Where do you actually stand?

Every question in this diagnostic

1. Under the Registered Insurance Brokers Act, what must a person hold before acting as an insurance broker in Ontario?

   • A A licence issued by the Financial Services Regulatory Authority of Ontario (FSRA). The Act requires registration with the Registered Insurance Brokers of Ontario, not a Financial Services Regulatory Authority of Ontario licence: 'No person shall act as an insurance broker unless the person is a registered insurance broker under this Act.'
   • B Registration as an insurance broker under the Registered Insurance Brokers Act. Correct
   • C Employment with a registered brokerage, working under the principal broker's registration. Registration is personal. Section 2(2)(f) exempts only an employee of a registered person who is engaged solely in clerical or administrative duties, not one acting as a broker.
   • D Written authority from an insurer allowing the person to bind coverage. Authority from an insurer to bind coverage goes to what a broker may do once registered; section 2 still requires the person to be a registered insurance broker.

   Section 2 of the Registered Insurance Brokers Act bars any person from acting as an insurance broker unless that person is personally registered under the Act, so working at a registered firm or belonging to an industry association does not stand in for the individual's own registration.

   RIB Act, s. 2(1)

2. Marc charges companies a fee to advise them on their coverage and cannot bind any insurer. Under the Registered Insurance Brokers Act, what is he?

   • A Exempt from registration without binding authority. The definition expressly covers a person acting 'whether or not the person has agreements with insurers allowing the person to bind coverage and countersign insurance documents on behalf of insurers'.
   • B A fee-paid consultant, exempt from registration. The definition opens with 'any person who for any compensation, commission or other thing of value', so a fee paid by the client is compensation and keeps him inside it.
   • C A broker only once he places a contract. Placing a contract is only one of the listed activities; clause (c) captures consulting and advisory services on their own.
   • D An insurance broker. Correct

   The definition of insurance broker in section 1 of the Registered Insurance Brokers Act covers a person who deals directly with the public for compensation and provides consulting or advisory services about insurance, so binding authority is not what brings Marc inside the definition.

   RIB Act, s. 1

3. A registered broker wants to sell real estate on weekends. When is that allowed?

   • A Never; no other business is allowed at all. A flat prohibition overstates the rule, because subclause (iii) opens the door to 'such other business as the Qualification and Registration Committee considers appropriate'.
   • B Only with the Qualification and Registration Committee's approval, on its terms. Correct
   • C Whenever the second business involves no insurance selling. Clause 5(1)(b) restricts the individual's 'only business or employment', so a non-insurance business is not automatically acceptable.
   • D Once the principal broker approves it in writing and files it. The approval power sits with the Qualification and Registration Committee, not with the brokerage's principal broker.

   Section 5 of Regulation 991 limits a registered individual's business or employment to that of an insurance broker, or an insurance broker and life insurance agent, or such other business as the Qualification and Registration Committee considers appropriate, so the outside business needs that Committee's approval and terms rather than an office level sign off.

   O. Reg. 991, s. 5(1)(b)

4. What must a broker have, besides explaining the risks, before placing cover with an unlicensed insurer?

   • A Proof that the unlicensed insurer's premium is lower. Clause (c) turns on being unable to obtain sufficient insurance 'at reasonable rates or on the form of contract required' from licensed insurers, so a cheaper unlicensed price is not the test.
   • B The client's written consent to the placement. Correct
   • C Nothing more than a verbal go-ahead. Clause (b) requires 'the written consent of the member of the public', which a verbal instruction does not supply.
   • D Approval from the Financial Services Regulatory Authority of Ontario (FSRA). Subsection 10(1) asks for no regulator approval; one of the disclosed risks is in fact that 'The Chief Executive Officer has no authority under the *Insurance Act* in respect of the insurer.'

   Subsection 10(1) of Regulation 991 requires three things together before a placement with an unlicensed insurer, namely disclosure of the four listed risks, written consent from the client, and the inability to obtain sufficient insurance at reasonable rates or on the required form from licensed insurers, so a verbal go ahead leaves the second condition unmet.

   O. Reg. 991, s. 10(1)

5. Which principle of the Registered Insurance Brokers of Ontario (RIBO) Code of Conduct applies when a broker spots a rating credit that the client does not qualify for?

   • A Keep all information about the client's affairs in strict confidence. Paragraph 5 governs confidentiality of client information, which is not what the mispriced credit raises.
   • B Be competent to perform the services taken on for the client. Paragraph 2 is about competence in performing services for the client and says nothing about the broker's dealings with the insurer.
   • C Act with integrity toward insurers as well as toward clients. Correct
   • D Make the broker's services available to the public efficiently. Paragraph 10 addresses how a member makes services available to the public, not honesty toward an insurer.

