Study 10 – Industry Programs for Insurance Availability

Question 1

The Board of the Facility Association comprises of

a. senior officials of member companies, representative of servicing and non-servicing carriers and three brokers
b. representatives of servicing and non-servicing carriers and two brokers
c. President, Operating Committee and two brokers
d. President, Chief Executive Officer and Operating Committee

Answer 1

a. senior officials of member companies, representative of servicing and non-servicing carriers and three brokers

Question 2

Individuals who, because of the risk they present, have trouble getting automobile insurance in the regular market, can always get it from the

a. Centre for Study of Insurance Operations
b. Facility Association
c. Insurance Bureau of Canada
d. Insurers’ Advisory Organization

Answer 2

b. Facility Association

Question 3

Residual markets, from an underwriting standpoint referred to

a. special programs to ensure insurance availability for all uninsured drivers
b. market that is immediately available to brokers/agents and the public
c. special programs to ensure insurance availability for less desirable/more hazardous risks
d. special programs to encourage insurance for the more desirable/less hazardous risks

Answer 3

c. special programs to ensure insurance availability for less desirable/more hazardous risks

Question 4

A member of a Facility Association share in the operation in accordance with

a. underwriting ratio
b. participation ratio
c. market share ratio
d. claim ratio

Answer 4

c. market share ratio

Question 5

One of the primary objectives of any special industry program should include:

a. equal sharing of the insurance market by all insurers
b. equitable sharing of the residual market by all insurers
c. proportional sharing of the insurance market by all underwriters
d. all of the above

Answer 5

b. equitable sharing of the residual market by all insurers

Question 6

Which of the following is NOT true of the Facility Association

a. servicing carriers prepare monthly statements for agencies/brokerages and pay them Facility Association levels of commission
b. servicing carrier issues a Facility Association automobile policy to distinguish the coverage from the regular automobile policy
c. facility Association rates do not include a commission in Ontario
d. agency/broker may bind coverage in the name of the servicing carrier

Answer 6

b. servicing carrier issues a Facility Association automobile policy to distinguish the coverage from the regular automobile policy

Question 7

A Member of a Facility Association in the jurisdiction is

a. an insurer licensed in the jurisdiction
b. an insurer licensed to write automobile insurance
c. an insurer licensed to write liability insurance
d. an insurer licensed to write automobile liability insurance

Answer 7

d. an insurer licensed to write automobile liability insurance

Question 8

The Facility Association is a/an

a. incorporated profit-making association of insurers
b. incorporated non profit-making association of insurers
c. unincorporated profit-making association of insurers
d. unincorporated nonprofit association of insurers

Answer 8

d. unincorporated nonprofit association of insurers

Question 9

In jurisdiction where a Pool exists, sharing of results is on the basis of

a. car years insured
b. third party liability premiums written
c. car years insured and third party liability premiums written
d. 50% share of car years and 50% use of the Pool

Answer 9

d. 50% share of car years and 50% use of the Pool

Question 10

There are no such “Facility” type industry or government programs in

a. Alberta, Northwest Territory and Nunavut
b. Northwest Territory, Nunavut and Yukon
c. British Columbia, Manitoba and Saskatchewan
d. Albert, Yukon and Atlantic Canada

Answer 10

c. British Columbia, Manitoba and Saskatchewan