FUNDAMENTALS OF 2025
INSURANCE (BC) EXAM
ANSWER ALL QUESTIONS IN THIS SECTION
QUESTION 1
When dealing with financial risk a person has several options available. In your
opinion, which of the following is the best option for most people?
a. Avoidance of risk
b. Retention of the risk
c. Controlling the risk
d. Transfer of the risk - ANSWERS-d. Transfer of the risk
QUESTION 2
Risk as the "chance of financial loss" can be classified as either speculative or
pure. Which of the following best describes the meaning of pure risk?
a. There is no chance of financial loss
b. There is a chance of financial gain
c. Financial loss and financial gain are both present
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, FUNDAMENTALS OF 2025
INSURANCE (BC) EXAM
d. There is only the chance of financial loss with no chance of profiting from it. -
ANSWERS-d. There is only the chance of financial loss with no chance of
profiting from it.
QUESTION 3
Both, insurance companies and brokers are considered fiduciaries. Under the
Insurance Act the fiduciary responsibility of a broker requires that
a. The broker must regularly remit the collected premiums to the insurers
b. All policies not paid for within sixty (60) days of the effective data must be
terminated
c. Unearned commissions are held in trust to be available should the policy be
terminated before expiry
d. The full amount of the commission must be held in trust until the expiry of the
policy - ANSWERS-c. Unearned commissions are held in trust to be available
should the policy be terminated before expiry
QUESTION 4
The Insurance Act determines when a contract of insurance takes effect. Coverage
commences at
a. 12.01 pm standard time at the address of the Named Insured
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, FUNDAMENTALS OF 2025
INSURANCE (BC) EXAM
b. 12.01 am standard time at the address of the location of the risk
c. 12.01 am standard time at the address of the Insurer
d. 12.01 am standard time at the address of the Named Insured - ANSWERS-d.
12.01 am standard time at the address of the Named Insure
QUESTION 5
The Removal Clause requires the insurer to extend coverage to another location
where the insured property is kept even if this location is not stated on the policy.
Only one of the following situations would quality for this coverage
a. The Insured moved to a new residence five (5) days ago and has not yet advised
the insurer of the new location.
b. The insured keeps furniture and fixtures in a rented storage locker because there
is no more room at the principle residence
c. The Insured moved personal property to a storage facility to protect it from loss
because of an encroaching forest fire
d. The Insured keeps some personal property at her seasonal dwelling but only
during the summer months - ANSWERS-c. The Insured moved personal property
to a storage facility to protect it from loss because of an encroaching forest fire
QUESTION 6
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, FUNDAMENTALS OF 2025
INSURANCE (BC) EXAM
When the insurer has indemnified the insured for a loss caused by a third party, the
insurer has a legal right of recovery from that party. This legal process is referred
to as
a. Arbitration
b. Restitution
c. Subrogation
d. Mediation - ANSWERS-c. Subrogation
QUESTION 7
The Insurance Act provides that a policy insuring the peril of "fire" must also
include coverage for
a. Windstorm and Lightning
b. Lightning, including damage to electrical appliances and devices
c. Lightning and all types of Explosion
d. Explosion of natural, coal or manufactured gas and Lightning, excluding
damage to electrical appliances and devices - ANSWERS-d. Explosion of natural,
coal or manufactured gas and Lightning, excluding damage to electrical appliances
and devices
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INSURANCE (BC) EXAM
ANSWER ALL QUESTIONS IN THIS SECTION
QUESTION 1
When dealing with financial risk a person has several options available. In your
opinion, which of the following is the best option for most people?
a. Avoidance of risk
b. Retention of the risk
c. Controlling the risk
d. Transfer of the risk - ANSWERS-d. Transfer of the risk
QUESTION 2
Risk as the "chance of financial loss" can be classified as either speculative or
pure. Which of the following best describes the meaning of pure risk?
a. There is no chance of financial loss
b. There is a chance of financial gain
c. Financial loss and financial gain are both present
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, FUNDAMENTALS OF 2025
INSURANCE (BC) EXAM
d. There is only the chance of financial loss with no chance of profiting from it. -
ANSWERS-d. There is only the chance of financial loss with no chance of
profiting from it.
QUESTION 3
Both, insurance companies and brokers are considered fiduciaries. Under the
Insurance Act the fiduciary responsibility of a broker requires that
a. The broker must regularly remit the collected premiums to the insurers
b. All policies not paid for within sixty (60) days of the effective data must be
terminated
c. Unearned commissions are held in trust to be available should the policy be
terminated before expiry
d. The full amount of the commission must be held in trust until the expiry of the
policy - ANSWERS-c. Unearned commissions are held in trust to be available
should the policy be terminated before expiry
QUESTION 4
The Insurance Act determines when a contract of insurance takes effect. Coverage
commences at
a. 12.01 pm standard time at the address of the Named Insured
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, FUNDAMENTALS OF 2025
INSURANCE (BC) EXAM
b. 12.01 am standard time at the address of the location of the risk
c. 12.01 am standard time at the address of the Insurer
d. 12.01 am standard time at the address of the Named Insured - ANSWERS-d.
12.01 am standard time at the address of the Named Insure
QUESTION 5
The Removal Clause requires the insurer to extend coverage to another location
where the insured property is kept even if this location is not stated on the policy.
Only one of the following situations would quality for this coverage
a. The Insured moved to a new residence five (5) days ago and has not yet advised
the insurer of the new location.
b. The insured keeps furniture and fixtures in a rented storage locker because there
is no more room at the principle residence
c. The Insured moved personal property to a storage facility to protect it from loss
because of an encroaching forest fire
d. The Insured keeps some personal property at her seasonal dwelling but only
during the summer months - ANSWERS-c. The Insured moved personal property
to a storage facility to protect it from loss because of an encroaching forest fire
QUESTION 6
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, FUNDAMENTALS OF 2025
INSURANCE (BC) EXAM
When the insurer has indemnified the insured for a loss caused by a third party, the
insurer has a legal right of recovery from that party. This legal process is referred
to as
a. Arbitration
b. Restitution
c. Subrogation
d. Mediation - ANSWERS-c. Subrogation
QUESTION 7
The Insurance Act provides that a policy insuring the peril of "fire" must also
include coverage for
a. Windstorm and Lightning
b. Lightning, including damage to electrical appliances and devices
c. Lightning and all types of Explosion
d. Explosion of natural, coal or manufactured gas and Lightning, excluding
damage to electrical appliances and devices - ANSWERS-d. Explosion of natural,
coal or manufactured gas and Lightning, excluding damage to electrical appliances
and devices
END OF
PAGE 4