   The first principle of the code of conduct in section 14 of Regulation 991 requires integrity toward insurers as well as toward clients, members of the public and fellow members, so the broker cannot quietly accept a credit the client has not earned.

   O. Reg. 991, s. 14, para. 1

6. Your insured's home policy shows a bank as mortgagee, with loss payable to it. The insurer cancels for non-payment, sends notice only to your insured, and the house then burns. Which statement is TRUE?

   • A The policy could not be cancelled against the bank without notice to the bank. Correct
   • B Notice to your insured was enough. The section applies exactly where loss is payable to "a person other than the insured", and it requires notice "to that person", not only to the insured.
   • C The bank was owed twice the notice given to your insured. Section 147 (2) sets the notice at "the same as notice of cancellation to the insured under the statutory conditions", not double it.
   • D The bank's interest ended when the premium went unpaid. Nothing in section 147 ends the payee's protection on non-payment; the protection is triggered by the insurer cancelling or altering the policy, whatever the reason.

   Section 147 (1) bars an insurer from cancelling or altering the policy to the prejudice of a consented loss payee without notice to that person, and section 147 (2) makes the length and manner of that notice the same as notice of cancellation to the insured, so the bank had to be told separately.

   Insurance Act, s. 147 (1)

7. Which statement about the statutory conditions in a home policy is TRUE?

   • A A change the insurer makes to one of them does not bind the insured. Correct
   • B Accepting the policy binds the insured to any change printed in it. Acceptance of the policy changes nothing; the subsection says "no variation or omission of or addition to any statutory condition is binding on the insured".
   • C A change binds both parties once the insurer files it with the regulator. Section 148 (1) sets no filing route that would make a variation binding on the insured; the conditions are deemed part of every contract in force in Ontario.
   • D Any change to one of them voids the whole policy. The consequence in the subsection is that the variation does not bind the insured, not that the contract fails; the statutory condition simply applies in its statutory form.

   Section 148 (1) deems the statutory conditions to be part of every contract in force in Ontario and requires them to be printed in the policy, then states that no variation, omission or addition binds the insured, so the cut-back wording simply fails against the insured while the rest of the policy stands.

   Insurance Act, s. 148 (1)

8. After a covered loss, what must your insured do besides giving the insurer written notice right away?

   • A Deliver a proof of loss as soon as practicable, sworn by statutory declaration. Correct
   • B Phone the broker within 24 hours and confirm the details verbally. A verbal call satisfies neither obligation: clause (a) requires notice "in writing" and clause (b) requires a proof of loss "verified by a statutory declaration".
   • C Get two independent repair estimates before the insurer attends the site. Statutory condition 6 requires an inventory and particulars from the insured, not independent repair estimates gathered before the insurer attends.
   • D File the proof of loss with the court within 60 days of the loss. The proof of loss is delivered to the insurer, not filed with a court; the sixty day period in statutory condition 12 is the insurer's time to pay after the proof is complete.

   Statutory condition 6 (1) sets two separate obligations after a loss: notice in writing forthwith under clause (a), and delivery of a proof of loss verified by a statutory declaration as soon as practicable under clause (b), so a sworn document is required on top of the notice.

   Insurance Act, s. 148, Statutory Condition 6 (1) (Requirements After Loss)

9. Within what period must an insured start an action against the insurer to recover a claim under a home policy?

   • A Within one year after the loss or damage occurs. Correct
   • B Within two years after the insurer denies the claim. Wrong on both counts: the condition sets one year, and it runs "next after the loss or damage occurs", not from a denial.
   • C Within one year after the insurer denies the claim. The length is right but the starting point is wrong; the condition counts from the loss or damage, not from the insurer's denial.
   • D Within two years after the loss or damage occurs. Two years is the general limitation period, but statutory condition 14 sets one year for a claim under this contract and bars a later action absolutely.

   Statutory condition 14 bars the action absolutely unless it is commenced within one year next after the loss or damage occurs, so the clock runs from the loss itself and not from any later step in the claim.

   Insurance Act, s. 148, Statutory Condition 14 (Action)

10. Your insured's home is damaged by a fire a contractor started with a blowtorch, and the insurer pays the claim. What may the insurer do next?

    • A Recover from the contractor, suing in your insured's name if it needs to. Correct
    • B Wait for your insured to sue, then claim a share of what is recovered. The subsection lets the insurer "bring action in the name of the insured", so it does not have to stand behind an action started by the client.
    • C Nothing, once your insured has been paid under the policy. Payment is the very event that triggers subrogation under the subsection, which attaches "upon making a payment or assuming liability therefor".
    • D Pursue the contractor only if your insured signs an assignment first. The right arises by statute on payment or on assuming liability for payment, so no signed assignment is required.

