IIC RIBO-LEVEL-1 Online Practice Questions and Exam Preparation

IIC RIBO-LEVEL-1 Online Questions & Answers

• Question 11:

  What is the meaning of implied consent?

  A. The act where a person gives declarative permission for a specific action to be taken by the other party to which they both agreed.
  B. The ability for one party to infer to another party how to proceed.
  C. The assumption that a person has given permission for an action which is inferred from their actions rather than expressly provided.
  D. The act where a third party gives declarative permission for a specific action to be taken by the first party to which they both agreed.
  C. The assumption that a person has given permission for an action which is inferred from their actions rather than expressly provided.

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  Explanation

  Implied consent is permission inferred from a person's actions or the circumstances rather than an explicit written or verbal statement. Express consent is a direct declaration of permission. Third-party permission and vague inference by one party do not capture the privacy-law meaning of implied consent.

• Question 12:

  Raj is reviewing optional Income Replacement Benefits with a customer who already has a workplace disability plan.

  What should Raj do before advising the customer to opt out?

  A. Review the customer's workplace plan and ensure it covers automobile accidents.
  B. Recommend opting out immediately to avoid duplicate coverage.
  C. Refer the customer to a life and health advisor if the customer has questions.
  D. Advise the customer that auto accidents are always covered by their workplace plan.
  A. Review the customer's workplace plan and ensure it covers automobile accidents.

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  Explanation

  Before advising a client to opt out of income replacement protection, the broker must complete a needs-based review and check whether the workplace disability plan actually covers automobile accident injuries and any waiting periods or limits. Saving premium without confirming replacement protection can create a gap. Referral may be useful for specialized advice, but the first step is verifying the existing coverage.

• Question 13:

  Which statement BEST describes the coverage provided under a "Consequential Loss Assumption Clause" in a property policy?

  A. The consumption of food off the premises.
  B. The right of an insurer to apply a deductible as a consequence of a loss.
  C. Damage to frozen goods indirectly caused by a change in temperature resulting from an insured peril.
  D. A loss occurring as a direct consequence of careless driving.
  C. Damage to frozen goods indirectly caused by a change in temperature resulting from an insured peril.

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  Explanation

  A Consequential Loss Assumption Clause can cover loss to goods caused indirectly by a change in temperature resulting from an insured peril, such as frozen goods affected after covered equipment or utility damage. It is not a deductible rule, food consumption coverage, or automobile loss concept. The clause addresses indirect property loss following an insured event.

• Question 14:

  A Broker is reviewing coverage options for a new client. Company X offers a higher commission rate but the coverage has more exclusions. Company Y offers a lower commission but provides the comprehensive coverage the client needs.

  What is the Broker's ethical obligation?

  A. Recommend Company X and simply explain the exclusions to the client.
  B. Recommend Company Y because the broker must act in the best interest of the client regardless of commission.
  C. Sell Company X but offer the client a discount on the broker's fee.
  D. Split the business between both companies to average out the commission.
  B. Recommend Company Y because the broker must act in the best interest of the client regardless of commission.

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  Explanation

  The broker must put the client's coverage needs ahead of the commission level. When one insurer offers more suitable coverage, the broker should recommend the suitable option and disclose any conflicts as required. Selling the higher-commission product or splitting business for compensation reasons would put the broker's interest ahead of the client.

• Question 15:

  Brianna takes a call from a prospective new client who has an operation nearby. While evaluating the risk, Brianna finds that the client holds specialized events requiring a liquor license.

  What step should Brianna NOT take?

  A. Submit a completed application to all carriers to get a quote.
  B. Review the marketplace to find specialized markets that include alcohol liability.
  C. Review specialized markets, limits, deductibles and exclusions.
  D. Discuss limits and coverage with the insured.
  A. Submit a completed application to all carriers to get a quote.

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  Explanation

  A specialized event involving a liquor licence creates a specific liability exposure that should be analyzed before applications are sent broadly. The broker should review specialized markets, limits, deductibles, exclusions, and discuss coverage with the insured. Submitting a completed application to all carriers before properly assessing the liquor liability need is not the appropriate step.

