Last Updated: Jul 08, 2026
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1. Original Insurance Company terminated its broker agreement with TOY Insurance Brokers. Which situation likely resulted in this termination?
A) TOY Insurance Brokers did not remit commissions owed to the insurer
B) Original Insurance Company did not set service standards
C) TOY Insurance Brokers did not keep premiums in a trust account and used them to pay expenses
D) Original Insurance Company provided quotes on all broker applications
2. With respect to an insurance contract, what is the best example ofconsideration?
A) Jennifer agrees to sell a $20,000 painting for $10,000 to her friend Shania
B) Calvin wants to start a tutoring business and may charge $40 per hour
C) Yasmin offers to sell her dog for $500 but Paula refuses
D) Martin is returning a shirt he purchased online for $35 because he found it cheaper elsewhere
3. Ivana is in an auto accident. The agreed market value of her vehicle is$17,000.
Her policy deductible is$1,500.
A wrecking company offers$3,000for the salvage.
Ivana chooses tokeep the salvage.
What amount will Ivana receive?
A) $17,000
B) $12,500
C) $14,000
D) $15,500
4. Which statement best describes a valued contract?
A) The insured can reject settlement offers and force a higher payout
B) Settlements involve periodic payments due to the nature of valuation
C) The policy pays the full cost of replacing items even if this amount exceeds policy limits
D) Settlements are based on a predetermined amount agreed upon at contract formation
5. Maritime Insurance has met all requirements to be incorporated as an insurance company in Canada. Why would it prefer to incorporate under the Nova Scotia provincial statute rather than the federal statute?
A) Another company with the same name is already federally licensed
B) It plans to sell insurance nationally but operate out of one Nova Scotia office
C) It requires no capitalization
D) It intends to only do business in Nova Scotia
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: A | Question # 3 Answer: B | Question # 4 Answer: D | Question # 5 Answer: D |
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