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RIBO Training > RIBO Rules and Regulations (Word Problems) > Flashcards

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
Q

How much time does RIBO allow for a broker to supply either the policy or a certificate of coverage?

A

21 days

26
Q

What information must the certificate of coverage include?

A
  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
Q

What must a broker do if they wish to charge a fee over the premium set out in the policy?

A

Advise upfront, in writing, before the policy goes in force

28
Q

How many hours of continuing education must a Principal Broker obtain over a year?

A

10 hours

29
Q

How many hours of continuing education must other brokers obtain over a year?

A

8 hours

30
Q

What is the responsibility of a Principal Broker?

A

To supervise brokerage operations

31
Q

How does one get an “Unrestricted” license?

A

Write two 3-hour exams

32
Q

What is equity capitalization?

A

Money in a bank account

33
Q

How much equity capitalization must a sole proprietorship have?

A

greater of $2,500 or amount of deductible (error & omission or fidelity insurance deductible)

34
Q

How much equity capitalization must a partnership or corporation have?

A

greater of $5,000 or amount of deductible (error & omission or fidelity insurance deductible)

35
Q

How much errors and omissions coverage must a brokerage carry?

A

$3 million

36
Q

How much fidelity insurance coverage must a brokerage carry?

A

$100,000

37
Q

What is the maximum fine for a brokerage for misconduct?

A

$100,000

38
Q

What is maximum fine for an individual broker for misconduct?

A

$25,000

39
Q

What is the difference between an insurance broker and an insurance agent?

A

Brokers deal with multiple insurers while agents deal with one insurer or affiliated group of insurers

40
Q

How many people are required to make up a quorum for the RIBO Council?

A

7 members, including one appointed member

41
Q

What is the definition of an insurance broker in the RIB Act?

A

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
Q

What is rebating?

A

Allowing the client to not pay the full amount of their premium

43
Q

What is the difference between rebating and clever negotiating?

A

Clever negotiating is asking the insurer to charge less premium in return for you taking less commission

44
Q

Who are the individuals who may receive a finder’s fee from a broker?

A
  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
Q

How long does RIBO require a broker be licensed before he/she can take the exams to remove the restriction on their license?

A

2 years

46
Q

What is an unlicensed insurer?

A

An insurance company not licensed in Ontario

47
Q

What makes insuring with them a greater risk to an insured?

A

Not regulated under the Insurance Act

48
Q

What must a broker do when placing insurance with an unlicensed insurer?

A
  • 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
Q

What does Regulation 991 concern itself with?

A

Code of conduct and misconduct

50
Q

When two position reports have to be filed with RIBO, when must they be filed?

A
  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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