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).
   • 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.
   • D Written authority from an insurer allowing the person to bind coverage.

   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. Who may use the designation R.I.B. (Ont.)?

   • A Any person licensed as an insurance agent under the Insurance Act.
   • B Only the holder of a certificate as a registered insurance broker under the Registered Insurance Brokers Act. Correct
   • C Any employee of a registered brokerage who has passed an accredited insurance course.
   • D Any holder of the Chartered Insurance Professional designation from the Insurance Institute of Canada.

   Subsection 3(2) of the Registered Insurance Brokers Act requires the user of the title registered insurance broker or the designations R.I.B. (Ont.) and C.A.I. (Ont.) to be the holder of a certificate under the Act, because the restriction attaches to the certificate, completing a course or holding another licence carries no right to use them.

   RIB Act, s. 3(2)

3. A brokerage wants a larger operating line of credit. Its bank agrees, on condition that the brokerage pledge its premium receivables, the money owed by clients for policies placed with insurers, as security for the loan. The principal broker asks whether the brokerage can sign. What is the answer under the Registered Insurance Brokers Act?

   • A No, unless the Manager approves the pledge in writing before the loan is advanced.
   • B Yes, provided the amount pledged never exceeds the balance held in the brokerage's trust account.
   • C No. Those funds are deemed trust funds, and a member cannot assign, pledge or in any way charge them. Correct
   • D Yes, provided each affected insurer gives the brokerage written consent to the pledge.

   Section 32 of the Registered Insurance Brokers Act deems funds a member receives or has receivable on behalf of insurers or the public to be trust funds and prohibits a member from assigning, pledging, hypothecating, mortgaging or otherwise charging them, so the security the bank wants cannot be given.

   RIB Act, s. 32(1), (2)

4. While checking a renewal a broker notices that the insurer has applied a rating credit the client does not qualify for, which has lowered the premium. Which principle of the code of conduct in Regulation 991 speaks most directly to how the broker treats the insurer here?

   • A A member shall hold in strict confidence all information acquired in the course of the professional relationship.
   • B A member owes a duty to the client to be competent to perform the services the member undertakes on the client's behalf.
   • C A member shall discharge the member's duties to clients, members of the public, fellow members and insurers with integrity. Correct
   • D A member shall make the member's services available to the public in an efficient and convenient manner.

   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

5. Which minimum amounts must a brokerage maintain under section 20 of Regulation 991? Select all that apply.

   • A Fidelity insurance of at least $500,000 in respect of any one occurrence.
   • B Errors and omissions insurance of at least $1,000,000 in respect of any one occurrence.
   • C Fidelity insurance against losses arising from dishonesty of employees, a proprietor or partners, directors, officers and shareholders of at least $100,000 in respect of any one occurrence. Correct
   • D Errors and omissions (E&O) insurance with extended coverage for loss resulting from fraudulent acts, or another approved financial guarantee, of at least $3,000,000 in respect of any one occurrence. Correct

   Section 20 of Regulation 991 sets two separate minimums, because subsection (1) calls for at least $3,000,000 per occurrence of errors and omissions cover or another approved financial guarantee, and subsection (2) calls for at least $100,000 per occurrence of fidelity insurance.

   O. Reg. 991, s. 20(1)

6. Your client's property policy shows a bank as mortgagee, and the loss was made payable to the bank with the insurer's consent. The insurer terminates the policy for non-payment of premium and sends the termination notice to the client alone. Two weeks later the dwelling burns. Under section 147 of the Insurance Act, what is the bank's position?

   • A The insurer could not cancel the policy to the bank's prejudice without giving notice to the bank Correct
   • B Notice to the named insured was enough, because the bank is not a party to the contract
   • C The bank was entitled to twice the notice period given to the named insured
   • D The bank's interest ended automatically when the insured stopped paying the premium

   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. A property policy issued in Ontario prints a condition that cuts back one of the statutory conditions. Under section 148 (1) of the Insurance Act, what is the effect of that printed wording on the insured?

   • A It does not bind the insured, because no variation, omission or addition to a statutory condition is binding on the insured Correct
   • B It governs the claim, because the insured accepted the policy as issued
   • C It binds both parties once the insurer has filed the wording with the regulator
   • D It makes the entire policy void, because a statutory condition cannot be altered

   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. Your client starts renting out the basement of their owner-occupied home, a change material to the risk and squarely within the client's control and knowledge. The client notifies the insurer in writing the same week. The insurer writes back saying the contract can continue if the client pays an additional premium. Under statutory condition 4 of the Insurance Act, by when must the client pay it?

   • A Within fifteen days after the client receives the insurer's notice Correct
   • B Within fifteen days after the tenant moved into the basement
   • C Within thirty days after the client receives the insurer's notice
   • D At the next renewal of the contract

   Statutory condition 4 lets the insurer respond to a notified material change by asking for an additional premium, and the clock it sets is fifteen days from receipt of the insurer's notice, so the period runs from that notice rather than from the change itself.

   Insurance Act, s. 148, Statutory Condition 4 (Material Change)

9. Under statutory condition 6 of the Insurance Act, what must an insured do after a covered loss, in addition to giving written notice of the loss forthwith?

   • A Deliver a proof of loss to the insurer as soon as practicable, verified by a statutory declaration Correct
   • B Telephone the broker within 24 hours and confirm the details of the loss verbally
   • C Obtain two independent repair estimates before the insurer attends the site
   • D File the proof of loss with the court within sixty days after the loss

   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)

10. A contractor's blowtorch starts a fire that damages your client's insured home. The insurer pays the client's claim under the property contract. Under section 152 of the Insurance Act, what may the insurer do next?

