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

IIC RIBO-LEVEL-1 Online Questions & Answers

• Question 31:

  A member has been found guilty of misconduct by determination of the discipline committee.

  Which is NOT a likely penalty?

  A. Imposing a fine that the committee deems appropriate to a maximum amount prescribed in the regulations.
  B. Revoking the certificate of the member.
  C. Receiving a jail sentence based on the severity of the misconduct.
  D. Reprimanding the member and, if deemed warranted, directing that the reprimand be recorded.
  C. Receiving a jail sentence based on the severity of the misconduct.

  ---

  Explanation

  A discipline committee can impose regulatory penalties such as fines, revocation, or reprimands within its authority. A jail sentence is a criminal court sanction, not a likely penalty imposed by the RIBO discipline process for professional misconduct. The regulatory consequences focus on licence and disciplinary remedies.

• Question 32:

  2023. Cindy and Joe pick up the car early on June 15,

  2023. They get into an accident with another car on their way home.

  Is the damage to the vehicle covered and why?

  A. Yes, because they already signed the papers.
  B. No, because the accident occurred before the effective date of the policy.
  C. Yes, because the dealership's insurance will cover the vehicle until Joe and Cindy's policy is in effect.
  D. No, because auto insurance policies only cover damages after payment of the first premium.
  B. No, because the accident occurred before the effective date of the policy.

  ---

  Explanation

  Coverage begins on the policy effective date, not when the vehicle purchase papers are signed or when the vehicle is picked up early. If the accident occurred before the effective date, the policy does not cover that damage. The dealership's insurance and premium payment assumptions do not change the effective date of the client's policy.

• Question 33:

  An accountant purchased an Errors and Omissions (E & O. policy on a claims made basis with a retroactive date of January 1, 2020. The accountant reports a claim to their Broker on March 1, 2025 for an error that occurred on June 5, 2021, while their current policy is in force and uninterrupted.

  How will the insurer most likely respond?

  A. The claim will be denied because the error occurred more than one year ago.
  B. The claim will be covered because both the error and the claim fall within the policy and retroactive periods.
  C. The claim will be denied because the policy was not in place at the time of the error.
  D. The claim will be covered as it was immediately reported upon discovery.
  B. The claim will be covered because both the error and the claim fall within the policy and retroactive periods.

  ---

  Explanation

  For a claims-made E and O policy, the claim must be made and reported during the policy period and the wrongful act must fall after the retroactive date, subject to wording. The error occurred after January 1, 2020 and the claim was reported while the policy was in force. The age of the error alone does not defeat coverage in this scenario.

• Question 34:

  Newly acquired automobiles are automatically covered under an O.A.P. 1 Owner's Policy provided the insurer is notified:

  A. as soon as practicable.
  B. within 7 days.
  C. within 14 days.
  D. within 21 days.
  C. within 14 days.

  ---

  Explanation

  A newly acquired automobile is automatically covered only for a limited period, and the insurer must be notified within 14 days. The broker should not rely on vague practical notice or longer notice periods. Timely notification is necessary so the insurer can add or rate the automobile properly.

• Question 35:

  Which of the client situations would prompt you to discuss a change to their habitational policy?

  A. Your client tells you they are going to replace their garden shed.
  B. Your client tells you that they have purchased a boat.
  C. Your client tells you they are using a neighbour's trailer for a few months and will store it in their garage.
  D. Your client tells you they have moved their office to be entirely in their spare bedroom.
  D. Your client tells you they have moved their office to be entirely in their spare bedroom.

  ---

  Explanation

  Moving an office into a spare bedroom creates a home-based business exposure and can change property, liability, and underwriting eligibility. A shed replacement, boat purchase, or temporary storage of a neighbour's trailer may also require discussion depending on details, but the direct habitational policy change in this set is the home business use.

• Question 36:

  Claudia contacts the Broker requesting a binder certificate for the second mortgage with a private lender.

  What is NOT an underwriting concern with this request?

  A. The lender is not regulated like charter banks.
  B. Insured is going through a financial hardship.
  C. Insured is staging a loss to alleviate financial problems.
  D. The lender is located in another province.
  D. The lender is located in another province.

  ---

  Explanation

  The private lender request raises concerns about financial hardship, lender status, and possible moral hazard, but an out-of-province location is not itself the underwriting concern being tested. The concern is why the lender is being added and what the mortgage request suggests about the insured's situation, not the lender's province.

• Question 37:

  A client has a homeowner's policy with replacement cost coverage for personal property. A covered fire loss destroys several items, including a 3-year-old television originally purchased for $2,000. The same model today retails for $1,500.

  The insurer issues a cheque for $1,500 to replace the TV.

  Which of the following best explains how the principle of indemnification is applied in this situation?

  A. The insurer is overpaying the claim because the item has depreciated.
  B. The insurer should have paid the original purchase price since that reflects the insured's original investment.
  C. The insurer is correctly applying replacement cost to restore the insured to their pre-loss position with an item of similar like kind & quality.
  D. The insurer should reduce the payment based on the TV's actual cash value, even though replacement cost is selected.
  C. The insurer is correctly applying replacement cost to restore the insured to their pre-loss position with an item of similar like kind & quality.

  ---

  Explanation

  Replacement cost is intended to restore the insured with property of similar kind and quality without a depreciation deduction, subject to policy conditions. Paying $1,500 for the current replacement of the television applies indemnity under replacement cost coverage. The original purchase price and actual cash value are not the controlling measures when replacement cost conditions are met.

• Question 38:

  The insurance industry uses specific definitions to describe different perils under Crime coverages.

  What would be considered a Burglary loss?

  A. A customer entered your insured's store and secretly carried off several items of merchandise without paying for them.
  B. A group of violent people entered your insured's store, terrified the clerks on duty and carried away several items of stock and all the cash in the cash register.
  C. A criminal hid in your insured's store until the store closed in the evening. They then stole several valuable items of stock and took all of the change left in the cash register. They then forced the rear door and escaped.
  D. An employee stole funds from the cash register while making change for a customer.
  C. A criminal hid in your insured's store until the store closed in the evening. They then stole several valuable items of stock and took all of the change left in the cash register. They then forced the rear door and escaped.

  ---

  Explanation

  Burglary involves unlawful entry or exit from premises with evidence of force or similar unauthorized entry circumstances. A criminal hiding in the store and then forcing the rear door to escape after theft fits the burglary concept. Shoplifting, robbery involving violence, and employee theft are different crime categories.

• Question 39:

  An insured has incurred $24,000 in claims and has $40,000 in earned premiums.

  What is the insured's loss ratio?

  A. 0.06%
  B. 0.60%
  C. 1.20%
  D. 6%
  B. 0.60%

  ---

  Explanation

  Loss ratio is incurred losses divided by earned premium. The calculation is 24,000 divided by 40,000, which equals 0.60. The answer format shown as 0.60% is likely using the decimal value label, but the mathematical relationship being tested is 60 percent or 0.60 as a ratio. The other calculations do not match the loss-to-premium relationship.

• Question 40:

  Which factor determines the class of a commercial auto?

  A. The driving record of the driver.
  B. History of the owner of the vehicle.
  C. The type of cargo carried.
  D. Location where the vehicle is garaged.
  C. The type of cargo carried.

  ---

  Explanation

  Commercial auto class is strongly affected by the vehicle's use and the type of cargo carried, because those factors define the operational exposure. Driving record and garaging location affect rating or eligibility, but they do not determine the class in the way the cargo and use do. Owner history is not the main classification factor.