RIBO Exam
A Commercial Crime Insurance Policy
allows the selection of coverages from a menu.
Which of the following actions is NOT prohibited under the RIB Act?
Giving a policyholder a box of chocolates at Christmas.
In arranging an insurance contract, the broker must always
pass on all relevant information, whether requested or not.
Unearned premiums are used to
pay the insured this amount if the policies are cancelled.
The assignment of an insurance policy would be automatic in which of the following cases?
A goes bankrupt and B is appointed trustee in bankruptcy.
If an insured is charged and convicted of impaired driving as a result of a not-at-fault accident, and sustains both injury and property damage, with respects to accident benefits, which of the following would be correct?
Everything except weekly income benefits, non-earner and compensation for other benefits would be paid.
In the insurance industry, which of the following best describes an "intermediary"?
Licensed business persons representing the insurance company to a client or potential clients.
A contractor has given a Performance Bond, but is now unable to complete the contract due to bankruptcy. The surety will do which of the following?
Make arrangements with the Obligee.
Policyholders pay premiums to an insurance company. Which of the following is the primary responsibility of the insurance company?
Manage the funds and pay losses covered by it to those members who suffer them
Under the Third Party Liability coverage, the insurer does not agree to:
Pay post-judgement interest on that part of a judgement that is excess of the policy limits.
Underwriting can best be described as the:
Selection of risks to insure.
In addition to completing an application for renewal of registration annually, insurance brokers must also advise RIBO of which of the following?
When changing employment from one brokerage to another.
General damages are best described as:
awarded for pain and suffering or disfigurement.
Personal Injury Liability under the Commercial General Liability Policy covers sums that the insured becomes legally obligated to pay
because of injury to a person's character by such things as false arrest or malicious prosecution.
Provincial regulations regarding an agent's handling of premium funds stipulates that the business must have
both an operating account and a trust account.
What is pure premium?
Required amount to meet the losses that occur.
The Manager, under the RIBO Act, may cancel the license of a member for non-payment of any prescribed fee after giving the member at least:
1 month notice in writing of the default and intention to cancel the registration subject to the continuing jurisdiction of the Corporation.
Which statement describes the law of large numbers?
Affects the reliance to be placed on a given probability.
Which statement describes the purpose of a fiduciary bond?
A bond that protects the financial interests of a person who relies on another to manage property/affairs.
RIBO is best described as:
A self-regulatory body operating under the authority of the Province of Ontario
The insured's three-year-old living room couch was damaged in a fire. The claim was settled by establishing the replacement cost and then deducting for physical depreciation. This is an example of:
Actual Cash Value.
An insurer's retention on any one risk can be defined as being the:
Amount of insurance it will keep for its own account.
Which of the following is an example of salvage upholding the principal of indemnity?
An insured has a fire in his kitchen; it is completely destroyed. The smoke from the fire damages the living room furniture. The insured is given the amount to rebuild the kitchen and to replace the living room furniture. The insurer takes the old furniture, pays for the cleaning and sells it for as much as it can on the market.
Under the Commercial Building, Equipment and Stock - Named Perils Form, the items used for maintenance and building services are covered under the:
Building section.
In Ontario, which of the following is not a part of the verbal threshold definition.
Catastrophic impairment.
Which of the following automobile documents must be approved by the Superintendent of Insurance?
Endorsement form, application forms and Policy forms.
An insurer insures a particular risk for $1,000,000, but only wishes to retain $250,000 (25%) for its own account. It offers $750,000 (75%) to a reinsurance company. This is an example of:
Facultative reinsurance.
Which of the following is not a function of reinsurance?
Financing.
The general purpose of the liability section of the policy is to give the insured protection for:
Injuries caused to others when an insured is negligent and held legally liable.
Which of the following occupations is considered registered under the RIB Act?
Insurance brokers in Ontario who place business with several insurers
The main role of the agent or broker in arranging an insurance contract:
Is acting as the middleman between the parties involved.