• Question 16:

  Which statement accurately describes the consequences of a driver being excluded from an automobile policy using the OPCF 28A (Excluded Driver) endorsement?

  A. The excluded driver is still covered for $200,000 in liability if they drive in an emergency.
  B. The excluded driver will not receive coverage for "most Accident Benefits" if they are injured while driving the insured vehicle.
  C. The vehicle is covered for fire and theft even if the excluded driver is behind the wheel.
  D. The insurer is still required to provide a legal defense for the excluded driver in a lawsuit.
  B. The excluded driver will not receive coverage for "most Accident Benefits" if they are injured while driving the insured vehicle.

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  Explanation

  An excluded driver endorsement removes or severely restricts coverage for the excluded driver while operating the insured automobile, including most accident benefits in that circumstance. It is not a partial liability permission for emergencies, and it does not preserve ordinary physical damage or defence protection while the excluded driver is behind the wheel. The endorsement has serious consequences that must be explained.

• Question 17:

  Under a standard Mortgage Clause, what happens if the insured intentionally sets fire to their home?

  A. The insurer will deny the claim to both the insured and the mortgagee.
  B. The insurer will pay the claim to the insured, but recover the funds from the mortgagee later.
  C. The insurer will deny the claim to the insured, but will pay the mortgagee's interest in the property.
  D. The insurer is required to pay both parties because the mortgage was in good standing.
  C. The insurer will deny the claim to the insured, but will pay the mortgagee's interest in the property.

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  Explanation

  The standard mortgage clause can protect the mortgagee's interest even when the insured's intentional act bars the insured's own recovery. The insurer may deny the insured's claim but pay the mortgagee to the extent of the mortgagee's protected interest, subject to clause conditions and recovery rights. It does not require payment to both parties after arson.

• Question 18:

  Sonia, a Broker, advises all their clients to purchase $2 million in personal liability insurance when they provide quotes.

  When checking their upcoming renewals, they notice several policies with only $1 million in personal liability coverage. They consider increasing these limits to $2 million automatically on renewal as the premium cost is only an additional $20, and asking the client if they are in agreement after.

  What legal principle would Sonia be in breach of?

  A. Personal Information Protection and Electronic Documents Act (PIPEDA).
  B. Negative Option Billing.
  C. Canadian Anti-Spam Legislation (CASL).
  D. The All-Comers (TAC) Rule.
  B. Negative Option Billing.

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  Explanation

  Automatically increasing coverage and charging the client unless the client later objects is a negative option billing problem. The client must make an informed decision before the change is placed. PIPEDA, CASL, and the Take All Comers rule do not describe this automatic renewal-limit change issue as directly.

• Question 19:

  Which is a typical habitational exclusion under a specified perils policy?

  A. Fire.
  B. Falling object.
  C. Electricity.
  D. Vacancy.
  D. Vacancy.

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  Explanation

  Vacancy is a typical exclusion or restriction under habitational property coverage, especially when it changes the fire and property risk. Fire, falling object, and electricity can be insured perils depending on the form. Vacancy is a condition or exclusion concern rather than a covered peril under a specified perils form.

• Question 20:

  A new commercial prospect operates as a corporation but the application lists only the owner's personal name.

  Which two steps should the broker take before submitting the application?

  A. Clarify the legal entity that owns and operates the business so the named insured is accurate.
  B. Ask about related entities or additional insured requirements that may affect the application.
  C. Leave the owner's personal name only because corporations and individuals are always interchangeable for insurance purposes.
  D. Submit the application immediately because the insurer can correct the named insured after a loss.
  E. Remove all business descriptions to keep the application short.
  A. Clarify the legal entity that owns and operates the business so the named insured is accurate.
  B. Ask about related entities or additional insured requirements that may affect the application.

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  Explanation

  The broker must identify the correct legal entity and any related insured or additional insured needs before submitting a commercial application. The named insured affects insurable interest, liability, and coverage response. Leaving the owner's personal name only or relying on a post-loss correction can create serious coverage and E&O issues.