Essential Skills for the Insurance Broker and Agent (C130) Free Practice Test

Question 1

What is an agent's consideration when assessing a potential client and the client's attitude towards risk?

A. People have the same acceptance of risk.

B. Clients who lead riskier lives are good sources of profit for insurance brokers.

C. Availability of insurance coverage may be affected by the client's lifestyle.

D. People's habits are unrelated to their level of risk.

Correct Answer: C

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Question 2

Trevor is cutting down a tree in his backyard. The tree accidentally falls onto his neighbour's shed, destroying the roof. Two weeks later, Trevor receives a document from his neighbour suing him for the damages to the shed and its contents. Which document has Trevor received?

A. Statement of claim

B. Judgment notice

C. Statement of defence

D. Damages attestation

Correct Answer: A

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Question 3

A client who wants coverage for a risk, independent from the risk a broker previously arranged coverage for, is usually required to submit which document?

A. Insured's authorization application

B. Broker of record letter

C. Formal written application

D. Statement of change request

Correct Answer: C

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Question 4

Michelle is a new agent who would like to protect herself against possible errors and omissions claims. What should Michelle practice in her interactions with clients and insurers?

A. Offer advice to clients if she thinks it is beneficial, even if it is outside her area of expertise

B. Recommend that clients consult with experts outside the insurance field if a situation calls for it

C. Ensure all communication with clients and insurers is done face-to-face

D. Use close-ended questions with clients at all times

Correct Answer: B

Question 5

It is critical that an intermediary is always mindful of privacy legislation during which method of sourcing clients?

A. Upselling

B. Tracking of expiry dates

C. Online marketing

D. Walk-ins

Correct Answer: C

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Question 6

What is the role of insurance intermediaries under the law of agency?

A. Confirm with the insurers that all exposures are covered

B. Issue policies on any risk agents deem insurable

C. Balance dual responsibilities to the insurers and to the insureds

D. Act as third parties in insurance contracts

Correct Answer: C

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Question 7

A tenant's negligence causes a fire in the dwelling they rent. Typically, who is initially responsible for paying the damage?

A. The insurer that issued the tenant's legal liability policy

B. The tenant who negligently caused the fire

C. The insurer that issued the homeowners policy

D. The dwelling's owner who is responsible for the tenant's actions

Correct Answer: C

Question 8

Michelle is a new agent who would like to protect herself against possible errors and omissions claims. What should Michelle practice in her interactions with clients and insurers?

A. Offer advice to clients if she thinks it is beneficial, even if it is outside her area of expertise

B. Recommend that clients consult with experts outside the insurance field if a situation calls for it

C. Ensure all communication with clients and insurers is done face-to-face

D. Use close-ended questions with clients at all times

Correct Answer: B

Explanation: Only visible for TestSimulate members. You can sign-up / login (it's free).

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IIC Essential Skills for the Insurance Broker and Agent (C130) Free Practice Test