Which of the following is true of the Newly Acquired Articles Clause under Personal Articles Coverage?
It automatically extends coverage to newly acquired articles reported within 30 days.
Which of the following is true with respect to misrepresentation?
It includes non-disclosure by the insured.
Which of the following statements best describes subrogation?
It is the legal process by which an insurer who has paid a loss, pursues any rights of recovery against a responsible third party.
The main benefit of a mortgage clause is that:
It protects the mortgagee in the event of a loss, even if the insured breaches a policy condition.
Liability policies pay:
Legitimate claims up to the policy limits, as well as legal costs and certain other expenses, in addition to the policy limit.
An insurance broker whose registration is restricted to acting under supervision may perform which of the following?
May solicit insurance to members of the public anywhere in Ontario.
According to the Statutory Conditions in a habitational insurance policy, after a loss, an insured
Must provide the insurer with a proof of loss as soon as possible.
Liability insurance provides coverage for claims arising from:
Negligent acts.
Insurable interest is best described as:
People who stand in such relationship to property that they may be financially prejudiced by its loss and financially benefit from its continuing existence.
When collecting a premium deposit, an agent/broker is required to do which of the following?
Place the deposit in the trust account.
In an OAP 1, third party liability coverage is:
Primary.
The law makes a bailee:
Responsible for damage to the owner's property, unless the bailee can prove the damage was not caused by the bailee's negligence.
The Peak Season Endorsement, which is used to increase stock coverage at specified times of the year, is most effective for:
Retail risks where stock values fluctuate seasonally.
Contribution is best described as:
Sharing of loss or liability between two or more insurance companies.
Which of the following sources of entitlement outside the auto policy may not be deducted as a collateral benefit when calculating the amount of weekly income replacement benefits payable to an insured person as a result of an auto accident in Ontario?
Sick leave of unemployment insurance benefits that are available to an insured person but have not yet been received.
A mortgagor
Similar to a lessee.
Who, from among the following, would not be covered under the Third Party Liability coverage?
Somebody who steals the automobile next door.
The components that reinforce the Principal of Indemnity are:
Subrogation, contribution and salvage.
What is the legal process by which an insurer pursues any rights of recovery against a responsible third party called?
Subrogation.
You insure a new home in the country. It is twelve miles from town and has no available fire protection. You write one single policy for $1,000,000. However, since none of the companies you write business for would agree to insure the risk for the whole amount, you find coverage for it by using three companies. This is know in the insurance industry as:
Subscription policy.
What does direct compensation mean as it relates to automobile insurance?
That an insured will deal only with their own insurer for all automobile damage claims.
Misrepresentation discovered by an insurer may result in the policy being voided. To do so successfully, the insurer must show
That the misrepresented fact was material to the risk.
When news is received indicating that a member may be incapacitated, the information is first referred to:
The Manager.
The statutory conditions are set out by:
The Provincial Act.
The Insurance Act outlines the procedure to be followed when an Insurer issues a policy that is different from the written application. Which of the following is true?
The insurer is to notify the insured of the difference in the policy in writing, if the insured does not object to the change within a stated period of time, the policy is deemed to provide coverage as issued.
When a broker has decided to change their place of employment who is supposed to notify RIBO?
The broker within 30 days of the change.
The regulations under the RIB Act require an insurance broker to provide evidence that insurance has been placed on behalf of a client by
The correct answer is: a policy or certificate of coverage to the member of the public from whom he/she acts within twenty-one (21) days after the placing of the insurance.
Federal legislation/control is most interested in which of the following?
The financial stability of all licensed insurers.
In the insurance business, reserves are:
The funds required by regulators to be set aside for specific purposes.
An insurance broker owns and operates a real estate agent's office and gives his real estate agents a commission for insurance leads and referrals. Choose the best answer:
The insurance broker has to have his RIBO license.
Which of the following is not covered under the liability section of the homeowner's policy?
