer to always issue the policy without a signature

b.
The completed application becomes part of the policy issued to the insured

c.
To provide a consistent customer experience among insurers

d.
It allows consumers to purchase insurance online

Answer 27

C

Question 28

Damages of $600,000 have been made against Anita resulting from an automobile accident for which she was at fault. Anita has $500,000 in liability coverage. How will the additional $100,000 in damages be covered?

Select one:

a.
The injured party will only receive the $500,000 maximum coverage of Anita’s policy

b.
The injured party must go to their insurance policy to collect the $100,000 balance

c.
Anita is personally responsible for paying the additional $100,000 in damages.

d.
Anita can purchase coverage for the additional $100,000 in damages she is responsible to pay.

Answer 28

C

Question 28

What information is requested in the section—Driver Information—of the OAP1?

Select one:

a.
Name, date of birth, drivers licence number, marital status, and date first licenced in Canada

b.
Drivers licence and date and class of licence

c.
Name, date of birth, drivers licence number, marital status, and licence plate number

d.
Drivers licence is all that is required as it holds all the information needed

Answer 28

C

Question 28

Which scenario could potentially be covered as a newly acquired vehicle?

Select one:

a.
Purchase of an additional vehicle or replacement vehicle

b.
Purchase of a used vehicle with the intention of selling it for a profit

c.
Purchase of a second vehicle whose registered owner is a family member that does not live in the same household

d.
Purchase of the first vehicle the insured has ever insured

Answer 28

B

Newly Acquired Automobile coverage is important to understand as the replacement or additional vehicle is insured for the same coverages as the described vehicle it replaces or is in addition to.

Question 29

Suzanne is working from home and registers with a carsharing application to supplement her income. One of the renters has an accident and her vehicle is damaged. When she submits a claim to her insurance company, it is denied. Why?

Select one:

a.
Suzanne did not tell her insurance company that she was working from home.

b.
Suzanne had not purchased an endorsement to add coverage.

c.
Suzanne has no claim because coverage when the automobile is rented or leased, is excluded under OAP 1.

d.
Suzanne carried mandatory, but not optional physical damage coverages.

Answer 29

C

Question 29

What is selecting risks and applying rates to the things that are to be insured?

Select one:

a.
Subrogating

b.
Underwriting

c.
Rating

d.
Ratemaking

Answer 29

B

Underwriting is selecting risks and applying the established rates to the specific items that are to be insured.

Question 29

An insured person who was not employed at the time of an accident may still be entitled to income replacement benefits if which condition is met?

Select one:

a.
Was attending school at the time of the accident

b.
S/he can present a paystub for 52 of the previous 104 weeks.

c.
S/he was receiving employment insurance benefits at the time of the accident

d.
Was employed for at least 12 weeks in the 52 weeks prior to the accident.

Answer 29

B

Question 30

Ali uses his car to deliver food for Uber Eats, but he did not disclose this fact to his agent/broker at the time of application. Ali is later at fault in an accident while making a delivery that seriously injures a pedestrian. Would Ali’s insurer be responsible for paying the pedestrian’s claim, and why?

Select one:

a.
Yes. The absolute liability provision will require Ali’s insurer to respond.

b.
No. The pedestrian will seek coverage under his/her own absolute liability.

c.
No. The pedestrian will be required to sue Ali for accident benefits coverage.

d.
Yes. Ali has uninsured automobile coverage which will respond to the claim.

Answer 30

A

Question 31

When are passengers of public transit vehicles eligible to receive statutory accident benefits?

Select one:

a.
When two or more public transit vehicles collide with one another.

b.
When injuries to passengers of the public transit vehicle are serious in nature.

c.
When the public transit vehicle driver is convicted of negligence.

d.
When the public transit vehicle has collided with another automobile or object.

Answer 31

D

Question 31

Mohamad is injured while driving an automobile in the course of his employment. From which type of insurance would he collect benefits?

Select one:

a.
Mohamad will be required to collect benefits from workers compensation.

b.
Mohamad can select either workers compensation or the accident benefits of his policy if his tort claim meets the verbal threshold.

c.
Mohamad can select either workers compensation or the accident benefits of his policy regardless of the severity of the injury.

d.
A judge is required to determine which insurer will pay accident benefits to Mohamad—worker’s compensation or his policy.

