General Insurance Essentials ACTUAL
UPDATED QUESTIONS AND CORRECT
ANSWERS
Requirements of contract - CORRECT ANSWERS✅✅Genuine Intent, Legality of Purpose,
Agreement, Capacity to Contract
Elements required for contract to be enforceable at law - CORRECT
ANSWERS✅✅Legality of purpose, Capacity to contract, consideration
Unique elements of Insurance contract - CORRECT ANSWERS✅✅Insurable interest,
Indemnity, Utmost good faith
Statutory conditions - CORRECT ANSWERS✅✅Outline the rules of conduct between the
insured and the insurer
Mandator - CORRECT ANSWERS✅✅Under the Civil code of Quebec- the principal
Statutory conditions are set out by - CORRECT ANSWERS✅✅The Provincial Insurance
Act
Do statutory conditions need to be printed on interim cover notes and binders? - CORRECT
ANSWERS✅✅No. They need to be printed on every other page of the contract
Mandatary - CORRECT ANSWERS✅✅In the civil code of Quebec, the intermediary
(agent/broker)
Proximate Cause - CORRECT ANSWERS✅✅The effective cause of the loss which in a
natural and continuous chain of circumstances leads directly to the loss
The functions of Insurance (x6) - CORRECT ANSWERS✅✅SALSAS
Spread of risk (Diversity of type, diversity of location, Volume)
, Aid in security
Loss prevention activities
Source of capital
Aid to credit
Source of employment
Type of insurance coverage that pays dividends - CORRECT ANSWERS✅✅Stock
companies (and co-operative stock mutual companies on a patronage basis)
Insurance company that is in it for profit - CORRECT ANSWERS✅✅Stock company
Lloyds of London - CORRECT ANSWERS✅✅Insurance market for specialized lines of
business
Two sources of profit for insurance companies - CORRECT ANSWERS✅✅1. Underwriting
gain
2. Investments
Principal-agent relationship - CORRECT ANSWERS✅✅Insurer-Intermediary
Unearned premium - CORRECT ANSWERS✅✅Covers the policy period that has not yet
expired
Mutual insurance company - CORRECT ANSWERS✅✅Is owned by its policyholders also
known as members
A policy (contract) of compensation - CORRECT ANSWERS✅✅States that a preset
(stated) amount is payable on the occurrence of the event insured against. E.g., Life insurance
NOT subject to indemnity
A valued insurance contract - CORRECT ANSWERS✅✅Implies that the amount to be paid
in the event of a loss is determined when the policy is written.
UPDATED QUESTIONS AND CORRECT
ANSWERS
Requirements of contract - CORRECT ANSWERS✅✅Genuine Intent, Legality of Purpose,
Agreement, Capacity to Contract
Elements required for contract to be enforceable at law - CORRECT
ANSWERS✅✅Legality of purpose, Capacity to contract, consideration
Unique elements of Insurance contract - CORRECT ANSWERS✅✅Insurable interest,
Indemnity, Utmost good faith
Statutory conditions - CORRECT ANSWERS✅✅Outline the rules of conduct between the
insured and the insurer
Mandator - CORRECT ANSWERS✅✅Under the Civil code of Quebec- the principal
Statutory conditions are set out by - CORRECT ANSWERS✅✅The Provincial Insurance
Act
Do statutory conditions need to be printed on interim cover notes and binders? - CORRECT
ANSWERS✅✅No. They need to be printed on every other page of the contract
Mandatary - CORRECT ANSWERS✅✅In the civil code of Quebec, the intermediary
(agent/broker)
Proximate Cause - CORRECT ANSWERS✅✅The effective cause of the loss which in a
natural and continuous chain of circumstances leads directly to the loss
The functions of Insurance (x6) - CORRECT ANSWERS✅✅SALSAS
Spread of risk (Diversity of type, diversity of location, Volume)
, Aid in security
Loss prevention activities
Source of capital
Aid to credit
Source of employment
Type of insurance coverage that pays dividends - CORRECT ANSWERS✅✅Stock
companies (and co-operative stock mutual companies on a patronage basis)
Insurance company that is in it for profit - CORRECT ANSWERS✅✅Stock company
Lloyds of London - CORRECT ANSWERS✅✅Insurance market for specialized lines of
business
Two sources of profit for insurance companies - CORRECT ANSWERS✅✅1. Underwriting
gain
2. Investments
Principal-agent relationship - CORRECT ANSWERS✅✅Insurer-Intermediary
Unearned premium - CORRECT ANSWERS✅✅Covers the policy period that has not yet
expired
Mutual insurance company - CORRECT ANSWERS✅✅Is owned by its policyholders also
known as members
A policy (contract) of compensation - CORRECT ANSWERS✅✅States that a preset
(stated) amount is payable on the occurrence of the event insured against. E.g., Life insurance
NOT subject to indemnity
A valued insurance contract - CORRECT ANSWERS✅✅Implies that the amount to be paid
in the event of a loss is determined when the policy is written.
