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12 Cards in this Set
- Front
- Back
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Perhaps the most important area of government regulation, whether provincial or federal, involves monitoring the financial strength of insurers. Explain the role of the Property and Casualty Insurance Corporation when an insurer becomes insolvent. |
When an insurer becomes insolvent the PACIC all valid claims. All participating insurance companies are then charged an assessment to cover the total amount of claims. The amount of each insurer's contribution is based on total direct premiums written by it. |
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What are the amounts that that PACIC will pay? |
Up to a maximum of $250,000 for all claims arising from a single occurrence and a refund about to 70% of unearned premiums, subject to a maximum of $700 per policy. |
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Define fiduciary. |
One that handles other people's money. |
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Briefly explain the fiduciary obligations of insurers. |
Premiums paid to the insurer are not fully earned until the expiry of the policy. Unearned premiums are considered to be held in trust to refund the insured's in the event the policy is cancelled prior to its expiry date. |
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Briefly explain the fiduciary obligations of a broker. |
Commissions are not fully earned until the expiry of the insurance policy. Unearned premiums are considered to be held in trust to refund to the insured or insurer depending on contract, in the event the policy is cancelled prior to its expiry date. |
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Briefly summarize the provisions of the "removal clause" a fire insurance. |
"If any of the insured property is necessarily removed from the locations specified here in to prevent loss, destruction or damage is there too, that part of the insurance under this policy that exceeds the amount of the insurers liability for any loss already incurred shall, for 7 days only, or for the unexpired term of the policy if less than 7 Days, insure the property removed and any remaining in the locations specified here in in their proportions which the value of the property in each of the respective location bears to the value of the property in them all |
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The right of subrogation is guaranteed in the insurance acts of the common-law provinces. State the meaning of subrogation and indicate how this right is exercised by the insurer. |
Segregation refers to the lawful substitution of a third-party having a claim against another party. And insurance contracts, the insurer has the right to step into the shoes of the party whom the compensated party could have sued |
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How can a term or condition of the insurance contract be waived by an insurance broker? Explain. |
When a term or condition needs to be changed to a policy, a broker may submit this to the insurer provided they are a person authorized for that purpose by the insurer. |
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Your client received their policy one month ago. It has not yet been paid for. Yesterday, they had a fire loss. What effect does the delivery of the policy have on the obligations of the insurer? |
Any claim insured under the policy will be paid even though the premium has not yet being paid. |
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Identify three coverages required to be provided on all policies of fire insurance. |
1 - fire 2 - lightning 3 - explosion of natural gas, coal or manufactured gas |
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What is a friendly fire? |
A friendly fire is one that is contained in its proper receptacle. It is where it is supposed to be. |
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What is a hostile fire? |
A hostile fire is a fire that escapes from its receptacle or original originates outside of any such receptacle. |
