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IIC Principles and Practice of Insurance Sample Questions:
1. Tame Insurance Company recently decided to terminate its broker agreement with XYZ Insurance Brokers.
Which situation would likely have resulted in this termination?
A) Tame Insurance Company provided quotes on all applications received from the broker
B) Tame Insurance Company set a standard deductible for certain classes of business
C) XYZ Insurance Brokers did not keep handled premiums in a trust account and instead used them to pay expenses
D) XYZ Insurance Brokers did not remit commissions owed to the insurer immediately after issuing a policy
2. Which type of insurance company has the same capital structure as any other capital enterprise?
A) Co-operative company
B) Factory mutual company
C) Captive company
D) Stock company
3. George emails his cousin offering to buy her textbooks for $500. He states that unless she replies "no," they have a deal. Which essential element of a binding contract is missing?
A) Offer and acceptance
B) Capacity to contract
C) Consideration
D) Legality of object
4. How are staff adjusters and independent adjusters similar?
A) Both work on behalf of, and are paid by, the insurer
B) Neither is allowed to perform an investigation
C) Neither has any limitation on their authority to settle claims
D) Both are licensed only in Quebec and New Brunswick
5. An insurer writes a $60,000,000 risk for a premium of $30,000. Using pro rata reinsurance, it transfers 25% of the risk to the reinsurer. The risk then suffers a $100,000 loss. How much does the reinsurer contribute to this loss?
A) $60,000
B) $25,000
C) $100,000
D) $75,000
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: D | Question # 3 Answer: A | Question # 4 Answer: A | Question # 5 Answer: B |



