Test No. 1 (Independent Study 4-6)

Question 1

1. a) Explain how insurers get their products to the consumer through the independent agency and brokerage system, exclusive agency system, and direct writing system. (6 marks)

Answer 1

N/A

Question 2

b) Describe how the principal–agent relationship enables one entity to legally appoint another to act on its behalf. (4 marks)

Answer 2

N/A

Question 3

c) Explain the difference between implied and express contracts and provide an example of each. (5 marks)

Answer 3

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Question 4

d) State the purpose of a contract between an agent or broker and an insurer being represented. (4 marks)

Answer 4

N/A

Question 5

e) Outline the responsibilities of agents or brokers under such contracts. (6 marks)

Answer 5

N/A

Question 6

2. a) Explain how federal and provincial and territorial governments exercise controls to safeguard insurer solvency and protect insurance consumers. (20 marks)

Answer 6

N/A

Question 7

b) State the purpose of the Statutory Conditions for accident and sickness, automobile, and fire insurance. (5 marks)

Answer 7

N/A

Question 8

c) Identify the differences between the Statutory Conditions in common law provinces and the General Conditions in Quebec. (5 marks)

Answer 8

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Question 9

3. a) Outline the requirements for contracts under common law. (10 marks)

Answer 9

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Question 10

b) Outline the requirements for contracts under the Civil Code of Québec. (10 marks)

Answer 10

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Question 11

c) Explain why insurable interest is important to a contract of property insurance. (10 marks)

Answer 11

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Question 12

d) Discuss utmost good faith as it relates to the following participants in insurance:

applicant/insured
broker/agent
insurer (5 marks each = 15 marks)

Answer 12

N/A