Term
| Explain the role of the Property & Casualty Insurance Compensation Corporation when an insurer becomes insolvent. |
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Definition
| When an insurance company goes bankrupt, and claims cannot be paid, the Corporation pays all valid claims. |
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Term
| Insurance is fiduciary in nature. Define "fiduciary." |
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Definition
| A fiduciary is one who handles other people's money. |
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Term
| What are the fiduciary obligations of insurers? |
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Definition
Premiums paid to insurers are not fully earned until expiry of the policy.
Unearned premiums are held in trust to be refunded to the insured in the event that the policy is cancelled prior to its expiry. |
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Term
| What are the fiduciary obligations of brokers? |
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Definition
Commission is not fully earned until expiry of the policy.
Unearned commissions are held in trust and refunded to the insureds in the event that the policy is cancelled prior to its expiry. |
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Term
| Summarize the provisions of the "removal clause" contained in policies of fire insurance. |
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Definition
If the property is not located at the insureds premises at the time of loss, there is no coverage.
Excpetion: Coverage is extended when property is moved to another location to reduce/prevent further damage or losses. |
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Term
| Define "subrogation" & indicate how this right is exercised by the insurer. |
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Definition
Subrogation means to put oneself into another's shoes.
The Insurance Act allows the insurer to put itself in the insured's shoes, giving them the right to recover the amount of the loss from a responsible 3rd party. This action is taken under the insured's name. |
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Term
| How can a term or condition of the insurance contract be waived by an insurance broker? Explain. |
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Definition
| A waiver must be presented in writing and signed by a person authorized for that purpose by the insurer. This is usually an officer of the insurance company. |
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Term
| Your clients received their policy one month ago. It has not yet been paid. Yesterday, they had a loss. What effect does the delivery of the policy have on the obligations of the insurer? |
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Definition
| The claim shall be as binding on the insurer as if the premium has already been paid. |
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Term
| identify three coverages required to be provided on all policies of fire insurance. |
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Definition
1. Fire.
2. Lightning.
3. Explosion of natural gas, coal or manufactured gas. |
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Term
| Explain & provide an example of Friendly Fire |
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Definition
A fire that is contained in its proper receptacle, where it is supposed to be.
Example: A fire contained and burning in a wood stove. |
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Term
| Explain & provide an example of Hostile Fire |
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Definition
A fire that has escaped from its proper receptacle.
Example: Loss of a carpet due to a spark that escaped from a fireplace. |
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Term
| Of Friendly Fire & Hostile Fire, which is insured by a fire policy? |
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Definition
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Term
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Definition
| Consists of a misstatement and/or fraudulent omission of a material fact. |
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Term
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Definition
| Policy is automatically continued to protect insureds after an authorized assignment under the Bankruptcy Act or insureds who have possession of insured property as a result of a change of title due to succession, operation of law, or death. |
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Term
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Definition
| Not insured unless interest of insured is stated in the contract. |
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Term
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Definition
| Any change which serves to increase the chance of loss arising after the policy is issued. |
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Term
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Definition
| Requires that the insured be notified with 15 days notice by registered mail or 5 days notice when personally delivered. |
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Term
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Definition
| Identifies the documents needed when a claim is filed. |
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Term
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Definition
| Deliberate attempt to deceive with a view to securing some profit. |
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Term
| Who May Give Notice and Proof |
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Definition
| Any party of interest, or agent of insured to file a claim on behalf of the insured. |
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Term
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Definition
| Requires that the insureds take all reasonable steps to protect property from further damage. |
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Term
| Entry, Control, Abandonment |
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Definition
| Insurer is not entitled to rights of ownership or control; nor can the insured abandon insured property to it. |
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Term
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Definition
| Option available to either the insurer or insured when there is a disagreement as to the value of property insured, saved or amount of loss. |
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Term
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Definition
| Required to be made within 60 days after completion of proof of loss, unless the contract provides for a shorter time. |
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Term
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Definition
| Requires that notice of the insurers intentions be provided within 30 days after receipt of the proof of loss. |
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Term
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Definition
| Must be commenced within one year (two yrs in Manitoba & Sasksatchewan) after loss occurs. |
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Term
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Definition
| Written notice to the insurer can be delivered at or sent by registered mail to the chief agency or head office of the insurer in the province. |
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