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128 Cards in this Set
- Front
- Back
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An event which may cause a loss to occur |
Peril |
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Speculative risk |
Chance of loss or gain |
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Lloyd's of London |
Special writers accept risk on behalf of their members |
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Factory Mutual |
Specialized in the field of fire prevention |
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Declaration |
A statement signed by the insured declaring all information given in the application for insurance is correct |
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Statutory conditions |
Set down by law (Statute) stipulating how the insured and insurer will deal with each other in certain circumstances. Required by law for fire, auto, accident and sick policies |
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Federal dept. Of insurance |
Regulates the financial stability of insurance |
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Agent |
Employed by and works solely for 1 insurance company |
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Broker |
Someone who is independent of any insurance company but who sells insurance for them |
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Fiduciary |
One who is honest and reliable |
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Binding authority |
The power given by the insurance company to brokers they have chosen to represent them. Gives the broker permission to bind the insurance company and insured to a contract |
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Binder |
A written or oral confirmation that an insurance policy is in force |
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Contact |
An agreement entered by 2 or more people that is enforceable by law |
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Consideration |
A form of payment |
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Salvage |
The value property has after a peril damages it |
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Subrogation |
Sign over your right to sue |
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Contribution |
When more than 1 insurer insures the same property and there is a loss, each insurer pays a portion of the loss |
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Insurable interest |
The monetary interest a person may have in a property |
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Adjuster |
A person who represents the insurance company in the investigation and settlement of claims |
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Claim reserve |
Is set when the claim is reported and must be adjusted as the anticipated cost of the claim increases/decreases |
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Direct loss |
Damage caused directly by an insured peril |
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Indirect loss |
The loss of income due to the interruption of a peril |
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Occurrence limit |
A policy that has a million $ limit will pay up to 1 million $ every time a claim occurs |
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Deductible |
An agreed amount by the insured and insurer which the insured person is responsible to pay a loss |
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Actual cash value |
The replacement cost at the time of loss less depreciation |
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Replacement cost |
Coverage that can be purchased on various types of property insurance policies. Only paid out when the item/property destroyed has been replaced |
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Depreciation |
The reduction in value of property due to its age, wear & tear, and obsolescence |
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Judgement |
An order by the courts to pay a determined amount to a person who sued another for breach of contract or for negligence |
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Negligence |
Is the failure to use the degree of care expected of a reasonable and prudent person |
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Pro rata |
Insurance company cancels |
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Short rate |
Insured cancels |
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Time of risk |
If the policy is in place for 10 days, the insurance company will charge for 10 days |
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Unearned premium reserve |
Insurance companies are required to have a special "reserve" fund for this |
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Fraud |
The concealment of facts which should have been made known to the insurance company |
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Misrepresentation |
An incorrect statement made about a material fact in the application for insurance |
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Material fact |
A piece of information that would be a determining factor in whether or not the insurance company would accept/reject risk |
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Non-disclosure |
Failure or refusal to declare or reveal some information that is required to be declared/revealed |
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Void |
To treat as of it never existed |
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Tort |
A legal wrong arising from obligations to others dictated by law, not necessarily set out in the contract |
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Writ |
A document issued by the courts given notice of a legal action initiated against the receiver of the writ |
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Exposure |
A hazard that threatens a risk |
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Hazard |
A condition that may cause a loss to occur. IE, icy steps |
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Bailee |
Someone to whom goods are entrusted with. IE, dry cleaner, auto shop |
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Bailor |
The person who leaves their goods with the bailee |
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Lessee |
The person who rents the car/property (You) |
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Lessor |
The leasing company |
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Mortgagee |
The bank providing the mortgage |
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Mortgagor |
The person taking out the mortgage (you) |
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Lien |
The security interest created by a mortgage or loan against a property/item |
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Mortgage clause |
Protects the rights of the mortgagee who has an insurable interest in the property insured |
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Assignment |
Change of title by: death of a named insured, operation of law, succession |
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Estoppel |
If an insurance company tells an insured a water damage loss is not covered. Then send a contractor to tear out a wall and determine what the cause was. They have given the impression to the insured that they will be covering the loss and as such are stopped from denying the loss. |
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Exclusion |
A specific coverage, property or peril that is specifically not included in a policy |
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General average |
A clause used if cargo has to be jettisoned off of the ship that is carrying it to save the ship and rest of the cargo. All insurers of the remaining cargo cover the loss of the few. |
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Proximate Clause |
The effective and immediate cause of the loss, but not necessarily the last event in a chain of events, but the one that is directly responsible for the loss |
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Rate |
The price of a unit of insurance |
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Retention |
The amount an insurer retains for its own account not including reinsurance |
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Vacant |
A building with no occupants and which the occupants have no intent to return. |
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RIBO |
Registered insurance brokers of Ontario |
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Who does the RIB legislation protect? |
The insurance consumer |
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3 things to qualify as an insurance broker |
Age, exam, no insurance license suspended |
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3 things a broker "acting under supervision" can't do |
Be principal broker, maintain trust account, open own brokerage |
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RIBO licenses expire? |
September 30 every year |
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RIBO licenses renewed? |
August 30 every year |
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If brokers have second occupation? |
