Question 1

According to the Statutory Conditions of an Automobile Policy (O.A.P. 1), if the insurer chooses to terminate the policy, they must provide a refund of the unearned premium. How must this refund be calculated?

Options :

A : On a short-rate basis, allowing the insurer to keep an administrative fee.

B : On a pro-rata basis, representing the exact proportion of the unused premium.

C : On a flat-rate basis, regardless of the time remaining in the policy term.

D : The insurer is not required to provide a refund if the termination is due to a claim.

Answer: B

Question 2

The RIBO Code of Conduct is outlined in Ontario Regulation 991, Section 14. Which provision is NOT outlined in the Code of Conduct?

Options :

A : To maintain a Trust Account for all trust money received.

B : To be both candid and honest when advising the member's client.

C : Not to charge or accept any fee which is not fully disclosed prior to the service being rendered.

D : To be competent to perform the services which the member undertakes on the client's behalf.

Answer: A

Question 3

Under the Registered Insurance Brokers (RIB) Act, what must a brokerage do to ensure compliance with trust accounting requirements?

Options :

A : Provide a monthly statement of account to each insurance company they represent.

B : Maintain a general account with a minimum balance specified by RIBO.

C : Maintain a separate trust account for premiums collected from clients.

D : Restrict access to trust accounts to licensed Brokers only.

Answer: C

Question 4

A broker discovers the client does not have sewer back up coverage, and that the location now qualifies for it. What should the broker do next?

Options :

A : Notify the client 30 days prior to renewal, offer to quote & add.

B : Immediatley add the coverage, notify the client.

C : Notify the client immediately, quote sewer backup, offer to add.

D : Notify the client 60 days prior to renewal, offer to quote & add.

Answer: C

Question 5

According to the Statutory Conditions of a Fire Policy, Statutory Condition 2 - Property of Others states that the insurer is NOT liable for property owned by others unless:

Options :

A : The property is worth less than $500.

B : The interest of the insured in that property is specifically stated in the contract.

C : The property is located in the insured’s backyard.

D : The owner of the property also has their own insurance.

Answer: B