Midterm_.docx

**Midterm:** ***[Facilitator:] Questions and answers cover the areas of the CAIB textbook and are based on both the CAIB study guide and ILS online course.*** 1. a. b. c. d. ***Say: Residential may be some of the common occurrences that you see when writing a home insurance policy.*** 2....

**Midterm:** ***[Facilitator:] Questions and answers cover the areas of the CAIB textbook and are based on both the CAIB study guide and ILS online course.*** 1. a. b. c. d. ***Say: Residential may be some of the common occurrences that you see when writing a home insurance policy.*** 2. e. f. ***Say: A jewelry rider would be an example for a home insurance policy for scheduled basis.*** 3. g. h. i. ***Say: Using a common example of our offices when it comes to describing the 3 categories will help for participants to understand the 3 categories.*** 4. j. k. l. m. n. 5. o. p. q. 6. r. s. t. 7. u. v. w. 8. x. y. z. 9. a. b. c. i. ii. ***Say: Replacement cost is one of the most commonly used insurance value for tenants, condominium and homeowner policies.*** ***Say: If someone has replacement cost on their policy for personal items such as a TV that was purchased 3 years ago and if they sold it on Craigslist would be worth \$300 (actual cash value) and there was a loss, the claim would pay out for a similar make and model that is new at today's prices.*** 10. d. ***Say: When thinking of when there is a claim with ICBC for an older car, ICBC would pay for the actual cash value of the automobile at time of loss, they would not replace with a new automobile.*** 11. e. iii. 1. 2. f. iv. 3. 4. 5. g. v. vi. vii. h. viii. i. ix. x. 6. 7. 8. 9. 10. 11. 12. 13. 12. j. xi. k. xii. ***Say: Possible exam question as mentioned several times in materials.*** 13. l. ***[Facilitator note:] this was explained above.*** 14. m. ***Say: Please note that commercial and personal lines may differ in what required.*** 15. n. 16. o. Section 2 -- Commercial Property Insurance Policies (General Information) ------------------------------------------------------------------------- ***Key terms for Section 2:*** - - - - - - - - ***[Facilitator:] Questions and answers cover the areas of text and are based on both the CAIB study guide and ILS online course.*** 1. a. b. - - ***Say: An example within First West is when there is a large leased land policy and the risk is divided amongst a couple insurers, the insurer that has the largest portion of risk is the lead company.*** 2. c. d. 3. e. ***Say: If there is an earthquake, insurance companies will often share in this type of risk with reinsurers to share in the loss if this type of catastrophic event were to occur.*** 4. f. 5. g. - - - ***Say: Explain if client declares and items worth at \$10,000 and it is listed on declaration page for \$10,000 and when loss occurs the actual cash value is determined at \$15,000. The most the policy will pay out in a claim would be \$10,000 as is the lesser of the 3 stated above.*** 6. h. 7. i. 8. j. 9. 10. k. 11. l. m. 12. n. o. p. - 13. q. r. s. ***[Facilitator:] See question 14 for what is required for the stated amount co-insurance clause.*** 14. t. u. ***Say: When conditions are not met then 100% co-insurance clause applies.*** 15. v. w. x. y. z. a. 16. b. c. d. 17. e. 18. f. - - 19. g. - - 20. h. 21. i. - - - j. 22. k. - l. - - - 23. m. - - 24. n. o. p. 25. a. i. ii. b. iii. c. 26. a. i. 1. 2. ***Say: If the tenant's lease was up in the next month after loss and they were not renewing lease, the owner may elect to not put the same tenant improvements back as may keep to original for next tenant to be able to improve as they require by their type of business.*** b. ii. 3. 4. 27. q. r. ***Say: If they have a warehouse and one of the conditions is to have a monitored alarm and they let their alarm contract lapse and there is a loss by theft, this would be a breach of warranty.