FUNDAMENTALS OF INSURANCE EXAM
MIDTERM EXAM QUESTIONS WITH
CORRECT ANSWERS 2025
SubrogationG-GcorrectGanswer-
TheGabilityGofGtheGinsurerGtoGstepGintoGtheGshoesGofGtheGinsured,GafterGpayingGcompensation,GandGassume
GtheGlegalGrightsGtoGsueGtheGpartyGtheGcompensatedGpartyGcouldGhaveGsued
InsuranceGbureauGofGCanadaG(IBC)G-GcorrectGanswer-
oGVoluntaryGorganizationGCollectsGinsuranceGstatsG&GprovidesGactuarialGanalysisGtoGmemberGinsurersGCrea
tesGdraftGpolicyGformsGManagesGinter-
companyGagreementsGforGclaimsGsettlementGMonitors/worksGwithGgovernmentGonGinsuranceGlegislation
InsurersGadvisoryGorganizationGIAOG1989G-GcorrectGanswer-ProvidesGriskGinspectionG&GratingsGservices
LossGcontrol:GinspectsGbuildingsGtoGensureGfireGsecurityGstandards
InsuranceGCrimeGPreventionGBureauG(ICPB)G-GcorrectGanswer-oGNot-for-
profitGHelpsGpoliceGdetect,GinvestigateG&GprosecuteGinsuranceGcrimesGvia:GoGFireGUnderwriter'sGInvestigati
onGBureau:GfocusesGonGfireG&GpropertyGlossesGAdjustersGofGmemberGcompaniesGsubmitGreportsGofGlossesG
>G$3000GoGCanadianGAutoGTheftGBureau:GforGprivateGautoGinsuranceGprovincesGInvestigatesGsuspiciousGth
efts,GcarGfires,GandGhelpsGIDGstolenGvehiclesGReportGtoGtheGBureauGfor:GtheftsGnotGrecoveredGinG48Ghrs,Gcur
rentGmodelG&GlastG4GmodelGyearGsalvageGsalesGCasualtyGClaimGIndex
PropertyG&GCasualtyGInsuranceGCompensationGCorporationG-GcorrectGanswer-
CoversGpolicyholdersGevenGwhenGinsurersGgoGbankrupt
<$250,000GperGclaim,GrefundGpremiumsG<70%G<$700G-GcorrectGanswer-
TheGamountGthatGtheGPropertyG&GCasualtyGInsuranceGCompensationGCorporatioinGcoversGpolicholdres
RoleGofGinsuranceG-GcorrectGanswer-isGtoGmitigateGfinancialGriskGbyGspreadingGit
ProvincialGsuperintendentsGofGInsuranceG-GcorrectGanswer-
LicenseGinsurersGthatGoperateGinGtheirGprovince,GsuperviseGtermsGofGinsuranceGcontracts,GmonitorsGfinanc
ialGstatusGofGinsurersGoperatingGinGtheirGprovince
, GovernmentGsolvencyGrequirmentsG-GcorrectGanswer-
InsuranceGcompaniesGmustGhaveGenoughGassetsGtoGcoverGexpectedGliabilties.GCannotGpostGaGbondGorGaddi
tionalGcollateral.
WhenGisGaGpremiumGfillyGearned?G-GcorrectGanswer-
PremiumGearnedGwhenGtheGpolicyGexpires.GUntilGthen,GtheGinsuredGisGstillGentitledGtoGaGrefundGifGtheyGcan
cel.
CoinsuranceG-GcorrectGanswer-
RequirementGthatGtheGinsuredGpurchaseGaGlimitGofGinsuranceGofGatGleastGsomeGpercentGofGinsuredGvalues.
GEg.G$1,000,000GpropertyGw/G70%GcoinsuranceG=GaGminimumGlimitGofG$700,000Grequired.
CoinsuranceGformulaG-GcorrectGanswer-
(amountGheGdidGbuy/amountGheGshouldGhaveGbought)GxGlossGamount
TheGwaiverGofGcoinsuranceG-GcorrectGanswer-
CoinsuraceGclause/penaltyGwillGonlyGapplyGtoGpartialGlossesGgreaterGthanG2GpercentGofGhisGamountGofGinsu
ranceGorG$5000
RequiredGbyGinsuranceGactGonGdeclarationGpageG-GcorrectGanswer-
PartiesGtoGtheGcontractGmustGbeGidentified,GpolciyGperiod,GsubjectGmatterGofGinsurance
!2:01GAMGstandardGtimeGatGtheGaddressGofGtheGnameGinsuredG-GcorrectGanswer-
AccordingGtoGtheGinsuranceGactGwhenGdoesGaGpolicyGstart?
WhatGisGcoveredGunderGbasicGfireGpolicy?G-GcorrectGanswer-
OnlyGexplosionsGofGnatural,Gcoal,GorGmanufacturedGgas
insurerG-GcorrectGanswer-WHoGhasGtoGgiveGwrittenGnoticeGwhenGcancellingGaGpolicy,
60G-GcorrectGanswer-AfterGreceivingGproofGofGloss,GhowGmanyGdaysGdoesGtheGinsurerGhaveGtoGpayGlosses?