Answer 31

B

Question 32

Cathy, does not have a driver’s licence and goes on a car ride with Sue, knowing that Sue did not have her parent’s permission to use the car. If Cathy is injured in an accident, would she be covered by Sue’s parents’ policy for accident benefits?

Select one:

a.
No, the car is considered stolen and no coverage is available.

b.
No, she is not a licensed driver and would not have coverage.

c.
Yes, at a minimum some accident benefits would be available.

d.
Yes, all accident benefits would be available because she was an occupant and not the driver.

Answer 32

C

Question 32

Charlotte is seriously injured while crossing the street by an automobile that flees the scene. What would the driver be considered?

Select one:

a.
Uninsurable

b.
Underinsured

c.
Uninsured

d.
Unidentified

Answer 32

D

Question 32

The regulations under the RIB Act require an insurance broker to provide evidence that insurance has been placed on behalf of a client by

Select one:

a.
a policy of insurance to the member of the public for whom he/she acts within thirty (30) days after placing the insurance.

b.
a policy of insurance to the member of the public for whom he/she acts within five (5) days of receiving it from the insurer.

c.
a policy or certificate of coverage to the member of the public from whom he/she acts within twenty-one (21) days after the placing of the insurance.

d.
the member of the public for whom he/she acts with a receipt for the premium or portion thereof which has been paid and which indicates the date the policy is effective.

Answer 32

C

Question 32

What do the motor vehicle accident claims funds (MVACFs); uninsured motorist coverage; and underinsured motorist coverage, have in common?

Select one:

a.
They are funded by the federal government.

b.
They are optional coverages that insureds can purchase.

c.
The intend to provide coverage to an insured driver if the limits of his/her existing policy are insufficient to cover injuries from an accident.

d.
They intend to provide coverage to victims of automobile accidents who otherwise have no coverage or not enough coverage.

Answer 32

D

Question 32

Which coverage would apply when an automobile collides with a moose?

Select one:

a.
Third-party liability

b.
Specified perils

c.
Comprehensive

d.
Uninsured motorist

Answer 32

C

Question 32

In automobile insurance, what does no-fault mean?

Select one:

a.
Claimants are compensated by their own insurer only if they are NOT at fault for the accident.

b.
No one involved in the accident is determined to be at fault.

c.
Claimants are compensated by their own insurer regardless of who was at fault.

d.
Drivers found at fault for an accident will not see an increase in insurance premiums.

Answer 32

A

Question 32

Two drivers get into an accident in Ontario. One of the drivers is a tourist from a US state insured with an insurer that does NOT subscribe to Ontario DCPD rules. Would Direct Compensation-Property Damage (DCPD) apply?

Select one:

a.
No, because tourists driving in Ontario are not insured unless they purchase separate DCPD coverage while in Canada.

b.
Yes, DCPD applies to all accidents that occur in Ontario regardless of the subscription to the Ontario DCPD rules.

c.
No, both vehicles must be insured by an Ontario insurer or one who subscribes to the Ontario DCPD Rules.

d.
Yes, because DCPD rules apply in Canada and the United States.

Answer 32

C

Question 32

Ahsan’s car skid on ice during a winter storm and sustained damage. Prior to repairs, he rented an indoor garage space to protect the car from the winter weather. How will the expenses be managed?

Select one:

a.
At the expense of the insurer under Salvage

b.
Using his credit card, so he can pay for it later

c.
At the expense of the insurer, as he did everything reasonably possible to protect the vehicle from further damage

d.
In monthly installments to fit in with his budget

Answer 32

C

Question 32

Alan’s roommate takes Alan’s car without permission and damages it in an accident. Alan has Collison and Comprehensive coverages. How will Alan receive assistance to repair his car?

Select one:

a.
Alan will receive financial assistance from the roommate’s insurance policy under the collision section.

b.
Alan has no financial assistance, because his roommate took the car without consent, which is considered theft, and comprehensive coverage excludes theft by anyone in the insured’s household.

c.
Alan will charge his roommate with theft and then it will be covered under the comprehensive section of his insurance policy.

d.
Alan will claim for financial assistance under the All Perils section of his insurance policy.

