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RIBO Rules and Regulations (Word Problems) Flashcards

Understanding RIBO Rules and Regulations via word problems

1
Q

What does RIBO stand for?

A

Registered Insurance Brokers of Ontario

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2
Q

Who does the RIB Act protect?

A

The insurance consumer

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3
Q

What are three things necessary to qualify for registration as an insurance broker?

A
  • Has attained the age of majority (18+)
  • Is of good character and has demonstrated reasonable grounds for belief that he or she will carry on business in accordance with law, integrity and honesty
  • Has not been convicted of any offence which renders him or her unfit to act as a broker
  • Has not been refused a license under the Insurance Act or had a license suspended or revoked for a reason that renders him or her unfit to act as an insurance broker
  • Satisfies the educational requirements (passed the Level I Broker: Entry Level Examination)
  • The individual’s only business or employment is that of an insurance broker and life insurance agent, and other business as the Qualification and Registration Committee considers appropriate
  • Carries on the business of an insurance broker
  • Complies with the continuing education requirements (8 hours)
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4
Q

What are three things a broker with a license restricted to “Acting Under Supervision” may not do?

A
  1. Control trust funds
  2. Act as a Principal Broker
  3. Or operate as a sole proprietor
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5
Q

When do all RIBO licenses expire?

A

September 30 of every year

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6
Q

When do all RIBO licenses need to be renewed?

A

August 31 of every year

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7
Q

What does a broker need to do if they have a second occupation?

A

Apply for a secondary business exemption

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8
Q

What occupations does RIBO allow brokers with a secondary occupation to do?

A

What they feel is not a conflict of interest

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9
Q

How often must a broker file a position report?

A

Twice a year

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10
Q

Is there any way they can get this changed to filing only one a year?

A

Yes, by filing an exemption

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11
Q

How much notice will RIBO give prior to them doing a spot check at a brokerage?

A

30 days

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12
Q

How many people sit on the RIBO Council?

A

13 members

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13
Q

How many members of the RIBO council are elected?

A

9 members

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14
Q

How many members of the RIBO council are appointed?

A

4 members

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15
Q

Who appoints the appointees on the RIBO Council

A

Lieutenant Governor in Council

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16
Q

How many RIBO Committees are there?

A

7 Committees

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17
Q

What does the Complaints Committee do?

A

Investigate Complaints (RIBO Police)

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18
Q

What does the Discipline Committee do?

A

Set disciplinary actions (RIBO Court)

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19
Q

What does the Qualification and Registration Committee do?

A

Make sure brokers are qualified

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20
Q

How many days do you have to update certain information with RIBO?

A

30 days

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21
Q

What is a trust account?

A

Premium held for insurance companies

22
Q

How many days does a brokerage have to deposit premium into a trust account?

A

3 banking days (aka business days)

23
Q

Can a broker spend the full amount of the commission they get on a policy?

A

No, only earned commission

24
Q

Can decisions of the Discipline Committee be made public?

A

Yes, quarterly bulletin or annual report

25
How much time does RIBO allow for a broker to supply either the policy or a certificate of coverage?
21 days
26
What information must the certificate of coverage include?
1. he name and mailing address of the insured 2. A description of the coverage provided 3. The full name of each insurer 4. The amount of insurance placed with each insurer
27
What must a broker do if they wish to charge a fee over the premium set out in the policy?
Advise upfront, in writing, before the policy goes in force
28
How many hours of continuing education must a Principal Broker obtain over a year?
10 hours
29
How many hours of continuing education must other brokers obtain over a year?
8 hours
30
What is the responsibility of a Principal Broker?
To supervise brokerage operations
31
How does one get an “Unrestricted” license?
Write two 3-hour exams
32
What is equity capitalization?
Money in a bank account
33
How much equity capitalization must a sole proprietorship have?
greater of $2,500 or amount of deductible (error & omission or fidelity insurance deductible)
34
How much equity capitalization must a partnership or corporation have?
greater of $5,000 or amount of deductible (error & omission or fidelity insurance deductible)
35
How much errors and omissions coverage must a brokerage carry?
$3 million
36
How much fidelity insurance coverage must a brokerage carry?
$100,000
37
What is the maximum fine for a brokerage for misconduct?
$100,000
38
What is maximum fine for an individual broker for misconduct?
$25,000
39
What is the difference between an insurance broker and an insurance agent?
Brokers deal with multiple insurers while agents deal with one insurer or affiliated group of insurers
40
How many people are required to make up a quorum for the RIBO Council?
7 members, including one appointed member
41
What is the definition of an insurance broker in the RIB Act?
Any person who for any compensation with respect to persons or property in Ontario, deals directly with the public and: * Acts or aids in any manner in soliciting, negotiating, or procuring the making of any contract of insurance or reinsurance whether or not the person has binding authority * Provides risk management services including claims assistance where required. * Provides consulting or advisory services with respect to insurance or reinsurance. * Holds himself or herself out as an insurance consultant or examines, appraises, reviews, or evaluates any insurance policy or makes recommendations or gives advice.
42
What is rebating?
Allowing the client to not pay the full amount of their premium
43
What is the difference between rebating and clever negotiating?
Clever negotiating is asking the insurer to charge less premium in return for you taking less commission
44
Who are the individuals who may receive a finder’s fee from a broker?
1. Licensed as an insurance agent or broker. 2. Licensed to sell mutual funds. 3. Licensed as a real estate agent or broker. 4. Licensed as a mortgage broker. 5. Engaged in the business of a financial planner. 6. Engaged in the business of providing financing. 7. Engaged in the business of providing products or services that reduce insurance risk.
45
How long does RIBO require a broker be licensed before he/she can take the exams to remove the restriction on their license?
2 years
46
What is an unlicensed insurer?
An insurance company not licensed in Ontario
47
What makes insuring with them a greater risk to an insured?
Not regulated under the Insurance Act
48
What must a broker do when placing insurance with an unlicensed insurer?
* Inform the insurance consumer of the risks of entering a contract (the insurer is not subject to regulations under the Insurance Act AND orderly payment of claims may be more difficult) * The member has obtained the written consent of the insurance consumer * Sufficient insurance cannot be obtained at reasonable rates or on the form of contract required by the insurance consumer from licensed insurers
49
What does Regulation 991 concern itself with?
Code of conduct and misconduct
50
When two position reports have to be filed with RIBO, when must they be filed?
1. Fiscal year-end (occurs 3 months after fiscal year-end) 2. Six months after fiscal year-end (occurs 9 months after fiscal year-end)

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