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C11_ Principles and Practice of Insurance Questions and Answers
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C11_ Principles and Practice of Insurance Questions and Answers
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C11: Principles and Practice of InsuranceQuestions and Answers
Pure risk - CORRECT ANSWER-Type of risk that can be insured
Speculative risk - CORRECT ANSWER-Risk example: Antoine's new barber
shop
Peril - CORRECT ANSWER-Event leading to a loss
Proximate cause of loss - CORRECT ANSWER-Immediate cause of loss, e.g.,
malfunction leading to damage
Earnings - CORRECT ANSWER-Profit: revenue minus expenses
Cost of risk - CORRECT ANSWER-All pure risk management costs
Social responsibility - CORRECT ANSWER-Objective pre- and post-loss in risk
management
Indemnify - CORRECT ANSWER-Compensate for incurred loss
Premium - CORRECT ANSWER-Insurer's financial contribution
Spread risk - CORRECT ANSWER-Volume, diversity, and location diversification
Unearned premium - CORRECT ANSWER-Unused portion of premium
Inland transportation insurance - CORRECT ANSWER-Covers land transit goods
Life insurance - CORRECT ANSWER-Covers insured's death
Liability insurance - CORRECT ANSWER-Covers losses from various liabilities
Solvency - CORRECT ANSWER-Business's financial commitment ability
, Office of the Superintendent of Financial Institutions - CORRECT
ANSWER-Regulates federally licensed insurers' stability
Insurance Companies Act - CORRECT ANSWER-Regulates insurance company
establishment, operation
Agent and broker licensing oversight - CORRECT ANSWER-Provincial/territorial
regulatory authority responsibility
Highway Traffic Act - CORRECT ANSWER-Regulates vehicle registration,
licensing, and traffic control
Personal Information Protection and Electronic Documents Act - CORRECT
ANSWER-Balances privacy rights with organizational data needs
Material facts - CORRECT ANSWER-Facts influencing insurer's risk acceptance
Non-disclosure - CORRECT ANSWER-Withholding risk-relevant information
Endorsement - CORRECT ANSWER-Policy amendment altering provisions
Cover note or binder - CORRECT ANSWER-Temporary insurance agreement
Binder - CORRECT ANSWER-Insurer's agreement to insure a risk temporarily
Coverage summary - CORRECT ANSWER-Contains premium, effective dates
Statutory Conditions - CORRECT ANSWER-Conditions required by law to be
printed on insurance policies.
Cancellation Notice - CORRECT ANSWER-Insurer must give written notice
before canceling a policy.
Pro Rata Refund - CORRECT ANSWER-Return of premium for the unexpired
term of a canceled policy.
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