Answer 32

B

Question 32

When can an insured cancel a contract of automobile insurance?

Select one:

a.
Any time during the contract period

b.
At the end of the contract

c.
Within the first 10 days of the policy period

d.
Within the first 60 days of the policy period

Answer 32

A

Question 33

Under the automobile statutory condition—Authority to Drive and Prohibited Use what does it mean to be ‘authorized’ to drive?

Select one:

a.
To have the physical ability and legal permission to drive

b.
To have legal permission to drive and be the right age

c.
To have the physical ability and mental capacity to drive

d.
To have the mental capacity and be the right age

Answer 33

C

Question 33

A Trust Position Report must be filed with RIBO at which of the following time periods?

Select one:

a.
Twice a year

b.
Monthly

c.
Quarterly

d.
Annually

Answer 33

A

Question 33

What is the minimum age that one can become registered under the RIB Act?

Select one:

a.
25

b.
21

c.
18

d.
19

Answer 33

C

Question 33

An individual is required to register as an insurance broker if he/she

Select one:

a.
provides, for compensation, risk management and loss prevention services on behalf of another.

b.
acts solely as a reinsurance broker.

c.
recommends to friends that they purchase from a specific insurer because of the good deal they obtained for insurance.

d.
transacts insurance, for remuneration, solely on behalf of one insurer and the Facility Association.

Answer 33

A

Question 34

An insurance broker whose registration is restricted to acting under supervision may perform which of the following?

Select one:

a.
Prepare and sign RIBO Position reports on behalf of the insurance broker by whom he/she is employed

b.
Operate a trust account for insurance premiums

c.
Solicit insurance from members of the public anywhere in Ontario

d.
Be a “Principal Broker” as defined in Ontario Regulation 991

Answer 34

C

Question 34

If information on the latest filed application to RIBO becomes obsolete, the member must file a notice correcting the information

Select one:

a.
within 6 months of the change.

b.
within 12 months of the change.

c.
within 14 days of the change.

d.
within 30 days of the change.

Answer 34

D

Question 34

When do all RIBO registrations expire?

Select one:

a.
December 31

b.
August 31

c.
October 1

d.
September 30

Answer 34

D

Question 35

When selling travel health insurance to an applicant, why is it important for brokers to be aware of policy coverage differences?

Select one:

a.
So they can price the policy based on the coverage provided.

b.
It is not important because there is one standard travel health insurance policy in Ontario.

c.
So they can clearly explain the coverages and exclusions that meet the needs of the applicant.

d.
It is not important because coverages are stated in the statutory conditions regardless of what is printed in the policy.

Answer 35

C

Question 35

While discussing travel health insurance needs with a client, he mentions that he will be skiing for the first time during this trip. Which coverage limitation should be discussed with him?

Select one:

a.
Skiing activities void the policy so there is no benefit to purchasing travel health insurance.

b.
There are no coverage limitations to discuss because all plans cover all types of sports injuries.

c.
Participating in professional sports is excluded and he will not be covered.

d.
Skiing may be considered a high-risk sports activity and excluded by some insurers. But it may be possible to obtain this coverage for additional premium.

Answer 35

D

Question 35

You have obtained a travel health policy for a client who is leaving on a trip in five days. By chance you find out that she has just had an increase in her medication which had been declared in the application. What should you do?

Select one:

a.
Ask for the policy to be returned for cancellation.

b.
There is nothing specific to do.

c.
Advise the insured to declare the change to the insurer as it may impact coverage.

d.
Tell the insured to say nothing if there is a claim.

Answer 35

C

Question 35

Why do travel health insurers require insureds to contact the third party administrator when experiencing a medical emergency?

Select one:

a.
To explain the limitations to the insured

b.
To pass the claim details to OHIP

c.
To stabilize the situation and help restore the insured’s health

d.
To reject as many claims as possible

Answer 35

C

Question 36

A client who has just been discharged from the hospital decides to take a trip overseas and calls to arrange travel health insurance. What must you bring to his attention?

Select one:

a.
There is no coverage for any sickness he may have during the trip.

b.
There may be no coverage or limitations of coverage for the condition of sickness for which he was hospitalized.

c.
Nothing.

d.
Coverage for himself and his wife is for accidents only while travelling.

Answer 36

B