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IIC Advanced Skills for the Insurance Broker and Agent Sample Questions:

1. Davies Architect has opened two new offices in the last quarter. Its recent claims history includes a break-in at its head office a month ago and legal action against the firm due to a structural mistake made by the architect and engineer six months ago. The firm's insurance broker is reviewing its current insurance program, and the renewal date is in two months. Due to stable market conditions, there have been no recent changes made by insurers to policy wordings or pricing. The firm has been very cooperative with providing information. Briefly discuss how the broker would review the renewal for this architectural firm.


2. The question of whether an employee might convert cash or cheques for her own use would be considered when underwriting which policy coverages?

A) Business interruption
B) Property
C) Crime
D) Liability


3. What does pure risk entail?

A) Chance of profit without loss
B) Chance of loss without gain
C) Only gain
D) Either gain or loss


4. What is the purpose of a letter of authorization?

A) Acts as express written permission for the broker to bind any policies on behalf of the insurer
B) Directs the underwriter to deal with the broker named in the letter on the particular client's account
C) Confirms the exclusive business agreement between the intermediary and the insurance company
D) Permits an insured to nominate a legal representative to speak and transact business on her behalf


5. A major automotive manufacturer is launching a line of electric vehicles. It intends to outsource the production of the vehicle batteries to a new supplier. The manufacturer's risk manager has requested that the supplier provide evidence of comprehensive vendor liability insurance, before the contract can be finalized.
What is the likely reason for the request?

A) The manufacturer wants to ensure that the supplier prioritizes its work over other manufacturers.
B) The manufacturer wants to be compensated in the event of the supplier's failure to perform the contract.
C) The manufacturer does not want to be held responsible for the supplier's contractual liability claims.
D) The manufacturer does not want to be held responsible for product liability claims.


Solutions:

Question # 1
Answer: Only visible for members
Question # 2
Answer: C
Question # 3
Answer: B
Question # 4
Answer: B
Question # 5
Answer: D

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