C130

9. What is an insurer's retention? A. The maximum amount that the insurer can insure B. The amount of premium required to pay for all expected losses during a calendar year C. The insurer's acquisition costs for a calendar year D. The amount of exposure and premium that is passed on to the reinsurer on a proportional basis

A. The maximum amount that the insurer can insure

6. What is covered under employers liability coverage? A. Legal liability for bodily injury to residence employees arising out of and in the course of their employment by the insured B. Legal liability arising from the insured's employees using their own cars for personal use C. Legal liability arising from the insured's employees using the insured's car for business use D. Legal liability for the insured's employee damaging another person's property

A. Legal liability for bodily injury to residence employees arising out of and in the course of their employment by the insured

1. Which of the following statements best describes what sales planning is? A. Part of strategic planning and takes place at the management level B. Best left to experts who translate the mission into action C. Part of corporate planning in multinational companies D. Best handled by individual producers at the personal level

A. Part of strategic planning and takes place at the management level

2.What are the three (3) broad categories of insurable risk? A.Personal risks, property risks and liability risks B.Property risks, commercial risks and farm risks C.Liability risks, commercial risks and marine risks D.Personal risks, property risks and commercial risks

A. Personal risks, property risks and liability risks

4. A client presenting a complaint may be upset and in an emotionally heightened state. How should the intermediary respond to the client's emotions? A. Remain calm, clarify the client's position, and keep the discussion focused on the facts. B. Provide reasons for the client's position. C. Advise the client that there is no reason to be so emotional. D. Apologize, realizing that the client is wrong in their reaction and the agent or broker is appeasing them.

A. Remain calm, clarify the client's position, and keep the discussion focused on the facts.

5. Which of the following best describes an independent adjuster? A. Represents the insurance company with respect to a claim B. Is not subject to licensing requirements C. Represents the insured's interests during a claim D. Handles claims for just one company

A. Represents the insurance company with respect to a claim

7. After qualifying and determining the prospect is a target client, the intermediary concludes that the client should renew through the incumbent insurer. What action can the prospect take? A. Sign a letter of authorization appointing the intermediary as broker. B. Transfers between brokers are not permitted. C. Call the insurance company and ask to transfer the policy. D. Register a complaint against other broker with the insurance council.

A. Sign a letter of authorization appointing the intermediary as broker.

3. In a recent sales meeting, the sales manager has asked the customer service agents to start collecting email addresses from Facebook with the intention of sending out a mass newsletter to promote a new cyber security insurance product. What concerns should be addressed in this meeting? A. The Canadian Anti-Spam Legislation (CASL) prohibits commercial messaging without express permission. B. The Personal Information Protection and Electronic Documents Act (PIPEDA) prohibits this type of collection of email addresses. C. The Insurance Act prohibits this type of mass sale of insurance products. D. There are no concerns because Facebook is a public forum.

A. The Canadian Anti-Spam Legislation (CASL) prohibits commercial messaging without express permission.

8. Jon calls his agent advising that he has moved and needs to update his address with the agency. Jackson, the agent, proceeds with an endorsement in order to make the changes to Jon's file. What should Jackson also consider in making this address change? A. What other policies or coverages may be involved in this address change B. How much more premium Jackson must advise his client will be required C. What territory Jon has moved to and if it is now a more high-risk neighbourhood D. Whether Jon has gone through a marital separation causing him to have visitation with his children

A. What other policies or coverages may be involved in this address change

3. What should brokers and agents do to prepare for a phone conversation with a client? A. Have supplies like notepads, pens, documents, forms, or applications ready in order to record the discussion B. Make sure that the door is closed at all times in case of a phone call C. Do nothing to prepare ahead of time since the clients will call in and intermediaries have no need to make outbound calls D. Have an audio recorder computer on hand to document the full discussion with the client

Answer: A. Have supplies like notepads, pens, documents, forms, or applications ready in order to record the discussion

8. Which of the following businesses would be best protected by extra expense coverage? A. A large manufacturing firm of a specialty element has a fire loss which halts all business operations. B. A small accounting firm that rents out mall space is forced out of the location due to roof cave-in. C. A grocery retailer suffers a large burglary and vandalism, necessitating emergency repairs to the windows and doors of its location. D. A jewellery shop suffers smoke damage due to a neighbouring fire.

B. A small accounting firm that rents out mall space is forced out of the location due to roof cave-in.

3. Which of the following examples accurately describes a vacant dwelling? A. The insured goes to Florida for six months and leaves most of the contents in the home during the absence. B. The insured has passed away and all contents have been removed from the dwelling, which is up for sale. C. The insured is on a sabbatical from her job as a professor and is temporarily living in Australia. D. The insured is renting out the residence temporarily during a trip around the world.

