RIBO LEVEL 1 EXAM QUESTIONS AND
ANSWERS
Indemnify - Correct Answers -The action of compensating an insured following a loss
under the insurance policy.
Risk - Correct Answers -The chance of loss;
or an object or activity that is insured (about to be insured)
Peril - Correct Answers -An event that may cause a loss to occur
Object of Insurance - Correct Answers -The item that is insured or covered in an
insurance policy
Indemnity - Correct Answers -to put you back in the same financial position (just prior to
loss) NO BETTER NO WORSE
Provincial Governments who operate compulsory automobile insurance - Correct
Answers -- British Columbia;
- Saskatchewan
- Manitoba
- Quebec (bodily injury only)
Stock Insurance Companies - Correct Answers -Own by stockholders; main goal is to
maximize shareholder value
Mutual Insurance Company - Correct Answers -Own by policy holders; main goal is to
collect sufficient premiums from its policyholder to cover the cost of paying claims and
operation the company.
Departments in an Insurance Company - Correct Answers -1) Business development
2) Underwriting
3) Finance
4) Claims
5) Information technology
Insured / Policy holder - Correct Answers -The person who purchases an insurance
policy
Noted as First Party
, Insurer - Correct Answers -Insurance company who issued the insurance policy and
who compensates/indemnifies a policy holder in the event of a loss
Noted as second party
Premium - Correct Answers -The sum of money paid by a person to an insurance
company in exchange for an insurance policy
RIBO - Registered Insurance Brokers of Ontario - Correct Answers -A Self-governing,
self-funded organization of general insurance brokers in Ontario
RIBO regulates the
- Licensing;
- Professional competence;
- Ethical conduct
- Insurance-related financial obligations
of all independent general insurance brokers in ON through the RIB Act
General Insurance - Correct Answers -- Also referred to as Property and Casualty
(P&C)
- Anything other than Life or Health Insurance
Property risk - Correct Answers -Financial loss occurs when owned property is lost or
damaged
Liability risk - Correct Answers -When a person's negligent actions result in injury to
others or damage to another's property
Negligence - Correct Answers -is what a reasonable and prudence person would do or
not do in a similar situation
Speculative risk - Correct Answers -This is the possibility of either financial loss / gain
--> this is NOT insurable
Pure risk - Correct Answers -The chance of financial loss with no chance of financial
gain.
--> this type of risk IS insurable
Hazards - Correct Answers -is a condition that may cause a peril to occur or make the
loss more severe.
There are 2 types of hazard: Physical hazard
Moral hazard
Physical hazard - Correct Answers -OBSERVABLE condition relating to the object of
insurance
ANSWERS
Indemnify - Correct Answers -The action of compensating an insured following a loss
under the insurance policy.
Risk - Correct Answers -The chance of loss;
or an object or activity that is insured (about to be insured)
Peril - Correct Answers -An event that may cause a loss to occur
Object of Insurance - Correct Answers -The item that is insured or covered in an
insurance policy
Indemnity - Correct Answers -to put you back in the same financial position (just prior to
loss) NO BETTER NO WORSE
Provincial Governments who operate compulsory automobile insurance - Correct
Answers -- British Columbia;
- Saskatchewan
- Manitoba
- Quebec (bodily injury only)
Stock Insurance Companies - Correct Answers -Own by stockholders; main goal is to
maximize shareholder value
Mutual Insurance Company - Correct Answers -Own by policy holders; main goal is to
collect sufficient premiums from its policyholder to cover the cost of paying claims and
operation the company.
Departments in an Insurance Company - Correct Answers -1) Business development
2) Underwriting
3) Finance
4) Claims
5) Information technology
Insured / Policy holder - Correct Answers -The person who purchases an insurance
policy
Noted as First Party
, Insurer - Correct Answers -Insurance company who issued the insurance policy and
who compensates/indemnifies a policy holder in the event of a loss
Noted as second party
Premium - Correct Answers -The sum of money paid by a person to an insurance
company in exchange for an insurance policy
RIBO - Registered Insurance Brokers of Ontario - Correct Answers -A Self-governing,
self-funded organization of general insurance brokers in Ontario
RIBO regulates the
- Licensing;
- Professional competence;
- Ethical conduct
- Insurance-related financial obligations
of all independent general insurance brokers in ON through the RIB Act
General Insurance - Correct Answers -- Also referred to as Property and Casualty
(P&C)
- Anything other than Life or Health Insurance
Property risk - Correct Answers -Financial loss occurs when owned property is lost or
damaged
Liability risk - Correct Answers -When a person's negligent actions result in injury to
others or damage to another's property
Negligence - Correct Answers -is what a reasonable and prudence person would do or
not do in a similar situation
Speculative risk - Correct Answers -This is the possibility of either financial loss / gain
--> this is NOT insurable
Pure risk - Correct Answers -The chance of financial loss with no chance of financial
gain.
--> this type of risk IS insurable
Hazards - Correct Answers -is a condition that may cause a peril to occur or make the
loss more severe.
There are 2 types of hazard: Physical hazard
Moral hazard
Physical hazard - Correct Answers -OBSERVABLE condition relating to the object of
insurance