MIDTERM EXAM QUESTIONS WITH
CORRECT ANSWERS 2025
SubrogationG-GcorrectGanswer-
TheGabilityGofGtheGinsurerGtoGstepGintoGtheGshoesGofGtheGinsured,GafterGpayingGcompensation,GandGassume
GtheGlegalGrightsGtoGsueGtheGpartyGtheGcompensatedGpartyGcouldGhaveGsued
InsuranceGbureauGofGCanadaG(IBC)G-GcorrectGanswer-
oGVoluntaryGorganizationGCollectsGinsuranceGstatsG&GprovidesGactuarialGanalysisGtoGmemberGinsurersGCrea
tesGdraftGpolicyGformsGManagesGinter-
companyGagreementsGforGclaimsGsettlementGMonitors/worksGwithGgovernmentGonGinsuranceGlegislation
InsurersGadvisoryGorganizationGIAOG1989G-GcorrectGanswer-ProvidesGriskGinspectionG&GratingsGservices
LossGcontrol:GinspectsGbuildingsGtoGensureGfireGsecurityGstandards
InsuranceGCrimeGPreventionGBureauG(ICPB)G-GcorrectGanswer-oGNot-for-
profitGHelpsGpoliceGdetect,GinvestigateG&GprosecuteGinsuranceGcrimesGvia:GoGFireGUnderwriter'sGInvestigati
onGBureau:GfocusesGonGfireG&GpropertyGlossesGAdjustersGofGmemberGcompaniesGsubmitGreportsGofGlossesG
>G$3000GoGCanadianGAutoGTheftGBureau:GforGprivateGautoGinsuranceGprovincesGInvestigatesGsuspiciousGth
efts,GcarGfires,GandGhelpsGIDGstolenGvehiclesGReportGtoGtheGBureauGfor:GtheftsGnotGrecoveredGinG48Ghrs,Gcur
rentGmodelG&GlastG4GmodelGyearGsalvageGsalesGCasualtyGClaimGIndex
PropertyG&GCasualtyGInsuranceGCompensationGCorporationG-GcorrectGanswer-
CoversGpolicyholdersGevenGwhenGinsurersGgoGbankrupt
<$250,000GperGclaim,GrefundGpremiumsG<70%G<$700G-GcorrectGanswer-
TheGamountGthatGtheGPropertyG&GCasualtyGInsuranceGCompensationGCorporatioinGcoversGpolicholdres
RoleGofGinsuranceG-GcorrectGanswer-isGtoGmitigateGfinancialGriskGbyGspreadingGit
ProvincialGsuperintendentsGofGInsuranceG-GcorrectGanswer-
LicenseGinsurersGthatGoperateGinGtheirGprovince,GsuperviseGtermsGofGinsuranceGcontracts,GmonitorsGfinanc
ialGstatusGofGinsurersGoperatingGinGtheirGprovince
, GovernmentGsolvencyGrequirmentsG-GcorrectGanswer-
InsuranceGcompaniesGmustGhaveGenoughGassetsGtoGcoverGexpectedGliabilties.GCannotGpostGaGbondGorGaddi
tionalGcollateral.
WhenGisGaGpremiumGfillyGearned?G-GcorrectGanswer-
PremiumGearnedGwhenGtheGpolicyGexpires.GUntilGthen,GtheGinsuredGisGstillGentitledGtoGaGrefundGifGtheyGcan
cel.
CoinsuranceG-GcorrectGanswer-
RequirementGthatGtheGinsuredGpurchaseGaGlimitGofGinsuranceGofGatGleastGsomeGpercentGofGinsuredGvalues.
GEg.G$1,000,000GpropertyGw/G70%GcoinsuranceG=GaGminimumGlimitGofG$700,000Grequired.
CoinsuranceGformulaG-GcorrectGanswer-
(amountGheGdidGbuy/amountGheGshouldGhaveGbought)GxGlossGamount
TheGwaiverGofGcoinsuranceG-GcorrectGanswer-
CoinsuraceGclause/penaltyGwillGonlyGapplyGtoGpartialGlossesGgreaterGthanG2GpercentGofGhisGamountGofGinsu
ranceGorG$5000
RequiredGbyGinsuranceGactGonGdeclarationGpageG-GcorrectGanswer-
PartiesGtoGtheGcontractGmustGbeGidentified,GpolciyGperiod,GsubjectGmatterGofGinsurance
!2:01GAMGstandardGtimeGatGtheGaddressGofGtheGnameGinsuredG-GcorrectGanswer-
AccordingGtoGtheGinsuranceGactGwhenGdoesGaGpolicyGstart?
WhatGisGcoveredGunderGbasicGfireGpolicy?G-GcorrectGanswer-
OnlyGexplosionsGofGnatural,Gcoal,GorGmanufacturedGgas
insurerG-GcorrectGanswer-WHoGhasGtoGgiveGwrittenGnoticeGwhenGcancellingGaGpolicy,
60G-GcorrectGanswer-AfterGreceivingGproofGofGloss,GhowGmanyGdaysGdoesGtheGinsurerGhaveGtoGpayGlosses?