B. The insured has passed away and all contents have been removed from the dwelling, which is up for sale.

5. What is a cover note? A. A temporary measure to insure in an agreed manner while waiting for the completed policy to be issued B. A written or oral agreement issued by an agent or broker to insure a risk, pending the issuance of a formal policy C. A document with insurance, or the insurance protection provided D. An interim receipt

C. A document with insurance, or the insurance protection provided

5. Identify the true statement about agent and broker authority. A. In an implied agency agreement, all terms have been specifically stated and agreed upon. B. Binding authority is the capacity to confirm to applicants that all incurred losses will be covered. C. Agents and brokers obtain their authority from the agreement entered into with their insurers. D. Policy premiums belong to the agent or broker, while the commission belongs to the insurer.

C. Agents and brokers obtain their authority from the agreement entered into with their insurers.

7. Which of the following is a condition of a rebuilding clause? A. If the building is damaged, the insurer will initially pay 20 percent of the total payable. B. The building must be completely destroyed for this clause to take effect. C. If the insured rebuilds within 9 to 12 months of the loss and within 200 ft of the damaged building, the insurer will pay the remainder. D. If the building is damaged, the insurer will only pay out the ACV of the loss and not the rebuilding cost.

C. If the insured rebuilds within 9 to 12 months of the loss and within 200 ft of the damaged building, the insurer will pay the remainder.

10. Which one of the following examples would be considered a sewer backup loss? A. The large tree in the front yard sends its roots into the fresh water line going from the city-owned pipe to the home, causing the pipe to burst and water to come into the home. B. A major rainstorm causes a torrential downpour within a short period of time, which results in city streets being inundated with water and causing the municipal systems to back up into a ravine. C. Lightning strike causes a blackout and subsequently results in a power failure of the sump pump causing water to back up into the home. D. The insured leaves the outside hose running and water starts coming into the basement through the window.

C. Lightning strike causes a blackout and subsequently results in a power failure of the sump pump causing water to back up into the home.

5. Which of the following is a common method of loss mitigation to help protect a home from sewer backup damage? A. Fire extinguisher B. Monitored burglar alarm system C. Monitored water alarm with sensors D. Carbon dioxide detector

C. Monitored water alarm with sensors

7. What is the amount of money an insurer charges to provide insurance coverage? A. Rate B. Interest C. Premium D. Service fee

C. Premium

8. Which jurisdiction is mainly responsible for licensing requirements? A. Federal B. Municipal C. Provincial D. Civil

C. Provincial

4. Which of the following property risks would have the lowest exposure risk for an insurer? A. Semi-detached home B. Tri-plex C. Single detached home D. Fire-resistant high rise

C. Single detached home

7. Why have insurers traditionally used the age, gender, and marital status of applicants when determining automobile insurance premiums? A. These factors are readily available and easy to quantify B. These factors can be ascertained usually from social media and do not require confirmation C. Statistically, there is a correlation between losses and these factors D. Statistically, there is a correlation between how often the vehicle is driven and these factors

C. Statistically, there is a correlation between losses and these factors

9. Peter and Mai Trang have been shopping around for insurance since their renewal on June 1. It is now December 17. They call their broker, Jackie Longson, to notify her that they would like to cancel their policies for home and auto as they have found another insurer who has offered them a much lower premium. Jackie advises that Peter and Mai will be asked to sign a cancellation form. What else does Jackie need to advise her clients about? A. They are not allowed to cancel their policy in the middle of the term as they signed a contract for one year. B. The Trangs will need to give Jackie a referral for another client as they are taking their business elsewhere, leaving Jackie with a loss of income. C. The Trangs will face a short-rate cancellation of their policy, resulting in a financial penalty. D. If they leave the brokerage, they will not be allowed to return for three years.

C. The Trangs will face a short-rate cancellation of their policy, resulting in a financial penalty.

9. Which of the following is a reason for premium discrepancy between a binder and the replacing policy? A. Coverages were left off or added in error. B. The policy was declined for underwriting reasons. C. The insurer uncovered aspects of the risk that were not as described in the application. D. The insurer's standard policy wording may have changed.

C. The insurer uncovered aspects of the risk that were not as described in the application.

10. Which one of the following is a valid reason for an underwriter to decline a risk? A. The insurer writes that class of business. B. The underwriter personally knows and does not like the applicant. C. The risk is much more hazardous than the average risk. D. The risk is standard.

C. The risk is much more hazardous than the average risk.

9. Which of the following are considered insured persons under the Accident Benefits section of the owner's policy? A. The named insured B. The named insured's spouse C. Any driver named on the policy D. All of the above

D. All of the above

2. Which of the following promotional activities would be an example of differentiation? A. A brokerage has purchased a large billboard on a major commuter highway. B. An insurer developed commercials and purchased a television advertising package. C. An intermediary has arranged for flyers to be included in the local newspaper. D. An insurer offers a discounted rate to the owners of a specific luxury car.

