RIBO Level 1 Exam Questions With
Correct Answers.
Indemnify - answerThe action of compensating an insured following a loss under the
insurance policy.
Risk - answerThe chance of loss;
or an object or activity that is insured (about to be insured)
Peril - answerAn event that may cause a loss t...
RIBO Level 1 Exam Questions With
Correct Answers.
Indemnify - answer✔✔The action of compensating an insured following a loss under the
insurance policy.
Risk - answer✔✔The chance of loss;
or an object or activity that is insured (about to be insured)
Peril - answer✔✔An event that may cause a loss to occur
Object of Insurance - answer✔✔The item that is insured or covered in an insurance policy
Indemnity - answer✔✔to put you back in the same financial position (just prior to loss) NO
BETTER NO WORSE
Insured / Policy holder - answer✔✔The person who purchases an insurance policy
Noted as First Party
Insurer - answer✔✔Insurance company who issued the insurance policy and who
compensates/indemnifies a policy holder in the event of a loss
Noted as second party
Premium - answer✔✔The sum of money paid by a person to an insurance company in exchange
for an insurance policy
RIBO - Registered Insurance Brokers of Ontario - answer✔✔A Self-governing, self-funded
organization of general insurance brokers in Ontario
RIBO regulates the
- Licensing;
- Professional competence;
- Ethical conduct
- Insurance-related financial obligations
of all independent general insurance brokers in ON through the RIB Act
Property risk - answer✔✔Financial loss occurs when owned property is lost or damaged
Liability risk - answer✔✔When a person's negligent actions result in injury to others or damage
to another's property
Negligence - answer✔✔is what a reasonable and prudence person would do or not do in a
similar situation
Speculative risk - answer✔✔This is the possibility of either financial loss / gain
--> this is NOT insurable
Pure risk - answer✔✔The chance of financial loss with no chance of financial gain.
--> this type of risk IS insurable
Hazards - answer✔✔is a condition that may cause a peril to occur or make the loss more severe.
There are 2 types of hazard: Physical hazard
Moral hazard
Physical hazard - answer✔✔OBSERVABLE condition relating to the object of insurance
Moral hazard - answer✔✔Subjective characteristics of an insured/applicant that increases the
likelihood of loss.
Proximate Cause - answer✔✔the immediate and effective cause of the loss
Dealing with Risk - answer✔✔1) Eliminating Risk: get rid of risk completely
(not practical)
2) Controlling Risk: taking measures to decrease the
chance of loss (more practical but not enough)
3) Retaining Risk: Self-insurance and Deductible
e.g. Canadian National Railways self insure
4) Transferring Risk: transferring a portion or all of your
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