Get secondary business exemption |
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Secondary Occupations RIBO allow |
Any that aren't a conflict of interest |
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How often must a broker file a position report |
Twice a year |
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Can broker position reports be filed once a year? |
Yes-request an exemption |
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How much notice will RIBO give prior to spot checks |
30 days |
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How many people sit on the Executive RIBO council? |
13 |
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How many are elected on the RIBO council? |
9 |
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How many are appointed on the RIBO council? |
4 |
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Who appoints the appointees for RIBO? |
Ontario lieutenant governor in council |
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How many committees of RIBO are there? |
7 |
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How many days does one have to update info with RIBO? |
30 days |
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What is a trust account? |
Insurance premium held in trust for the insurance companies |
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How many days does a brokerage have to deposit premium into a trust account? |
3 days |
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Can the discipline committees decisions be made public? |
Yes, unless the committee indicates otherwise |
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How long does RIBO allow brokers to supply a policy or certificate of insurance? |
21 days |
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Information found on a certificate of insurance? |
Named insured, named insurer, coverage type, effective date |
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Continuing education for a principal broker over a year? |
10 hrs |
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Continuing education for other brokers in a year? |
8 hrs |
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Responsibility of the principal broker? |
Supervise other brokers and operations of the brokerage |
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How to get an unrestricted license? (Become principal broker) |
Write 2 three hr exams |
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Equity Capitalization |
Money in the bank |
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How much Equity Capitalization must a sole proprietor have? |
Greater of $2500 or the deductible amount on their errors and omissions |
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How much Equity Capitalization must a corporation have? |
The greater of $5000 or the amount of the error and omissions coverage deductible |
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Errors and omissions coverage a brokerage must carry? |
$1,000,000 |
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Fidelity coverage must a brokerage carry? |
$100,000 |
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Max. Fine for a brokerage for misconduct? |
$25,000 |
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Max fine for individual broker for misconduct? |
$5,000 |
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How many ppl make up a quorum for the RIBO council a majority? |
7, including 1 appointed member |
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What is rebating? |
Allowing client to not pay the full amount of his premium |
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Difference between rebating and clever negotiating? |
Clever negotiating is asking the insurer to issue the policy at a reduced price in return for a lesser commission |
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How long does RIBO require a broker to be licensed before he/she can take the exams to remove restrictions on their license? |
2 years |
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Who is an unlicensed insurer? |
An insurance company not licensed in Ontario |
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What makes insuring with an unlicensed insurer a greater risk? |
Not regulated by the government in Ontario |
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Regulation 991 is concerned with? |
Misconduct |
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When two position reports have to be filed with RIBO, when must they be filed? |
Figures based on fiscal year end and 6 months from fiscal year end with 3 months each time to submit |
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The basic fire policy covers: |
Fire, explosion and lightning |
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Theft of money from the business by a partner cannot be covered under a 3-D policy (dishonesty, destruction, disappearance) TRUE OR FALSE? |
True |
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A peak season endorsement is? |
Is useful for risks that have large fluctuations in stock at specific times |
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The major peril when insuring machinery under boiler and machinery policy is? |
Breakdowns |
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Coinsurance |
Requires insured's to bear a part of every loss of there is inadequate insurance |
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What does blanket form coverage provide? |
One amount of insurance on building, stock and equipment |
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What's included under the definition of building? |
Building, attachments to building, fixtures, fittings & potted plants |
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What is included under the definition of stock? |
Goods for sale, inventory, advertising, packing and wrapping |
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What's included in the definition of equipment? |
Contents, equipment, tenants improvements |
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What is the coverage amount based on for a builders risk? |
Completed value of the building |
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The 3 exclusions on the glass insurance policy? |
Fire. War, and nuclear |
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What signs can be covered under a sign floater? |
Inside and outside signs that are excluded in building policy |
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What does the bylaw exclusion do? |
It excludes the additional cost to rebuild in compliance with bylaws and regulations |
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Two requirements that must be met before the farm rebuilding clause pays the full amount on farm buildings? |
Must be rebuilt within 9 months and within 200ft from original site |
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What form is used to cover stock in a business where the stock values are fairly consistent? Ie, convenience store |
Premium adjustment clause |
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How many months-worth of rental value should be insured? |
12 months, as policy will pay for loss of rental income up to 12 months |
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Coverage that consequential loss Assumption clause provides? |
Covers loss for cold storage units |
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Extra expense business interruption form covers? |
Extra expense to re-establish the business at another location |
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Profits form covers? |
Loss of earnings until profits return to what they were before the loss |
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Who is a guard? |
Someone under 65 and over 17 accompanying a messenger at the direction of the insured |
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What is included in theft coverage? (Commercial) |
Burglary and robbery |
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The 3D policy covers: |
Employee dishonesty, disappearance and destruction of money and securities |
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Three parties to a bond contract? |
The principal: person who takes out the bond, the obligee: the party to whom the obligation is owed, surety: the insurance company |
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Fidelity bonds cover: |
Guarantee the honesty of employees |
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Why would contingent employers liability be required? |
It protects an employer whose employees are not covered by worker's comp. In the event he is deemed liable for their injuries |
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Completed operations covers? |
Faulty workmanship |
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Territorial limit of the commercial umbrella liability policy? |
Worldwide |
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What is a manuscript policy? |
A policy that covers a unique, specific risk |
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What does burglary coverage require? |
That there is a forcible entry before a claim will be paid |