D. An insurer offers a discounted rate to the owners of a specific luxury car.

8. Where do statutory conditions apply? A. In Quebec only B. To all insurance policies C. In all Civil Code provinces D. In all common law provinces and territories

D. In all common law provinces and territories

6. What is one of the ways that an intermediary can deal with a client's dissatisfaction that has led to a non-renewal of the policy? A. Accuse the insurer of being responsible for the client's situation. B. Advise the client that the situation is not resolvable and send them to another brokerage. C. Advise the client that the only resolution is to seek the services of a direct writer. D. Listen to the insured's concerns and offer solutions if possible.

D. Listen to the insured's concerns and offer solutions if possible.

10. As a recommended best practice, what should an intermediary request when the client decides to cancel an insurance policy? A. That the insured shred all documents they still have for the policy that they are requesting to be cancelled B. That the insured not tell friends and family of their decision to cancel the policy as it could ruin the intermediary's reputation C. That the client explain why they decided to shop their insurance without asking the broker or agent to help them with the premiums D. That the client sign a cancellation form, making sure that all owners or named insureds sign the form

D. That the client sign a cancellation form, making sure that all owners or named insureds sign the form

1. When reviewing basis of claim settlement in a property policy, which of the following descriptions is correct? A. The claim for damaged property will be settled based on the cost to repair or replace less depreciation. B. The claim for damaged property will be settled based on fair market value. C. The basis of loss settlement will depend on the replacement cost value (RCV) of the damaged or stolen property, without deduction for depreciation, subject to certain conditions. D. The basis of loss settlement will solely depend on the type of coverage purchased as shown on the declarations page of the policy and the insurer's specific wordings.

D. The basis of loss settlement will solely depend on the type of coverage purchased as shown on the declarations page of the policy and the insurer's specific wordings.

6. Which of the following best describes a condominium unit owner's risk? A. The insured owns the dwelling building and a share of the common elements. B. The insured owns only the contents inside the building. C. The insured owns a building that has several units occupied by different families. D. The insured owns the unit but only the inside space and shares in the losses of the common amenities.

D. The insured owns the unit but only the inside space and shares in the losses of the common amenities.

6. Why is the initial information collected when qualifying clients including interests and hobbies useful? A. The intermediary can then upsell and cross-sell insurance products, earning more commission. B. It allows the intermediary to focus on physical items used that might need insurance. C. It allows the intermediary to see if they have things in common. D. The intermediary can access information that can be helpful when trying to uncover needs unique to the client.

D. The intermediary can access information that can be helpful when trying to uncover needs unique to the client.

6. Material facts A. are the least important information given to the insurer. B. can guarantee a claim payment. C. are not required by agents or brokers. D. must be disclosed by the applicant if asked about.

D. must be disclosed by the applicant if asked about.

10. Derek has an automobile with an actual cash value (ACV) of $500 and attached equipment with a value of $1,200. His policy has an endorsement to limit the amount paid to the ACV or a stated amount, whichever is less, in case of a loss. If the automobile was declared a total loss following an accident, what would the insurer pay? A. $500 B. $700 C. $1,200 D. $1,700

A. $500

5. Which of the following best defines the term "material fact"? A. A fact that would affect a contract of insurance enough to influence an insurer's decision regarding whether to accept or reject the risk B. A fact that would affect a contract of insurance enough to influence the time to issue the policy documents C. Any fact regarding the risk to be insured D. A fact that would affect a contract of insurance enough to influence an insurer's decision on the payment options available to the client

A. A fact that would affect a contract of insurance enough to influence an insurer's decision regarding whether to accept or reject the risk

1. Which of the following statements best describes how nuisance arises? A. A person's right to use his or her property is substantially interfered with. B. Someone commits a wrongful act, causing damage or injury to another. C. A careless act results in a great number of people being inconvenienced. D. A criminal court finds a party not guilty, but a civil court orders compensation.

A. A person's right to use his or her property is substantially interfered with.

8. What is "utmost good faith"? A. A phrase in a legal document calling for the highest standards of integrity on the part of the insured and the insurer B. A legal principle that calls for perfect candor from the applicant only C. A legal principle that applies to all contracts, including insurance contracts D. A phrase in a legal document calling for the highest standards of integrity on the part of the intermediary

A. A phrase in a legal document calling for the highest standards of integrity on the part of the insured and the insurer

10. What is the best way to compare a binder to the policy that replaces it? A. A side by side, line by line comparison is often the best way. B. The underwriter will always point out differences. C. Matching the premium is often the best way. D. Matching the coverages is often the best way.

