Fundamentals of Insurance Chapter 3 Questions & Answers (SCORED A+)

What is the role of the federal Government when insurers receive federal licensing? - ANWER-Licensing provided only to companies that can meet strict financial standards. Established by the office of the Superintendent of Financial Institutions (OSFI). Insurers are monitored on an ongoing basis. What is the role of the provincial Government? - ANWER-The superintendent of Insurance in each province are responsible for administrating the Insurance Act. Responsibilities include supervising terms and conditions of contracts, licensing of insurers and monitoring financial stability of insurers. What is the role of the Property and Casualty Insurance Compensation Corporation (PACICC)? - ANWER-When bankruptcy occurs, PACICC pays all valid claims. Insurer's are then charged an assessment to cover the total amount of claims. What are the amounts available to consumers from the PACCIC? - ANWER-A max of $250,000 for all claims arising from a single occurrence and a refund of up to 70% of unearned premiums, a max of $700 per policy. What is the definition of Fiduciary? - ANWER-One who handles other people's money. Who is Fiduciary? - ANWER-Insurers and brokers. What is the fiduciary responsibility of insurers? - ANWER-Premiums paid to insurers are not fully earned until policy expires. Unearned premiums are considered to be held in trust in event of cancellation prior to policy expiration. What is the fiduciary responsibility of insurance brokers? - ANWER-Commissions not fully earned until policy expires. Unearned commissions are considered to be held in trust in event of cancellation prior to policy expiration. What are the 6 contents of all insurance policies? - ANWER-1. Parities to Contract 2. Policy Period 3. Loss Payable or Payee 4. Type(s) of Insurance Coverage(s) and Amounts Insurer may be liable 5. Rate and Premium 6. Subject Matter Explain Parties to Contract. - ANWER-Name of insurer and insured are required to be shown. Insured first to contract, Insurer se