IIC Certification Exams Pack
Everything from Basic, plus:
- Exam Name: Principles and Practice of Insurance
- 100 Questions Answers with Explanation Detail
- Total Questions: 100 Q&A's
- Single Choice Questions: 96 Q&A's
- Multiple Choice Questions: 4 Q&A's
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[Regulatory Framework]
Huronial Insurance Company submitted incorporation documents and received approval to sell personal-lines property and automobile policies. Which document will the Office of the Superintendent of Financial Institutions (OSFI) issue?
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B
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Explanation
To operate as a federally regulated insurance company in Canada, an insurer must receive authorization from OSFI after meeting all incorporation and capital requirements. Once OSFI is satisfied that the insurer has complied with statutory conditions, it issues an Order to Commence and Carry On Business—commonly referred to as an order of commencement. This document grants the insurer the legal authority to start underwriting and selling insurance in Canada. Option A is not an official document under Canadian insurance regulation. Option C does not exist in federal insurance legislation. Option D is incorrect because the establishment of an insurer is handled through incorporation documents, not a post-approval "establishment" certificate. Therefore, the correct OSFI authorization document is B: Order of commencement. |
[Introduction to Risk and Insurance]
Which action reduces a hazard?
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A
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Explanation
A hazard is a condition that increases the likelihood or severity of a loss. Installing anti-slip flooring reduces the chance of slips and falls, thereby reducing a hazard. This is an example of loss prevention—altering physical conditions to make an environment safer. Option B increases danger because high beams on a busy highway can blind other drivers. Option C significantly increases fire hazard because sprinkler systems provide automatic fire suppression. Option D exposes items to damage during transit, increasing rather than decreasing hazard. Therefore, the only option that clearly reduces a hazard is A: installing anti-slip floor tile.
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[Insurance Documents and Processes]
Whose signatures wouldusuallyappear on therisk’s policy?
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A
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Explanation
Apolicyis a legal contract issued by theinsurer, not the broker and not the policyholder. Therefore, the individuals who sign the policy are usually the insurer’s authorized signing officers. These are typically: The CEO or President, and Another authorized senior officer, such as the Administrative Manager or Underwriting Officer. In the table: Cathy(CEO) is an authorized signer. Alan(Administrative Manager) is also an authorized insurer representative. The insured (Simone) doesnotsign the actual policy document; their signature is not required for the policy to be valid. The broker (Denis) also doesnotsign policies; he facilitates placement but is not a party to the contract. Thus, the correct pair isAlan and Cathy. |
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