A. A side by side, line by line comparison is often the best way.

6. What is the definition of errors and omissions? A. Actions or inactions of an insurance intermediary in the performance of professional duties that lead to financial losses B. Fraudulent statements from an insurance intermediary that lead to a misrepresentation C. Actions or inactions of an insurance intermediary in the performance of professional duties that lead to property damage losses D. Fraudulent statements from an insurance intermediary that lead to bodily injury losses

A. Actions or inactions of an insurance intermediary in the performance of professional duties that lead to financial losses

4. Which one of the following techniques is most likely to increase a sales agent's closing ratio? A. After completing the application for a new client, asking for the expiry dates of other policies the agent may have the opportunity to quote B. Going door to door and asking prospects for the chance to quote their policy C. Putting an advertisement in a local paper that is going to generate calls from many different types of insurance buyers D. Hiring a lead generation service that will survey the trading area for potential leads

A. After completing the application for a new client, asking for the expiry dates of other policies the agent may have the opportunity to quote

8. Why would insurance agents ask clients to consider whether the level of protection given by the provincial minimum mandatory third-party liability insurance is adequate? A. Because clients should consider protection before premium when selecting coverage B. Because provincial regulations require intermediaries to sell the best insurance coverage available C. To avoid errors and omissions claims D. To meet sales targets with insurers

A. Because clients should consider protection before premium when selecting coverage

9. Which of the following coverages are typical on an MSE package policy? A. Business contents (stock, equipment, and tenant improvements) against fire and EC or all risks B. Personal injury and advertising C. Manufacturers output form D. Commercial property floater (CPF), office equipment floater (OEF), valuable papers and records, accounts receivable, electronic data processing equipment (EDP)

A. Business contents (stock, equipment, and tenant improvements) against fire and EC or all risks

The client requested one form of coverage but the broker or agent arranged another, and the client's claim was denied. What is this an example of? A. Failure to provide correct coverage B. Failure to provide coverage in time C. Failure to place coverage at all D. Failure to explain effects of endorsements

A. Failure to provide correct coverage

6. Which question is asked in the Report of Broker or Agent section of the application? A. Has the broker or agent bound the risk? B. Is the client the broker or agent's friend? C. Does the client have any pets? D. How tall is the client?

A. Has the broker or agent bound the risk?

4. Which of the following statements is true of backdating? A. It can expose the insurer to losses that have already occurred that otherwise would not have been within the policy term. B. It is always indicative of a fraudulent situation. C. It is a common request and intermediaries usually have binding authority to backdate. D. It is allowed, but only for seven days.

A. It can expose the insurer to losses that have already occurred that otherwise would not have been within the policy term.

4. Why is the existence of multiple loss payees concerning to underwriters? A. It can indicate poor cash flow, which can result in poor or delayed maintenance. B. It becomes cumbersome to add too many lenders to the policy documents. C. Underwriters can't know the details of the relationship between the loss payees, resulting in too many questions for the broker. © The Insurance Institute of Canada 1 D. It indicates that the applicant has poor credit and is definitely a moral hazard.

A. It can indicate poor cash flow, which can result in poor or delayed maintenance.

7. Which of the following statements best describes a deductible? A. It is the amount of a loss that the insured must pay. B. It is imposed if the insured is at fault. C. It only applies to property losses. D. It is always stated as a dollar value.

A. It is the amount of a loss that the insured must pay.

3. What is binding authority? A. The capacity to confirm to people who have submitted insurance applications that they have insurance coverage B. A temporary measure to insure in an agreed manner while waiting for the completed policy to be issued C. A written or oral agreement given by an insurer to insure a risk D. The limit, expressed by the insurer, up to which the intermediary can insure

A. The capacity to confirm to people who have submitted insurance applications that they have insurance coverage

7. What is an aggregate limit? A. The maximum total amount that will be paid out in actual claims during a policy year B. The maximum amount of deductible that will be charged for claims during a policy year C. The maximum amount of premium that will be charged for coverage for a policy term for a policy that has an adjustable premium clause D. The maximum amount of coverage available for a specified exposure under the policy

A. The maximum total amount that will be paid out in actual claims during a policy year

1. Who stands to incur costs if a vehicle is damaged or destroyed in an accident? A. The owner of the vehicle B. The garage making repairs to the vehicle C. The tow truck driver who towed the vehicle to the garage D. The bystander who saw the accident that damaged the vehicle

A. The owner of the vehicle

8. What does "salvage" in terms of an insurance claim refer to? A. The remaining value of property after a severe loss B. The right to recover damages from an at-fault party C. The insured's requirement to assist in the litigation process D. The actual cash value of an item that is lost or damaged in a claim

A. The remaining value of property after a severe loss

2. Which of the following statements is correct with respect to a first notice of loss (FNOL)? A. When a policyholder reports a claim to an intermediary, the insurer is deemed to have received notice of the claim. B. A policyholder must report a claim directly to his or her insurer. C. Only a named insured on a policy can report a claim on that policy. D. Brokers in jurisdictions with government auto schemes are required to take FNOL on behalf of the Crown corporation.