    Section 152 (1) subrogates the insurer to all rights of recovery of the insured against any person upon making a payment or assuming liability for one, and expressly lets the insurer sue in the name of the insured, so no separate step by the client is needed.

    Insurance Act, s. 152 (1)

11. Your insured asks when a coverage applies to her car under the Ontario Automobile Policy (OAP 1). Which statement is TRUE?

    • A It applies once she receives the policy booklet that describes it. The policy wording describes coverages generally, but the policy states that you only have a particular coverage for a specific automobile if the Certificate shows a premium or no-cost entry for it.
    • B It applies where her Certificate shows a premium or no cost for it. Correct
    • C It applies once she has asked for it in the signed application. The signed application is one of the three documents making up the contract, but a request in the application does not by itself turn a coverage on for an automobile.
    • D It applies unless the insurer has issued the policy excluding it. Optional coverages are granted by being shown on the Certificate, not by the absence of an exclusion in the policy.

    Section 1.1 of the Ontario Automobile Policy OAP 1 makes the Certificate of Automobile Insurance the document that switches a coverage on, so a coverage exists for an automobile only where the Certificate shows a premium for it or shows it at no cost.

    OAP 1, Section 1.1

12. Your insured is rear-ended at a red light. The other driver admits fault, and your insured is not hurt and has not decided whether to claim. What does his Ontario Automobile Policy (OAP 1) require?

    • A Report it to his agent, broker or insurer within seven days. Correct
    • B Report it to his agent, broker or insurer within 24 hours. Twenty-four hours is not the OAP 1 period; the policy states the report is due within seven days.
    • C Report it only if he decides to claim under his own policy. The duty applies regardless of who is at fault and does not depend on the insured deciding to claim.
    • D Report it to his agent, broker or insurer within 30 days. Thirty days is the period for returning a completed Accident Benefits application, not the accident reporting period.

    Section 1.4.4 of the Ontario Automobile Policy OAP 1 sets a seven day reporting duty for any accident involving injury or property damage and says it applies regardless of who is at fault, so a not-at-fault insured still has to report.

    OAP 1, Section 1.4.4

13. Ali takes delivery of a second car and calls his broker 22 days later to add it. His insurer covers every car he owns. How long did he have to tell the insurer?

    • A No limit while every car he owns is with that insurer. Insuring all owned automobiles is one condition for covering an additional automobile, but it does not remove the separate 14 day notice requirement.
    • B 30 days from delivery. Thirty days is not the newly acquired automobile period; the policy fixes it at 14 days from the time of delivery.
    • C No limit for an added car, only for a replacement car. The 14 day notice applies to both replacement and additional automobiles, and a replacement simply takes the coverage of the automobile it replaces.
    • D 14 days from delivery. Correct

    Section 2.2.1 of the Ontario Automobile Policy OAP 1 insures a newly acquired automobile only if the insured tells the insurer within 14 days of delivery and pays any additional premium, and Ali reported on day 22, so the extension had already run out.

    OAP 1, Section 2.2.1

14. Wanda drives from Ontario into a United States state where the required minimum liability limit is higher than the $500,000 limit on her Certificate, and she causes an accident there. What does her OAP 1 policy pay?

    • A The insurer honours the higher minimum limit required in that jurisdiction. Correct
    • B The insurer pays the $500,000 limit and Wanda is personally responsible for the difference. The insurer honours the higher amount itself, so the shortfall does not fall on the insured.
    • C The insurer pays no more than the $500,000 limit shown on the Certificate. The section exists precisely to lift the payment above the Certificate limit where the local minimum is higher.
    • D The policy does not respond at all without an endorsement for that state. The United States is inside the territory the policy already covers, so no endorsement is needed for the policy to respond.

    Section 3.3.3 of the Ontario Automobile Policy OAP 1 says that where an incident happens in a covered jurisdiction whose required minimum liability limit is higher than the limit on the Certificate, the insurer honours the higher amount, so the Ontario limit does not cap the payment.

    OAP 1, Section 3.3.3

15. Which accident benefits must every insurer offer as optional coverage on policies issued or renewed on or after July 1, 2026?

    • A The income replacement benefit, the non-earner benefit and the caregiver benefit. Correct
    • B The death benefit, the funeral benefit and the caregiver benefit. The death and funeral benefits are made optional by section 25.1, not by section 4.1, and the caregiver benefit does not sit with them.
    • C The income replacement benefit only, with the non-earner and caregiver benefits still standard. All three Part II weekly benefits became optional together, so the non-earner and caregiver benefits are not left as standard entitlements.
    • D The medical benefit, the rehabilitation benefit and the attendant care benefit. Medical, rehabilitation and attendant care benefits sit in Part III and remain standard benefits rather than optional ones.