    • A It is subrogated to the client's rights of recovery against the contractor and may bring an action in the client's name Correct
    • B It must wait for the client to sue the contractor first, then claim a share of whatever the client recovers
    • C It has no rights against the contractor, because the client has already been paid under the contract
    • D It may pursue the contractor only if the client signs a formal assignment of the claim after payment

    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. Under the Ontario Automobile Policy OAP 1, what determines whether a particular coverage applies to a specific automobile?

    • A The wording of the policy booklet describes the coverage and the insured received that booklet.
    • B The Certificate of Automobile Insurance shows a premium for that coverage, or shows the coverage is provided at no cost. Correct
    • C The insured named the coverage in the signed application for automobile insurance.
    • D The insurer accepted the risk and issued the policy without expressly excluding the coverage.

    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. Marc is stopped at a red light when another driver rear-ends him. The other driver admits fault at the scene and both cars are damaged. Marc is annoyed but not hurt and has not decided whether to claim. What does the Ontario Automobile Policy OAP 1 require him to do?

    • A Report the accident to his agent, broker or insurance company within seven days, even though he was not at fault. Correct
    • B Report the accident to his agent, broker or insurance company within 24 hours because property was damaged.
    • C Report the accident only if he decides to make a claim under his own policy.
    • D Report the accident to his agent, broker or insurance company within 30 days of the accident.

    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. Wanda drives from Ontario into a United States state where the required minimum liability limit is higher than the $500,000 limit shown on her Certificate of Automobile Insurance. She causes an accident there. How does her Ontario Automobile Policy OAP 1 respond?

    • 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.
    • C The insurer pays no more than the $500,000 limit shown on the Certificate.
    • D The policy does not respond at all, because coverage in another jurisdiction needs an endorsement.

    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

14. Under the Ontario Automobile Policy OAP 1, what time limits apply to a person applying for Accident Benefits?

    • A Tell the insurer within 24 hours of the accident, and return the completed application within 14 days of receiving it.
    • B Tell the insurer within 60 days of the accident, and return the completed application within 60 days of receiving it.
    • C Tell the insurer within 30 days of the accident, and return the completed application within seven days of receiving it.
    • D Tell the insurer within seven days of the accident, and return the completed application within 30 days of receiving it. Correct

    Section 4.2.1 of the Ontario Automobile Policy OAP 1 pairs a seven day notice of the accident with a 30 day period to return the completed application, so the shorter clock runs first and the longer one starts when the form arrives.

    OAP 1, Section 4.2.1

15. For policies entered into or renewed on or after July 1, 2026, which benefits must every insurer offer as optional benefits under Part II of the Statutory Accident Benefits Schedule (SABS)?

    • 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.
    • C The income replacement benefit only, with the non-earner and caregiver benefits remaining standard.
    • D The medical benefit, the rehabilitation benefit and the attendant care benefit.

    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. Under Section 6 of the Ontario Garage Automobile Policy OAP 4, when is no deductible payable by the insured on a specified perils claim for a customer's automobile?

    • A Where the loss or damage is caused by theft of the entire automobile.
    • B Where the loss or damage is caused by fire or lightning and those are insured perils. Correct
    • C Where the customer's automobile is damaged beyond repair.
    • D Where more than one customer's automobile is damaged in the same occurrence.

    Subsection 6.7 waives the deductible where fire or lightning causes the loss and those perils are insured, so the insured pays nothing toward a fire claim on a customer's automobile even though a deductible is stated in the certificate.

    OAP 4, subsection 6.7

17. A bakery's stock is insured under two property contracts placed by different brokers, both in force and both covering the same interest in that stock. A fire destroys $60,000 of stock. The two insurers have no written agreement between them about how a shared loss is handled. How is the loss settled?

    • A The insured picks one insurer, which pays the whole $60,000 and cannot recover any of it from the other.
    • B The insured may claim $60,000 under each contract and recover $120,000 in total.
    • C Each insurer is liable to the insured for its rateable proportion of the $60,000 loss. Correct
    • D The later contract is void for double insurance, so only the earlier contract responds.

    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)

18. Part IV of the Insurance Act carries the fire insurance statutory conditions. Which of the following covers, written for a commercial client, fall outside Part IV? Select all that apply.

    • A Business interruption insurance, where the subject matter of the insurance is loss of profits. Correct
    • B Insurance on the client's warehouse building against the peril of fire.
    • C Boiler and machinery insurance. Correct
    • D Insurance against loss or damage through theft, burglary or robbery. Correct
    • E Insurance on the client's stock of goods at a fixed location against the peril of fire.

    Subsection 143 (1) applies Part IV to insurance against fire damage to property but excepts boiler and machinery insurance, theft and burglary insurance, and insurance whose subject matter is rents, charges or loss of profits, so those three sit outside the fire statutory conditions.

    Insurance Act, s. 143(1)

19. A contractor asks whether the firm's automobiles can be written as a fleet. The firm runs six automobiles under one company name: five cargo vans used to carry tools and materials to job sites, and one car the owner drives for personal use. Does this group meet the definition of a fleet in Regulation 664?

    • A No, because a fleet needs at least ten automobiles under common ownership or management.
    • B Yes, because the group holds at least five automobiles, at least five of them are commercial vehicles, and they are under common ownership. Correct
    • C No, because every automobile in the group has to be a commercial vehicle or a public vehicle.
    • D Yes, because any group of automobiles under common ownership counts as a fleet once one of them is a commercial vehicle.

    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

20. Under the Registered Insurance Brokers Act, a person registered under the Travel Industry Act, 2002 may act without being a registered insurance broker in respect of which insurance?

    • A Travel accident and sickness, baggage or trip cancellation insurance Correct
    • B Any insurance the person places for a client who has booked travel through them
    • C Travel health insurance only, and no other travel-related product
    • D Travel accident and sickness insurance plus automobile insurance on a rental vehicle

    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)