A. When a policyholder reports a claim to an intermediary, the insurer is deemed to have received notice of the claim.

7. Once the policyholder has been fully indemnified for the loss, any property remaining can be sold to recoup some of the loss. Any money recovered on the sale of this property A. belongs to the insurer. B. belongs to the insured. C. belongs to the adjuster handling the claim. D. must be determined in accordance with the statutory condition appraisal.

A. belongs to the insurer.

6. Which of the following would be an example of a pure risk? A. An investor has purchased shares on the stock market. B. A windstorm could destroy a homeowner's gazebo. C. A spectator at the football game bought a 50/50 ticket. D. A homeowner is certain real estate is on the upswing.

B. A windstorm could destroy a homeowner's gazebo.

3. Which of the following would be an example of a contravention of a statutory condition? A. After a loss, the insured separated undamaged property from damaged property. B. After a loss, the insured did not take steps to prevent further damage to insured property. C. After a loss, the insured did not notify the police. D. After a loss, the insured promptly reported it in writing to the insurer.

B. After a loss, the insured did not take steps to prevent further damage to insured property.

4. What is the Facility Association? A. An unincorporated for-profit association of insurers B. An entity established by the Canadian automobile insurance industry to ensure that automobile insurance is available to all owners and licensed drivers of motor vehicles, where such owners or drivers are unable to obtain auto insurance through the voluntary insurance market C. A private insurance company operating in the Canadian market D. An entity established by the Crown Corporations providing automobile insurance to ensure that automobile insurance is available to all owners and licensed drivers of motor vehicles, where such owners or drivers are unable to obtain autom insurance through the voluntary insurance market

B. An entity established by the Canadian automobile insurance industry to ensure that automobile insurance is available to all owners and licensed drivers of motor vehicles, where such owners or drivers are unable to obtain auto insurance through the voluntary insurance market

1. Why does selecting an insurer require more consideration for a broker? A. Brokers select insurers on a rotation basis to ensure equal support to each market their brokerage supports. B. Brokers select an insurer from the ones represented based on an analysis of insurers' products and underwriting. C. Insurers provide brokers with less assistance in arranging coverage than they give to agents in similar situations. D. Insurers have higher expectations of the quality of client that a broker presents to them than they do with agents.

B. Brokers select an insurer from the ones represented based on an analysis of insurers' products and underwriting.

3. Identify the two ways that automobile insurance is distributed in Canada. A. By direct writers and direct response companies B. By private insurance companies and Crown corporations C. By direct writers and brokers or agents D. By brokers and agents

B. By private insurance companies and Crown corporations

9. Which of the following best describes non-owned automobile liability coverage? A. Protects employees from liability for any loss due to their work activities B. Can be sold as a standalone policy or be added as an extension of the CGL policy C. Is only for garage business operations D. Only applies to insureds with rental cars

B. Can be sold as a standalone policy or be added as an extension of the CGL policy

10. When a prospect expresses the opinion that insurance companies just take in money and never pay claims, how should a professional intermediary respond? A. Agree with the client to avoid confrontation because the agency could lose the account. B. Confirm that the insurance company the prospect has dealt with in the past may do that but the one the intermediary sells for does not. C. Decline to assist the prospect because the intermediary suspects that he will be a difficult client. D. Counter with examples of the types of claims that have been paid by the company.

B. Confirm that the insurance company the prospect has dealt with in the past may do that but the one the intermediary sells for does not.

5. Which of the following statements is true when considering the actions of employees? A. Employees have to repay their employer if they are at fault for damages to a third party. B. Employers can be held liable for the actions of persons employed by them. C. Employees are responsible for their own actions, even if they are outside of work terms. D. Vicarious liability means the employee is not responsible for third-party injuries or loss.

B. Employers can be held liable for the actions of persons employed by them.

1. What facts are considered material in nature? A. All facts about the risk to be insured B. Facts about the risk that would impact the terms offered C. Facts that are disclosed by the client to the insurance provider D. All facts required so that the risk can be properly assessed

B. Facts about the risk that would impact the terms offered

7. Legally, knowledge of the intermediary is considered to be knowledge of which of the following people? A. Broker B. Insurer C. Adjuster D. Client

B. Insurer

1. Which of the following statements best describes the information obtained from a client following a loss? A. It must lead to a determination of damages or fault. B. It should be reviewed and compared to the information in the policy file. C. It should always be the same kind of information, regardless of the severity or type of loss. D. It need not be that detailed as the adjuster's investigation will fill in any blanks.