    Section 4.1 of the Statutory Accident Benefits Schedule (SABS) requires every insurer to offer an income replacement benefit, a non-earner benefit and a caregiver benefit as optional benefits, so from July 1, 2026 those three are bought rather than included automatically.

    SABS, s. 4.1 (1)

16. Two property policies placed by different brokers cover the same bakery stock. Fire destroys $60,000 of it. What does each insurer pay?

    • A The whole loss, where the insured picks that insurer. The insured is not put to an election, because the statute makes each insurer 'liable to the insured for its rateable proportion of the loss'.
    • B $60,000 Rateable contribution prevents double recovery, since the insured is indemnified for the loss and not once per contract.
    • C Its rateable proportion of the loss. Correct
    • D Nothing from the later insurer; its policy is void. Neither contract is void for the existence of the other, and the statute deems a contract in force even where it says it will not attach until another policy pays.

    Subsection 150 (1) of the Insurance Act splits a loss between contracts covering the same interest by rateable proportion unless the insurers have expressly agreed otherwise in writing, so both insurers contribute and the bakery is indemnified once.

    Insurance Act, s. 150(1)

17. Your insured, a contractor, runs six automobiles under one company: five cargo vans for job sites and one car the owner drives personally. Which statement is TRUE about the six automobiles?

    • A They fall short of a fleet, which needs at least ten automobiles. Ten is too high a bar, because the definition reads 'a group of not fewer than five automobiles'.
    • B They qualify as a fleet. Correct
    • C They fall short of a fleet while one of them is a personal car. The regulation asks only that at least five of the automobiles in the group be commercial vehicles, public vehicles or vehicles used for business purposes, so a personal car in the group does not spoil it.
    • D Any one commercial vehicle among them makes the group a fleet. One commercial vehicle is not enough, since the group must hold at least five automobiles and at least five of them must meet the vehicle-use test.

    Regulation 664 sets the floor at five automobiles with at least five of them commercial vehicles, public vehicles or vehicles used for business purposes, so the five cargo vans carry the group over the line even though the sixth automobile is personal.

    R.R.O. 1990, Reg. 664, s. 1

18. What amount of insurance does a co-insurance clause on a commercial property form require the insured to carry?

    • A The full actual cash value. The requirement is a percentage of actual cash value rather than the whole of it, and falling short reduces the recovery rather than defeating the claim.
    • B The full replacement cost. Replacement cost only becomes the measure where a replacement cost endorsement is added, and the clause as written measures against actual cash value.
    • C The stated percentage of each loss. The percentage is applied to the value of the property, not to the size of the loss.
    • D The stated percentage of actual cash value. Correct

    The clause obliges the insured to carry insurance of at least the actual cash value multiplied by the co-insurance percentage on the declaration page, and where less is carried the recovery is the loss multiplied by insurance carried over insurance required.

    Commercial Property Named Perils Form C100, clause 4 (Co-Insurance) Reference document, not law.

19. Who are the three parties to a surety bond?

    • A The insured, the insurer and the broker who arranged the bond. A broker arranges the bond and is not a party to it, and a surety bond is not written as a two party insurance contract.
    • B The contractor, the project owner and the owner's lender. Those are commercial roles rather than the names the bond gives its parties, and the lender is not bound by the bond.
    • C The principal, the surety and the obligee. Correct
    • D The applicant, the underwriting company and its reinsurer. A reinsurer stands behind the surety and takes no place in the bond itself.

    A bond binds the principal, who owes the obligation, and the surety, who guarantees it, to the obligee for whose benefit the guarantee is given, so suretyship is a three party arrangement where insurance is a contract between two.

    Bid bond, form PWGSC-TPSGC 504, Bond recital Reference document, not law.

20. Which insurance may a travel agent who is not a registered insurance broker sell with bookings?

    • A Travel accident and sickness, baggage or trip cancellation insurance. Correct
    • B Any insurance for a client who books travel with them. The exemption is limited by its own words to a registrant 'acting in respect of travel accident and sickness, baggage or trip cancellation insurance', so it does not reach every class of insurance sold alongside a booking.
    • C Travel health insurance only. Travel health is only part of the named list; baggage and trip cancellation appear in the same clause, so restricting the exemption to health cover understates it.
    • D Travel accident and sickness insurance plus auto insurance on a rental car. Automobile insurance is not named in the clause, so placing it would fall back under the general prohibition that 'No person shall act as an insurance broker unless the person is a registered insurance broker under this Act.'

    Section 2 of the Registered Insurance Brokers Act lifts the broker registration requirement for a Travel Industry Act registrant only in respect of travel accident and sickness, baggage and trip cancellation insurance, so anyone placing a class outside that short list is acting as an insurance broker and must be registered.

    RIB Act, s. 2(2)(e)