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C11 Exam Guide - Study C11 Demo
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IIC Principles and Practice of Insurance Sample Questions (Q75-Q80):
NEW QUESTION # 75
An insurer's agency or production department is the equivalent of which department in other businesses?
- A. Administration and human resources
- B. Sales and marketing
- C. Finance and production
- D. Information technology and business services
Answer: B
Explanation:
The agency or production department within an insurance company is responsible for generating new business, managing distribution channels, working with brokers and agents, and promoting the insurer's products. These functions align directly with sales and marketing departments found in other industries. Their goals include increasing premium volume, maintaining relationships with intermediaries, and ensuring the insurer's products reach the marketplace effectively.
Option B is incorrect because finance and production refer to cost control and manufacturing, neither of which parallels insurance distribution. Option C does not align because administration and HR handle internal operations, not customer acquisition. Option D deals with internal systems and support functions, unrelated to the business-production role of generating and selling insurance.
Therefore, the insurer's agency or production department corresponds to A: Sales and marketing.
NEW QUESTION # 76
What type of wording is written on a custom basis for a specific situation?
- A. Standard
- B. Treaty
- C. Chattel
- D. Manuscript
Answer: D
Explanation:
Amanuscript wordingis a policy or endorsement crafted specifically for an individual client or an unusual risk exposure. It iscustom-writtenand negotiated between the insurer and the insured (or their broker). These wordings are used when standard forms do not adequately describe or protect a particular exposure, usually for large commercial clients, unique operations, or highly specialized risks.
Option A refers tostandardwordings, which are pre-written, commonly used forms approved by insurers or industry bodies.
Option B (chattel) refers to movable personal property, not policy wording.
Option C (treaty) refers to reinsurance agreements between insurers and reinsurers, not client-facing policy forms.
Therefore, the only option describing a custom-written policy wording isD: Manuscript.
NEW QUESTION # 77
How would a moving and storage company benefit from purchasing insurance to cover customers' goods while in transit?
- A. Greater acquisition potential
- B. Opportunity for more subscription policies
- C. More capital for business ventures
- D. Provides a feeling of security
Answer: A
Explanation:
Purchasing insurance that covers customers' goods in transit enhances the company's ability toattract more clients, which is referred to asgreater acquisition potential. Clients feel more confident choosing a mover that offers protection for their belongings, especially when transporting high-value items. This competitive advantage increases business opportunities and strengthens the company's reputation.
Option B-"feeling of security"-is a benefit but applies to theinsured party, not the business's competitive positioning. Option C is incorrect because purchasing insurance does not provide additional capital; it is a business cost. Option D (subscription policies) has no connection to transit insurance.
Therefore, the most direct business benefit for the moving company isA: Greater acquisition potential.
NEW QUESTION # 78
Which statement describes a primary function of a telephone adjuster?
- A. Process a large volume of claims
- B. Act as a liaison between the intermediary and the insurer
- C. Process all paperwork for independent examiners
- D. Authorize repairs suggested by the staff adjuster
Answer: A
Explanation:
A telephone adjuster (often called an inside adjuster) handles claims that can be resolved quickly without requiring in-person investigation. Their main role is to efficiently process a high volume of straightforward claims, such as small auto physical-damage losses, minor property losses, and simple theft claims.
Because these claims do not require field investigations, telephone adjusters focus on gathering information by phone, confirming coverage, arranging payments, and closing files promptly.
Option B is incorrect-telephone adjusters do not take instructions from staff adjusters; they operate independently within their own authority levels.
Option C is incorrect-they do not process paperwork for independent adjusters.
Option D is incorrect-they are not intermediaries; they serve the insurer directly.
The correct function is A: processing a large volume of claims.
NEW QUESTION # 79
In their property insurance application, a Quebec client stated there wasnohome business. The underwriter binds the policy without knowing the client runs a daycare in a detached garage. If a loss occurs, will there be consequences?
- A. Yes; any claims will be subject to an increased deductible depending on the size of the loss
- B. No; in-home businesses with a low to medium hazard grade do not affect eligibility
- C. No; as long as the homeowner has at least three years' experience in the business
- D. Yes; if the concealment is proven it could result in the contract being nullified
Answer: D
Explanation:
Insurance contracts rely on the principle ofutmost good faith, requiring applicants to disclose allmaterial facts-facts that would influence an underwriter's decision to accept, decline, or rate a risk. Operating a home daycare is unquestionably amaterial change in exposure, as it increases traffic, liability hazards, and occupancy risk. Even though the daycare is conducted in a detached garage, it still forms part of the premises insured.
If the clientmisrepresentsorfails to disclosethis information, and the insurer can prove concealment, the insurer mayvoid the policy ab initio (from the beginning)or deny the claim. This applies in Quebec as well, whose Civil Code also requires truthful disclosure of material risks.
Options A and B describe conditions that do not exist in Canadian property insurance.
Option D is incorrect because even low-hazard home businesses must be disclosed.
Thus,Cis correct.
NEW QUESTION # 80
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