B. It should be reviewed and compared to the information in the policy file.

3. Which of the following is a special class of loss payee that has a registered interest on real property offered as security for the money that the mortgagee has loaned the property owner? A. Insured B. Mortgagee C. Named insured D. Applicant

B. Mortgagee

1. PIPEDA is a federal statute that governs the collection and use of personal information. What does the acronym "PIPEDA" stand for? A. Protection of Information Personal to Everyone Deemed Acceptable B. Personal Information Protection and Electronic Documents Act C. Proper Information Protection and Electric Documents Act D. Personal Incidents of Protection and Elementary Details Information Act

B. Personal Information Protection and Electronic Documents Act

2. In Canada, which jurisdiction does automobile insurance fall under? A. Municipal B. Provincial and territorial C. Federal D. All of the above

B. Provincial and territorial

1.Which type of risk can be insured? A.Illegal risk B.Pure risk C.Speculative risk D.Moral risk

B. Pure Risk

10. What is the benefit to the insured of having a policy that offers guaranteed replacement cost? A. The customer will be able to replace all of the property's contents without depreciation being applied. B. So long as the client purchases insurance to the limit recommended by the insurer, any insured loss will be covered even if the total loss amount exceeds the limit of insurance on the policy. C. Guaranteed replacement cost means the insured will get a cash settlement equivalent to the market value of their home. D. There is no benefit to the insured to having a policy with guaranteed replacement cost.

B. So long as the client purchases insurance to the limit recommended by the insurer, any insured loss will be covered even if the total loss amount exceeds the limit of insurance on the policy.

2. Jameela calls the brokerage and, when unable to reach her broker, decides to leave a message on his voicemail. She instructs him to remove a vehicle from her policy effective immediately and wants proof of the change sent to her in the mail. What should the broker have done so that Jameela is discouraged from requesting changes to her policy without speaking to the broker? A. The broker should have forwarded his phone to a co-worker so that the voicemail was not required and a personal message could have been relayed by the co-worker. B. The broker should have a statement on his voicemail greeting advising that any changes, additions, or reductions on an insurance policy cannot be completed without a discussion with the broker. C. The broker should have forwarded his office phone to his cell phone so that he doesn't miss a client call. D. There is nothing different that the broker should do and he should just follow up on completing the required changes.

B. The broker should have a statement on his voicemail greeting advising that any changes, additions, or reductions on an insurance policy cannot be completed without a discussion with the broker.

9. Which of the following would be most likely to be considered a home-based business insurable under an extension on the insured's homeowners policy? A. The insured makes ceramic personalized mugs, has a kiln in their basement, and paints the mugs in the outbuilding on their property using a high-velocity paint sprayer. B. The insured is a bookkeeper who goes to each customer's place of business, picks up applicable receipts and evidence of expenses, and then goes home to complete the actual paperwork using her own computer and specialized purchased software. She then forwards files to the business owner's accountant for review. C. The insured is a mechanic who occasionally works on vehicles at home for cash for friends and family. D. The insured makes doll clothes for use with a major toy manufacturer's doll; once complete, these will be shipped all over North America for sale at small craft shows.

B. The insured is a bookkeeper who goes to each customer's place of business, picks up applicable receipts and evidence of expenses, and then goes home to complete the actual paperwork using her own computer and specialized purchased software. She then forwards files to the business owner's accountant for review.

6. What are the usual exclusions under the personal articles policy form? A. Wear and tear; birds or vermin; nuclear incident; war; intentional or criminal acts by the insured; and electrical currents B. Wear and tear; birds or vermin; nuclear incident; war; intentional or criminal acts by the insured; and electrical currents, other than lightning, which damage electrical devices or appliances C. Wear and tear; nuclear incident; war; intentional or criminal acts by the insured; and electrical currents, other than lightning, which damage electrical devices or appliances D. Wear and tear; birds or vermin; war; intentional or criminal acts by the insured; and electrical currents, other than lightning, which damage electrical devices or appliances

B. Wear and tear; birds or vermin; nuclear incident; war; intentional or criminal acts by the insured; and electrical currents, other than lightning, which damage electrical devices or appliances

8. Insurance policies can provide coverage for both direct and indirect losses. Which of the following is not an example of an indirect loss? A. A vehicle was damaged in an accident and now the client has to pay for a taxi to get her to work. B. A house was damaged in a fire and the owner has to stay in a hotel until the repairs are completed. C. A neighbour's garden shed was destroyed when a tree from the insured's property fell on it. D. A storm knocked out the power and all food in the freezer thawed out.

C. A neighbour's garden shed was destroyed when a tree from the insured's property fell on it.

4. If a client is uncertain as to whether they should file a claim for a loss, what should the intermediary do? A. Advise the client that it is up to the agent or broker to decide whether a loss should be reported. B. Contact the insurance company and report it themselves. C. Advise the client of the pros and cons of any action. D. Contact the third party directly and negotiate a claims settlement on insured's behalf.

