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

A broker is approached by a high-net-worth client who wants to place their unique collector car insurance with an unlicensed US-based insurer because the rates are significantly lower. What is the broker's primary obligation?

Options :

A : Place the coverage as requested to ensure the client is satisfied with the savings.

B : Refuse the business because brokers are strictly prohibited from dealing with unlicensed insurers.

C : Advise the client of the risks, obtain a signed "Unlicensed Insurer" disclosure, and ensure no licensed market is available.

D : Tell the client to contact the US insurer directly so the broker can avoid any legal responsibility.

Answer: C

Question 3

Which is NOT a document delivering method to an insured?

Options :

A : Email.

B : Mail.

C : Fax.

D : Electronic Data Interchange (EDI).

Answer: D

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

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