*** 28. s. t. u. v. 29. w. x. - - 30. y. z. 31. a. b. c. d. ***Say: Insureds are required to provide all pertinent facts about the risk and disclose prior history and if they chose to hold back information, like fail to admit they had a \$10,000 theft claim the year before, the insurer could void the contract (see question 32).*** 32. e. f. g. h. i. j. k. 33. l. m. n. o. p. 34. q. r. s. 35. t. 36. u. iv. v. - w. - - - x. - - y. - Section 1 -- The Role of the Broker in the Underwriting Process --------------------------------------------------------------- ***Key terms for Section 1:*** - - - - ***[Facilitator:] Questions and answers cover the areas of the CAIB textbook and are based on both the CAIB study guide and ILS online course.*** 1. a. b. c. i. ii. iii. iv. v. ***Say: Any information sent to the insurer to review risk for quote, or to take a personal lines example, when you don't have access to the portal and you are sending in CSIO application, photos, home evaluator, and applicable information insurer requires to bind risk.*** 2. d. e. f. g. h. ***Say: A sample of a survey is available at back of Chapter 2 -- Section 2 (ref. 2-20)*** 3. i. j. k. 4. l. m. n. 5. o. p. q. r. s. 6. t. u. v. w. x. ***Say: Good acronym for memory is WHORP.*** ***Say: It is important to note that these building requirements are common to be known for homeowner policies.*** 7. y. z. a. b. c. ***Say: Good acronym for memory is HOPED.*** 8. d. 9. e. vi. 10. f. **Say: A high risk detachment would be if you are a retail store and you are surrounding by a nightclub on one side and a steel fabrication plant on the other side.** **Ask participants why they feel the above example would be high risk.** 11. g. h. 12. i. ***Say: This is common to know for homeowner type polices as well.*** 13. j. k. l. m. ***Say: Broker would typically require an additional questionnaire for these types of risks.*** Section 2 -- The Role of the Underwriter in the Underwriting Process -------------------------------------------------------------------- ***Key terms for Section 2:*** - - - - - - - - - - ***[Facilitator:] Questions and answers cover the areas of the CAIB textbook and are based on both the CAIB study guide and ILS online course.*** 1. a. b. c. d. 2. e. 3. f. 4. g. 5. h. i. 6. j. 7. k. 8. l. m. 9. n. 10. o. 11. p. q. ***Say: What type of market do you think we are in right now? Answer will vary depending on trends in the insurance market. Discuss reasons why participants feel that it is a soft or hard market.*** 12. r. s. t. u. ***Say: This is generally the role of the agent or broker in the process. Use First West procedures as example.*** 13. v. w. 14. x. y. z. a. b. c. ***Say: A good acronym is TOP HEG*** 15. d. 16. e. f. g. 17. h. 18. i. j. ***Say: it is important to understand the difference between moral and morale as if asked a question on the exam; you want to be clear which one exam is referring to.*** 19. k. l. m. n. 20. o. p. ***Provide data on:*** i. ii. q. r. s. t. u. 21. v. ***Say: A broker puts \$500,000 of premium with an insurance company each year, and they request coverage for a standalone rental in which the company would not normally write, company may decide to take on risk as favor to broker (see question 22)*** 22. w. x. y. z. 23. a. 1. 2. 24. a. b. 25. c. d. e. f. ***[Facilitator:] Questions and answers cover the areas of the CAIB textbook and are based on both the CAIB study guide and ILS online course.*** ***Say: Advise that at the end of Chapter 3, there are samples of the different policy forms for review (see chart 3-46).*** 1. a. b. c. ***Say: 50,000 fire losses occur in Canada each year, causing slightly \$1.5 billion in property losses. That means a daily average of 140 fires a day at a cost slightly over \$4 million.*** 1. d. e. f. g. h. i. ***Say: Can review an example of a policy declaration page at end of Chapter 3 (see 3-46)*** 2. j. ***Say: Wording for local time at insured' address was changed from standard time to be consistent with government mandated auto policy wordings.*** 3. k. 4. l. 5. m. 6. n. o. p. 7. q. r. s. ***[Facilitator:] The following questions \#9 and \#10 ensure understanding of perils covered or not covered and are part of the ILS CAIB 2 online course.