C. Advise the client of the pros and cons of any action.

3.Which of the following actions can a general agent perform? A.Appoint public adjusters B.Sell and underwrite risks for one insurance company only C.Appoint other agents D.Create insurance rates and calculate premiums to be charged for categories of risks

C. Appoint other agents

1. Which of the following is the coverage needed to protect a customer's home because a change in building code would require the home to be replaced or rebuilt differently in the event that the dwelling suffered a loss from an insured peril? A. Zoning law coverage B. Replacement cost coverage C. Bylaws coverage D. Building coverage

C. Bylaws coverage

10. When two or more insurance contracts cover the same interests at the time of loss, which of the following applies? A. Both policies pay their policy limits. B. The highest deductible applies to the loss. C. Each insurer pays its rateable proportion of the loss. D. Neither policy responds as they cancel each other out.

C. Each insurer pays its rateable proportion of the loss.

5. Qualifying a client means A. obtaining information for the purposes of completing an application for insurance. B. submitting a proposal to an insurer requesting products and pricing based on a description of the client's exposures and coverage needs. C. asking questions to determine if the prospect is a target client who has needs that can be met with products and services offered. D. making sure that the client can pay in full for the policy.

C. asking questions to determine if the prospect is a target client who has needs that can be met with products and services offered.

2. Which of the following best describes the perils insured under the fire and extended coverage policy? A. Fire, lightning, and limited explosion only B. Fire, lightning, and limited explosion and the resultant damage caused by smoke and water C. Fire, lightning, and limited explosion, resultant damage caused by smoke and water, windstorm, hail, civil commotion, riot, vandalism or malicious acts, aircraft and vehicle damage, falling object, smoke damage, leakage from fire protective equipment, and theft D. Resultant damage caused by smoke and water, windstorm, hail, explosion, civil commotion, riot and riot attending a strike, vandalism or malicious acts, aircraft damage, vehicle damage, falling object, smoke damage, leakage from fire protective equipment, and theft coverage

C. Fire, lightning, and limited explosion, resultant damage caused by smoke and water, windstorm, hail, civil commotion, riot, vandalism or malicious acts, aircraft and vehicle damage, falling object, smoke damage, leakage from fire protective equipment, and theft

8. Which action is most likely to generate the greatest amount of information about what a commercial client does? A. Compiling a list of products and/or services from the client's website B. Requesting a walk-through of the client's business C. Having the client explain his or her business operations in detail D. Pretending to be a client and requesting information on the business

C. Having the client explain his or her business operations in detail

2. Why are the intermediary and the insurer concerned about occupancy of a dwelling? A. There should be no concern over who occupies a residence. B. The use of a building will determine how it will be insured. C. Occupancy is directly related to how a building will be insured as well as what coverage is required by the owner and afforded by the insurer. D. Commercial-use buildings are of more concern than residential-use buildings.

C. Occupancy is directly related to how a building will be insured as well as what coverage is required by the owner and afforded by the insurer.

3. Which of the following coverages does the condominium unit owners policy provide? A. Personal property, liability, and additional living expense B. Personal property, liability, additional living expense, and improvement and betterments C. Personal property, liability, additional living expense, improvement and betterments, loss assessment, and unit additional protection D. Personal property, liability, additional living expense, improvement and betterments, and loss assessment

C. Personal property, liability, additional living expense, improvement and betterments, loss assessment, and unit additional protection

4. Which of the following examples illustrates a loss where a special limit of insurance under a homeowners policy would apply? A. A windstorm causes roof shingles to be blown off and water enters the roof, causing internal damage to the insured's drywall and contents. B. Hail damage causes the insured's vinyl siding to become pitted and damaged. C. The insured takes off her rings in a restaurant in order to wash her hands and forgets to put them back on; when she goes back to retrieve them, the rings have disappeared. D. The insured leaves a pot of grease on the stove and the pot boils over, causing a fire in the kitchen.

C. The insured takes off her rings in a restaurant in order to wash her hands and forgets to put them back on; when she goes back to retrieve them, the rings have disappeared.

5. From an insurer's standpoint, and in accordance with Canada's privacy legislation, why is a signature needed on an application? A. To approve insurance for the applicant B. To provide permission to seek underwriting information C. To approve insurance for the applicant and provide permission to seek underwriting information D. None of the above

C. To approve insurance for the applicant and provide permission to seek underwriting information

9. A seasonal homeowners insurance policy declaration page includes coverage for burglary on the policy. Which of the following losses would be covered within the definition of burglary? A. An expensive purse with prescription sunglasses was stolen from the patio table on the back deck. B. Three cases of wine went missing from the back of the van while the driver was unloading the groceries. C. While the homeowners were golfing, someone cut a padlock off the shed and stole all the gardening tools. D. The homeowner forgot her engagement ring by the washroom sink; when she returned to look for it, it was gone.

