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IIC Principles and Practice of Insurance Sample Questions:

1. What does the term "subject of insurance" refer to?

A) The perils associated with the risk
B) The type of wording applicable to the policy
C) The company providing the coverage
D) The thing being insured


2. Which problem could arise with an oral binder?

A) It is illegal in some provinces
B) The insurer did not secure privacy documentation
C) It may override a policy warranty
D) The intermediary may not have authority to bind coverage


3. If one in every five houses suffers a $50,000 loss each year, and all houses have the same value, what would the pure premium be for each homeowner?

A) $10,000
B) $2,500
C) $5,000
D) $100,000


4. Which statement best describes unearned premium?

A) The premium that covers the policy period that has expired
B) The premium that covers the policy duration that has not yet passed
C) The earned premium that has been paid out as the broker's commission
D) The accumulated premium that has not been paid out against a loss


5. Which financial outcome would be expected when engaging in a speculative risk?

A) Possibility of either gain or loss
B) No possibility of gain
C) No possibility of loss
D) Possibility of gain only


Solutions:

Question # 1
Answer: D
Question # 2
Answer: D
Question # 3
Answer: C
Question # 4
Answer: B
Question # 5
Answer: A

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