*** ***[Facilitator:] Ask group questions, can ask each participant to answer a question each.*** 8. t. u. v. w. x. y. z. 9. a. b. c. d. e. f. 10. g. 11. h. i. 12. j. ***Say: We will discuss how insureds may be able to get coverage for bylaws later in this textbook.*** 13. k. l. m. n. 14. o. p. 15. q. r. s. 16. t. u. ***Say: Until the debris is removed, the property may not be able to be rebuilt or repaired or replaced.*** Section 2 -- Fire and Extended Coverage Policy ---------------------------------------------- ***Key terms for Section 2:*** - ***[Facilitator:] Questions and answers cover the areas of the CAIB textbook and are based on both the CAIB study guide and ILS online course.*** 1. a. 2. b. 3. c. d. e. f. g. h. i. ***Say: When reviewing the material in the CAIB 2 textbook, it is important to know what perils are included and what the exclusions are for each of the different types of commercial policies. (Fire only, Fire and Extended, Broad Form, etc.).*** 4. j. k. l. 5. m. n. o. p. q. ***Say: We will discuss Equipment Breakdown Insurance later on in Chapter 4 to further enhance the policy to provide coverage. For this Chapter we will focus on what covered and what is not covered without taking into account additional coverages that can be purchased to enhance policy.*** 6. r. ***Say: If you think of a personal lines example, it would be a propane tank for a BBQ.*** 7. s. t. u. 8. v. ***Say: An example might be where your client leases the property for their flower shop and may be responsible for the upkeep and maintenance of the boiler as per their lease agreement.*** ***[Facilitator:] The following question \#9 ensure understanding of perils covered or not covered and are part of the ILS CAIB 2 online course.*** 9. w. x. y. z. 10. a. b. c. 11. d. e. ***Say: As more spacecrafts are launched, this potential for loss increases.*** 12. f. - g. - h. - 13. i. ***Say: Possible exam question.*** 14. j. 15. k. l. ***Say: If an auto repair shop and shop door blows off in wind and debris flies in and damages a customer's vehicle that is being worked on.*** Section 3 -- Commercial Building, Equipment and Stock Broad Form (IBC 4037) --------------------------------------------------------------------------- ***Key terms for Section 3:*** - - - - - - - ***[Facilitator:] Questions and answers cover the areas of the CAIB textbook and are based on both the CAIB study guide and ILS online course.*** 1. a. ***Say: Please be advised that this is a situation that may differ from personal lines (personal lines common forms are Fire and Extended Coverage/Named Perils/Broad Coverage/Comprehensive). Note differences so aware that exam will focus on commercial not personal lines.*** 2. b. ***[Facilitator:] The following questions \#2 and \#3 ensure understanding of perils covered or not covered and are part of the ILS CAIB 2 online course.*** 3. a. b. c. d. e. f. g. h. i. j. k. l. m. n. o. p. q. r. s. t. u. v. w. x. y. z. a. b. c. d. e. f. g. h. 4. a. b. c. d. e. f. g. h. i. j. k. l. m. n. o. p. q. r. s. t. u. v. w. x. y. z. a. b. c. d. e. ***Say: It is important to understand what is not covered under a broad form policy (all risk) so that you are aware that anything other than the exclusions would be covered.*** 5. a. b. c. d. e. f. g. Section 4 -- Extensions of Coverage ----------------------------------- ***Key terms for Section 4:*** No key terms ***[Facilitator:] Questions and answers cover the areas of the CAIB textbook and are based on both the CAIB study guide and ILS online course.*** 1. a. b. c. d. e. ***Say: The insuring agreement contained in most commercial property policies limit the amount of the Insurers liability for losses falling within the extensions provided by it.*** ***Extension of coverage are available on Fire and Extended Coverage, Named Perils and Broad Coverage Forms.*** 2. f. 3. g. h. i. ***Say: This could be possible exam question. If an employee is in the lunchroom and the sprinkler system goes off and destroys the employee's cell phone for which he/she had no current coverage for, they would be reimbursed up to \$250 for loss/damage to cell phone.