C130 CIP EXAM – QUESTIONS AND CORRECT ANSWERS
06/11/2026
STUDY GUIDE
C130 CIP Exam – Questions and Correct Answers Study Guide, Exams of
Insurance Economics
Which of the following has been traditionally offered by insurance companies, but is not actually
insurance?
Surety bonds
The court case, Fine's Flowers Ltd. vs. General Accident Assurance Co. of Canada (1977), is significant
because it
increased the duty of care required by insurance intermediaries when acting within their scope of
duty.
With respect to Utmost Good Faith,
full disclosure of material information is required by all parties.
Cold calls
are excellent practice for talking to people to discover their needs.
Brokers use this technique to provide existing clients with new policies covering additional exposures.
Up-selling
6/11/2026
A system established to monitor files to ensure that action is taken within the appropriate time is known
as
1
, C130 CIP EXAM – QUESTIONS AND CORRECT ANSWERS
06/11/2026
STUDY GUIDE
abeyance.
The process by which detrimental effects of a risk are minimized by identifying, measuring and
controlling the-risk is known as
risk management.
The unlawful taking of insured property from within the insured premises by a person who unlawfully
enters the premises as evidenced by marks of forcible entry is termed
burglary.
A disadvantage of oral applications is that they
might not record all the discussions between the broker and the insured.
A broker might identify a client with a potential accounts recelvable problem by reviewing the section of
the insurance application disclosing the
loss payees.
When an applicant for insurance has been involved in one previous not-at-fault loss in which her vehicle
was damaged, an insurer who is writing a policy for the risk may
apply standard terms and conditions based on the exposure.
6/11/2026
Binding authority
allows the broker to bind some limited coverage immediately.
2
, C130 CIP EXAM – QUESTIONS AND CORRECT ANSWERS
06/11/2026
STUDY GUIDE
The legal concept by which any ambiguity in the policy wording will be interpreted against the party that
wrote the wording is
contra preferentem.
The signature clause of a policy consists of signatures of the
chief executive of the insurance company and the broker or authorized employee of the insurer.
Condominium corporations arrange insurance for
the common areas of the building.
Under most seasonal dwelling forms, insurance limits for outbuildings
are part of the limit of coverage for the main building.
Under the terms of guaranteed replacement cost, the insurer will pay the full cost to rebuild the dweling
even if it exceeds the amount of insurance purchased provided that the
amount insured was 100% of the replacement cost at the last evaluation.
The legal term defined as the substantial and unreasonable interference with a person's right to enjoy
and use his or her property is
nuisance.
6/11/2026
3
06/11/2026
STUDY GUIDE
C130 CIP Exam – Questions and Correct Answers Study Guide, Exams of
Insurance Economics
Which of the following has been traditionally offered by insurance companies, but is not actually
insurance?
Surety bonds
The court case, Fine's Flowers Ltd. vs. General Accident Assurance Co. of Canada (1977), is significant
because it
increased the duty of care required by insurance intermediaries when acting within their scope of
duty.
With respect to Utmost Good Faith,
full disclosure of material information is required by all parties.
Cold calls
are excellent practice for talking to people to discover their needs.
Brokers use this technique to provide existing clients with new policies covering additional exposures.
Up-selling
6/11/2026
A system established to monitor files to ensure that action is taken within the appropriate time is known
as
1
, C130 CIP EXAM – QUESTIONS AND CORRECT ANSWERS
06/11/2026
STUDY GUIDE
abeyance.
The process by which detrimental effects of a risk are minimized by identifying, measuring and
controlling the-risk is known as
risk management.
The unlawful taking of insured property from within the insured premises by a person who unlawfully
enters the premises as evidenced by marks of forcible entry is termed
burglary.
A disadvantage of oral applications is that they
might not record all the discussions between the broker and the insured.
A broker might identify a client with a potential accounts recelvable problem by reviewing the section of
the insurance application disclosing the
loss payees.
When an applicant for insurance has been involved in one previous not-at-fault loss in which her vehicle
was damaged, an insurer who is writing a policy for the risk may
apply standard terms and conditions based on the exposure.
6/11/2026
Binding authority
allows the broker to bind some limited coverage immediately.
2
, C130 CIP EXAM – QUESTIONS AND CORRECT ANSWERS
06/11/2026
STUDY GUIDE
The legal concept by which any ambiguity in the policy wording will be interpreted against the party that
wrote the wording is
contra preferentem.
The signature clause of a policy consists of signatures of the
chief executive of the insurance company and the broker or authorized employee of the insurer.
Condominium corporations arrange insurance for
the common areas of the building.
Under most seasonal dwelling forms, insurance limits for outbuildings
are part of the limit of coverage for the main building.
Under the terms of guaranteed replacement cost, the insurer will pay the full cost to rebuild the dweling
even if it exceeds the amount of insurance purchased provided that the
amount insured was 100% of the replacement cost at the last evaluation.
The legal term defined as the substantial and unreasonable interference with a person's right to enjoy
and use his or her property is
nuisance.
6/11/2026
3
