Exam (elaborations)
Insurance level 1 Alberta exam Questions and Answers 2024
- Course
- Institution
Insurance level 1 Alberta exam
[Show more]
Content preview
Insurance level 1 Alberta examThe philosophy behind insurance is to
a) provide a vehicle through which wealthy individuals and corporations may protect
their property against catastrophic loss
b)allow insurers to grow larger and more stable, thus creating jobs and supporting the
economy
c) spread the losses of the few amongst the premiums of the many
d) spread the losses of the many amongst the premiums of the few - answer spread the
losses of the few amongst the premiums of the many
Once an underwriter decides to accept a risk, they must establish an appropriate
premium. They apply base rates established by actuaries, add loadings, and then
multiply the final rate by the amount insured to obtain the premium. A loading applied by
an underwriter...
A)Is an additional charge included in an insurance rate to reflect a hazard not
contemplated in the basic rate for the class
b)is accomplished by applying the established rates to the specific items that are to be
insured
c) is the rate multiplied by the amount of insurance
d) reflects the danger of loss arising from what happens to other nearby risks - answerIs
an additional charge included in an insurance rate to reflect a hazard not contemplated
in the basic rate for the class
When an insurer pays a claim to its insured under a contract of insurance and attempts
to recover the amount from a third party whom it believes is responsible for the damage,
this is known as
a) indemnity
b)insurable interest
c) coinsurance
d) subrogation - answerSubrogation
What Are the differences between treaty and facultative reinsurance - answerTreaty
Reinsurance
Automatic reinsurance
Insurer must cede risk and reinsurer
must accept risk
Not Facultative Reinsurance
Choice to reinsure or not
,Reinsurance is insurance for insurance companies. It is a method of spreading risk for
insurers. Which of the following is NOT a reason for reinsuring?
a) To reduce the effect of a catastrophic loss
b) To increase the insurer's capacity to write business
c) To promote the collection and pooling of loss information
d) To provide stability in a fl uctuating market - answerTo promote the collection and
pooling of loss information
What is the difference between an agent and a broker? - answerA broker is an
independent business person who is authorized to sell insurance policies on
behalf of an insurer. They usually represent many insurers.
An agent represents one company only. They are employees of an insurance company.
Carlos Marrero is an agent for elite insurance company. Although he represents only
Elite Insurance, he is not a company employee and is responsible for his own
expenses. Carlos is paid a commission for the policies he sells, but the client list
belongs to Elite Insurance company. What type of company is Elite Insurance
A)Exclusive agency company
b)Partnership
c) Independent agent selling company
d) Sole proprietorship - answerExclusive agency company
What is the difference between an independent brokerage system and a direct writer? -
answerdirect writer markets their products directly to the public.
An independent brokerage sys-
tem does not. It uses independent brokers to sell their products
You are a broker for creative solutions brokerage ltd. Your top priority is to produce
business. You understand that it is not easy to sell something without having substantial
knowledge about it. Continuing education is essential and aligns with the mandate of
the provincial regulatory body. Brokers and agents must take _____ hours annually of
approved courses and seminars relating to their business
A)20
B)15
C)30
D)12 - answer15
Based on the principal and agent legal relationship. It is understood that an insurers
(principals) knowledge of a risk is the same as that of the intermediary (agent). What
does this mean?
, A)Full disclosure to the intermediary by the client is required
b)Information given to the intermediary by the client is deemed to be given to the insurer
c) Both the insurer and the intermediary are expected to be knowledgeable
d) Both the insurer and the intermediary are partners in protecting the client from
fortuitous events - answerInformation given to the intermediary by the client is deemed
to be given to the insurer
Which of the following is considered to be a fiduciary?
a) An insured
b)An insurance agent
c) A lessor
d) The Alberta Insurance Council - answerAn insurance agent
As an insurance broker, you must communicate factual statements about a risk to an
underwriter, so the risk may be properly assessed. The duty of disclosure
a) is fundamental to the principle of utmost good faith that underlies all insurance
transactions
b)does not impact the insurer
c) falls solely on the shoulders of the applicant and broker
d) requires accurate transmission of the risk particulars to the insured - answerIs the
fundamental to the principle of utmost good faith that underlies all insurance
transactions
Describe a brokers or agents role in the claims process - answerAbroker or agent must
promptly report any claim to the insurer. A first notice of loss may
need to be completed as part of the initial claims process. Manage the insured's
expectations
and provide guidance and assistance as required. Monitor the progress of the claim as
part of
the service being provided to the client.
Which of the following is not one of the ethical principles followed by a broker or agent
A)Disclose risks and benefits of financial products being considered by the client
b)Put the interests of the client first
c) Avoid situations where a conflict of interest exists
d) All complaints should be referred to the designated representative of the brokerage
or agency - answerAll complaints should be referred to the designated representative of
the brokerage or agency
The errors and omissions insurance policy required by the insurance act for all holders
of a certificate of authority must provide a maximum policy payout for all claims in a
policy year in the amount of
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller julianah420. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $15.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
83637 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now