C. While the homeowners were golfing, someone cut a padlock off the shed and stole all the gardening tools.

9. What does the coinsurance clause require an insured to do? A. Carry less than adequate amounts of insurance B. Declare values at risk on a monthly basis C. Maintain separate coverage if more than one building is insured D. Become a coinsurer on partial losses in some circumstances

D. Become a coinsurer on partial losses in some circumstances

5. Anita stops by the brokerage very upset about her renewal documents. Anita feels that a mistake has resulted in a significant increase in her renewal premium. She demands to speak with her broker, who is not currently available. What should the representative of the brokerage do? A. Advise Anita to talk with her broker tomorrow B. Assume that Anita is just being difficult for no reason and send her away C. Call the broker to inform him that Anita is at the office and really upset D. Avoid assuming that Anita is a difficult person and listen to Anita's situation

D. Avoid assuming that Anita is a difficult person and listen to Anita's situation

8. Which of the following coverages are included in a commercial general liability (CGL) policy? A. Bodily injury, property damage, medical payments, employers liability, voluntary payments B. Bodily injury, property damage, medical payments, employers liability, contractual liability C. Bodily injury, property damage, voluntary payments, employers liability, legal cost D. Bodily injury, property damage, personal injury, medical payments, tenants legal liability

D. Bodily injury, property damage, personal injury, medical payments, tenants legal liability

7. Which of the following best describes a seasonal dwelling? A. Seasonal risk that can be mobile or permanently parked B. Tends to have private fire brigade protection C. Is more fire-resistant than a primary dwelling D. Can be vacant or unoccupied for considerable periods of time

D. Can be vacant or unoccupied for considerable periods of time

2. What is the name of the national association of property and casualty insurers and independent insurance brokers who work together to achieve electronic business solutions for the insurance industry, including the creation of industry-standard application forms? A. Centre for Insurance Applications B. Canadian Standard Insurance Organization C. National Electronic Business Solutions D. Centre for Study of Insurance Operations

D. Centre for Study of Insurance Operations

2. What are the common forms for personal-lines package policies? A. Comprehensive, actual cash value, and replacement cost B. Comprehensive, broad, and agreed value C. Guaranteed replacement cost, actual cash value, replacement cost D. Comprehensive, broad, and limited

D. Comprehensive, broad, and limited

6. Which of the following best describes telephone adjusters? A. Are required to be licensed in the province where they work B. Attend loss locations personally to obtain details of the claim C. Are hired to represent the insured's interests in a claim D. Conduct claims investigations by phone and through the mail

D. Conduct claims investigations by phone and through the mail

2. Which of the following statements best describes the action of the Civil Code of Québec? A. Determines guilty actions and assigns punishments B. Is the criminal code of Quebec C. Uses a mix of case law and statute law D. Covers every area of law, including insurance contracts

D. Covers every area of law, including insurance contracts

10. Umbrella policies provide which of the following? A. Reasonable rates for a secondary liability policy B. Contingent liability coverage with no exclusions C. Coverage for all personal and commercial risks subject to SIR D. Excess insurance over underlying policies, high limits, and wide territorial limits, usually worldwide

D. Excess insurance over underlying policies, high limits, and wide territorial limits, usually worldwide

7. As an insurance enterprise, an insurance agency is regulated by the authority provided within the A. Insurance Companies Act. B. Highway Traffic Act. C. Criminal Code of Canada. D. Insurance Act.

D. Insurance Act.

3. Which of the following statements best describes premises liability? A. It affects all trespassers according to the Supreme Court factors. B. It is the responsibility of the building and land owners, even if they do not occupy the premises. C. It is regulated with by-laws according to the Municipality Act. D. It arises out of the use of physical premises, such as a building, the land on which it stands, or both, from an owner, a landlord, or a tenant.

D. It arises out of the use of physical premises, such as a building, the land on which it stands, or both, from an owner, a landlord, or a tenant.

4.Which of the following statements is true of brokers? A.They can be independent or direct writers. B.They work in the online environment only. C.They have a very broad coverage allowing them to underwrite, issue policies, and settle claims. D.They act on behalf of the insured, placing business with insurance companies.

D. They act on behalf of the insured, placing business with insurance companies.

10. Agents and brokers have duties to both their insurers and the clients they service. Which of the following duties is owed to the insurer? A. Not to be swayed by remunerative gain B. To competently perform services undertaken, which requires them to be well educated and indicates the need for continuing education C. To hold information in strict confidence D. To be honest and trustworthy

D. To be honest and trustworthy

4. When reviewing clients' business liability exposures, which of the following is it most useful to consider? A. Their yearly business revenue and expenses B. Their client base for services and product sales C. What losses they have had in the past D. What is done both on the insured premises and away at other locations, products liability exposures, and completed operations exposures

D. What is done both on the insured premises and away at other locations, products liability exposures, and completed operations exposures

5. What information is required to insure a rental property? A. The age of the dwelling and whether the building services have been updated B. Whether the homeowner provides tenants with insurance for tenants' contents C. The amount of rental income collected per annum by the insured D. Whether the tenants are required to have their own insurance

D. Whether the tenants are required to have their own insurance