RIBO: ENTRY LEVEL 1
Risk - Answer- Chance of a loss
Which type of risk is insured and why? - Answer- Pure risk, because speculative risk is
comparable to gambling.
3 Ways risk (management) is dealt with? - Answer- REDUCE: preventative measures
ASSUME/RETAIN: Self-insure
TRANSFER: purchase insurance
Which of the following is not a risk?
A) Assume or retain risk
B) Reduce the risk
C) Doing nothing / avoiding the risk
D) Transfer the risk - Answer- C) Doing nothing / avoiding the risk
Insurer - Answer- Insurance company
Stock Insurance company - Answer- Owned by shareholders
Mutual insurance company - Answer- Owned by policyholders - Usually smaller, for Ex., One big
claim can flux the premium. Once these companies become big they are titled stockholders.
Co-operative associations - Answer- Not looking to consume profits, these policies are expected to
be cheaper.
Lloyd's of London - Answer- Not an insurance company but rather an insurance market.
Ex. Syndicates are investors for things such as athletes legs, voices etc.
High risk Vs. High reward.
Insured - Answer- Who is covered.
Named insured = policy holder (owner)
What is not included in the general types of insurance? - Answer- Life and Health
Application of insurance includes: - Answer- Bonds, Liability, Accident / sickness, Valued items,
personal articles coverage/floater
Declaration - Answer- Signed approving information provided is the upmost truth
Statutory conditions - Answer- Provincial laws protecting both parties being the insured and the
insurer
Which of the following is the truest regarding effective and expiry date?
A) 12:00AM, Western time at location of insured.
, B) 12:00PM, Standard time at location of insured.
C) 12:01AM, Eastern time at location of insured.
D) 12:01AM, Standard time at location of insured. - Answer- D) 12:01AM, Standard time at
location of insured.
Agent VS Broker - Answer- Agent: Works solely for ONE insurance company.
Broker: Independent of any insurance company but sells insurance for them.
Fiduciary, key word? - Answer- Money.
Binding Authority - Answer- Power given to a broker by a insurance company to sell a policy.
(Company tells you what you can and cannot sell).
Street light Ex.
Green = insured fits
Yellow = insured has some flaws but they may be over seen
Red = Do not ask and do not sell
Binder - Answer- Put insurance in force (Ex. Pink slips), Written or oral confirmation that an
insurance policy is in force.
Contract, Any LEGAL contract must include to make it valid? - Answer- Offer and acceptance
Consideration
Legal capacity
Meeting of the minds
Legality of the object
Which does not belong to the 5 included in a contract?
A) Consideration
B) Client signature
C) Meeting of the minds
D) Offer and acceptance - Answer- B) Client signature
Which 3 elements are needed for an insurance contract on top on the five previously reviewed. -
Answer- 1. Good faith / Utmost good faith
2. Indemnity
3. insurable interest .. Don't own it = cannot insure it
Indemnity - Answer- Put client back into the same spot they were in financially before the loss.
Explain the 3 doctrines that uphold the principle of indemnity - Answer- Salvage: Can't get paid
and keep the damaged.
Subrogation: Sign over your rights to sue, cannot get paid and sue.
Contribution: Allowed to have more than one policy but are not allowed to get paid more than
once.
Explain indirect and direct loss? - Answer- Direct is damage caused by an insured peril Ex.,
Getting hit by another vehicle, building burning to the ground.
Indirect is financial loss from the direct loss
Risk - Answer- Chance of a loss
Which type of risk is insured and why? - Answer- Pure risk, because speculative risk is
comparable to gambling.
3 Ways risk (management) is dealt with? - Answer- REDUCE: preventative measures
ASSUME/RETAIN: Self-insure
TRANSFER: purchase insurance
Which of the following is not a risk?
A) Assume or retain risk
B) Reduce the risk
C) Doing nothing / avoiding the risk
D) Transfer the risk - Answer- C) Doing nothing / avoiding the risk
Insurer - Answer- Insurance company
Stock Insurance company - Answer- Owned by shareholders
Mutual insurance company - Answer- Owned by policyholders - Usually smaller, for Ex., One big
claim can flux the premium. Once these companies become big they are titled stockholders.
Co-operative associations - Answer- Not looking to consume profits, these policies are expected to
be cheaper.
Lloyd's of London - Answer- Not an insurance company but rather an insurance market.
Ex. Syndicates are investors for things such as athletes legs, voices etc.
High risk Vs. High reward.
Insured - Answer- Who is covered.
Named insured = policy holder (owner)
What is not included in the general types of insurance? - Answer- Life and Health
Application of insurance includes: - Answer- Bonds, Liability, Accident / sickness, Valued items,
personal articles coverage/floater
Declaration - Answer- Signed approving information provided is the upmost truth
Statutory conditions - Answer- Provincial laws protecting both parties being the insured and the
insurer
Which of the following is the truest regarding effective and expiry date?
A) 12:00AM, Western time at location of insured.
, B) 12:00PM, Standard time at location of insured.
C) 12:01AM, Eastern time at location of insured.
D) 12:01AM, Standard time at location of insured. - Answer- D) 12:01AM, Standard time at
location of insured.
Agent VS Broker - Answer- Agent: Works solely for ONE insurance company.
Broker: Independent of any insurance company but sells insurance for them.
Fiduciary, key word? - Answer- Money.
Binding Authority - Answer- Power given to a broker by a insurance company to sell a policy.
(Company tells you what you can and cannot sell).
Street light Ex.
Green = insured fits
Yellow = insured has some flaws but they may be over seen
Red = Do not ask and do not sell
Binder - Answer- Put insurance in force (Ex. Pink slips), Written or oral confirmation that an
insurance policy is in force.
Contract, Any LEGAL contract must include to make it valid? - Answer- Offer and acceptance
Consideration
Legal capacity
Meeting of the minds
Legality of the object
Which does not belong to the 5 included in a contract?
A) Consideration
B) Client signature
C) Meeting of the minds
D) Offer and acceptance - Answer- B) Client signature
Which 3 elements are needed for an insurance contract on top on the five previously reviewed. -
Answer- 1. Good faith / Utmost good faith
2. Indemnity
3. insurable interest .. Don't own it = cannot insure it
Indemnity - Answer- Put client back into the same spot they were in financially before the loss.
Explain the 3 doctrines that uphold the principle of indemnity - Answer- Salvage: Can't get paid
and keep the damaged.
Subrogation: Sign over your rights to sue, cannot get paid and sue.
Contribution: Allowed to have more than one policy but are not allowed to get paid more than
once.
Explain indirect and direct loss? - Answer- Direct is damage caused by an insured peril Ex.,
Getting hit by another vehicle, building burning to the ground.
Indirect is financial loss from the direct loss