The insured picks up a hot pot from the stove and is badly burnt by it causing her to miss several days of work.
Mary Mason loses control of her automobile, crashes through John Jones' fence, and destroys his beautiful oak tree. From whom will Jones, who does not carry home insurance, collect for the damage to the fence and loss of the tree?
The insured who is held liable.
Which of the following statements is NOT true with regard to the responsibilities the insureds and insurers have relating to losses (Statutory Conditions)?
The insurer does not have to notify the insured in writing of intent to repair.
An insurer's calculation of pure premium should consider:
The loss statistics.
When comparing the Secondary and Seasonal Residence Fire and Extended Coverage forms, most of the insureds perils are the same. What peril is included in the Secondary form and is not in the Seasonal Residence form?
The peril of vandalism or malicious acts.
Which of the following is not one of the rules governing the process of Offer and Acceptance?
There must be a definite offer made, this includes an invitation to make a deal.
Which of the following is false with respect to an Umbrella Liability policy?
They are only sold to business to avoid gaps in their liability coverage.
Professional bailees owe a greater degree of care than do gratuitous bailees because:
They hold other people's property for a fee.
The responsibility of a plaintiff would be to:
This person must prove the link between fault and damage arising out of an automobile accident.
Which of the following is not a purpose of the hotline?
To provide contact information for the nearest financial institution.
The main purpose of the Federal Insurance Act is:
To regulate and monitor federally licensed as well as foreign insurance companies, in order to ensure their financial integrity.
Which of the following statements about the Facility Association is false?
Underwriting and claims functions for facility business provided by all insurance companies operating in Ontario.
Which ways do insurance companies try to obtain a balanced "spread of risk"?
Volume, diversity of type of risk, diversity of location.
When cancelling automobile insurance, the insurance company can only cancel for reasons filed when the policy has been in effect for less than 60 days. When the policy has been in effect for more than 60 days, the insurance company can only cancel for one of the following reasons, except:
When the insurer did not proceed with due diligence with respect to the background information of the client and found out that there were some outstanding parking tickets and a moving violation.
If information on the latest filed application to RIBO becomes obsolete, the member must file a notice correcting the information
Within 30 days of the change
Insurance companies must make claim settlement payments for the death and funeral accident benefit to an insured:
Within 30 days.
An agent is responsible for performing which of the following tasks?
Writing classes of business acceptable to the insurer they represent
Upon successful completion of the examination, you may qualify for registration as an insurance broker. If issued, the registration will be "restricted to acting under supervision." Which one (1) of the following most accurately describes the conditions under which you may act as an insurance broker under supervision?
You may not act as a sole proprietor, nor be a "Principal Broker" as the term is used in the regulation, nor may you control trust funds.
OPCF 16—Suspension of Coverage Endorsement is used for:
an insured who asks her broker to delete all coverage from her only automobile since she is going south for three months during the winter.
Special damages are best described as:
for out-of-pocket medical expenses.
Subscription policy is described best as:
more than one insurer participates in a policy prepared by the lead company.
Rules or agreements concerning the binding of coverage by brokers are
set out and agreed upon between the insurance company and the broker office.
An independent agent or broker must maintain a trust account so that
net premiums are paid to insurers.
A driver's policy is best described as:
provides liability coverage to a driver who does NOT own an automobile but requires coverage for other automobiles.
With respect to the Outboard Motors/Boats coverage, a Full Average Clause
relates an insurer's share of a loss to the adequacy of the amount of insurance.
The Commercial Liability hazard, Completed Operations, refers to
situations where the insured performs some work which is defective and causes injury to persons or property.
An express contract can be best described as:
terms of the agreement have been specifically stated and agreed to by both.
A threshold is best described as:
the conditions under which an injured person can sue the responsible motorist in Ontario.
Misrepresentation discovered by an insurer may result in the policy being voided. To do so successfully, the insurer must show
the misrepresented fact was material to the risk.