*** 4. j. k. 5. l. 6. m. n. 7. o. 8. 9. p. q. r. s. ***Say: Possible exam question.*** 10. t. u. v. w. x. y. z. a. b. c. d. e. f. g. h. i. ***Say: Typical exam question would likely ask to name a few of the considerations, but be prepared to know all to help be successful in this type of exam question (study guide asks to name 6).*** 11. j. k. l. m. 12. n. o. ***Say: Again as a reminder, there are samples of the policy forms and wordings in the back of Chapter 3 for your reference to be familiar with.*** ***[Facilitator:] Questions and answers cover the areas of the CAIB textbook and are based on both the CAIB study guide and ILS online course.*** 1. a. b. c. ***Say: Specialized forms, which can be added to an Insured's policy, are not always uniform across Insurers. It is important for brokers to understand the different guidelines with the various Insurers.*** ***Say: Exclusion policies also vary from insurer to insurer so brokers are to be aware of the differences when reviewing company wordings.*** ***Say: Please be review the charts on pages 4-2 (Insuring Property Excluded -- Building, Equipment and Stock -- Broad Form Policy) and 4-3 (Insuring Perils Excluded -- Broad Form Policy)*** 2. d. e. i. 1. 2. 3. f. i. ii. iii. iv. 3. a. - b. - c. - d. - 3. e. 4. f. g. d. i. ii. 5. h. i. 6. j. k. 7. l. 8. m. e. iii. 1. 2. 3. iv. 9. n. o. p. 10. q. r. 11. s. t. u. v. w. ***Say: A good acronym for the 5 causes of mechanical and electrical breakdown for EDP policies is DEEPS.*** 12. x. 13. y. 14. z. 15. a. ***Say: This would be a common procedure for most businesses to avoid interruption during a loss.*** f. v. 4. 5. vi. 6. 7. 8. 9. 10. 16. b. c. 17. d. 18. e. f. ***[Facilitator:] Discuss differences between a limited form (specifies what covered) and a comprehensive form (all risks limited by exclusions).*** 19. g. - - h. - - 20. i. 21. j. k. 22. l. m. ***Say: These type of expenses may be required in order to prevent further loss (e.g. prevent boiler from exploding).*** 23. n. g. vii. 11. 12. viii. ix. ***Say: When earthquake occurred in Abbotsford recently, there was a high demand to add the coverage on. There would be a time frame in which this would be restricted and would depend on if prior damage/loss due to earthquake.*** x. xi. 24. o. 25. p. ***Say: Coverage is extended by the earthquake endorsement to include landslide, snowslide, or other earth movements occurring concurrently with and directly resulting from an earthquake shock.*** 26. q. ***Say: The chart on 4-15 provides dates and magnitude scales of earthquakes in our history. Keep in mind the books last published date. There have been more recent earthquakes that have occurred in the past couple of years up until recently.*** h. xii. xiii. i. xiv. ***Say: In recent times, flood coverage has become more readily available with some insurers for personal lines. The definition of flood often includes that flood coverage is limited to fresh water flooding, so would not include for salt water flooding or tsunamis which often occur as a result of earthquake activity.*** ***Say: This is an area to have memorized and not required to know formula specifically.*** 27. r. s. 28. t. ***Say: An example would be if the building had asbestos and there was a loss there may be additional costs to remediate the asbestos and to bring the building up to current building standards and use of acceptable building materials.*** Section 2 -- Insuring Off Premises Exposures -------------------------------------------- ***Key terms for Section 2:*** - - - ***[Facilitator:] Questions and answers cover the areas of the CAIB textbook and are based on both the CAIB study guide and ILS online course.*** 1. a. b. 2. c. d. 3. e. 4. f. 5. g. h. 6. i. 7. j. k. 8. l. 9. m. 10. n. o. ***Say: A tire store may carry a higher level of winter tires from October to March than in other months of the year.*** 11. p. 12. q. r. s. 13. t. 14. u. v.