Question 1

Risk may be dealt with in a number of ways including transferring it to others or retaining it intentionally. Which of the following alternatives is a transfer of risk?

Options :

A : A monitored security system.

B : Self-insurance.

C : An agreement of purchase and sale.

D : Purchase of insurance.

Answer: D

Question 2

Certain Accident Benefits limits under O.A.P. 1 Owner's Policy can be increased or extended at the option of the insured. What benefit CANNOT be changed?

Options :

A : Death and Funeral Benefits.

B : Income Replacement Benefit.

C : Caregiver Benefit for Catastrophic Injuries.

D : Disability Benefit after Age 65.

Answer: D

Question 3

A broker is approached by a high-net-worth client who wants to place their unique collector car insurance with an unlicensed US-based insurer because the rates are significantly lower. What is the broker's primary obligation?

Options :

A : Place the coverage as requested to ensure the client is satisfied with the savings.

B : Refuse the business because brokers are strictly prohibited from dealing with unlicensed insurers.

C : Advise the client of the risks, obtain a signed "Unlicensed Insurer" disclosure, and ensure no licensed market is available.

D : Tell the client to contact the US insurer directly so the broker can avoid any legal responsibility.

Answer: C

Question 4

Which is NOT a document delivering method to an insured?

Options :

A : Email.

B : Mail.

C : Fax.

D : Electronic Data Interchange (EDI).

Answer: D

Question 5

Your insured's young son has just purchased an automobile and wants you to insure it in his father's name and show himself as an occasional driver. Which of the following steps should you take?

Options :

A : Issue the policy as requested.

B : Decline to issue the policy as the son is obviously the principal driver and registered owner.

C : Place the policy with another insurer and rate the father as the principal driver.

D : Advise the son to register the vehicle in his mother's name and rate it on her driving record.

Answer: B

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