RIBO INSURANCE COMPREHENSIVE EXAM 2026
QUESTIONS AND SOLUTIONS SCORED A+
✔✔What is actual cost value (ACV)? - ✔✔determined in one of three ways: cost to
repair, fair market value or consideration of evidence of value
✔✔What are the two most popular forms of valuation in indemnification? - ✔✔Actual
cash value (ACV) and replacement value (cost)
✔✔What is replacement value? What is guaranteed replacement cost? -
✔✔Replacement value is the current market value to replace. Guaranteed replacement
pays for replacement cost without depreciation and can exceed the amount of insurance
on the dwelling.
✔✔What is value contracts? - ✔✔It is an alternative calculation method where a
predetermined amount is agreed upon by the insure and insured at the time the contract
is made. It is usually done on items where it is difficult to determine a true value after
loss.
✔✔What is General Insurance? - ✔✔General insurance includes property and casualty
insurance. It is also referred to as P&C insurance. Property is the loss or loss of income
caused by a covered peril. Causality refers to areas not covered by fire, life or auto
which would be burglary or liability.
✔✔What are the four groups of insurers? - ✔✔1) For profit - stock companies
2) Co-operative - mutuals & reciprocals
3) Government - worker's compensation
4) Captive - policy holders limited to parent company and subsidiaries
✔✔Stock Companies (For Profit) - ✔✔a group of shareholders put interest in the asset
and expect a profit on the investment (Lloyds is an example).
✔✔Outstanding Loss Reservers - ✔✔funds set aside to pay for losses that have been
incurred but not yet paid for
✔✔Factory Mutuals - ✔✔Insurance companies of the mutual type that specialize in
industrial risks and in loss prevention
✔✔How do insurers distribute their insurance? - ✔✔Use of brokers, agents, direct
writers and Insuretech (similar to Kanetix)
✔✔Independent Brokerage System - ✔✔system in which independent insurance
professionals, licensed as brokers, sell insurance on behalf of an insurer or multiple
insurers they have contracts with
,✔✔Insurer - ✔✔insurance company (this is different than an insurance broker)
✔✔Exclusive Agency Companies - ✔✔agents who represent only one company - they
are not employees of the insurance company. There is a commission based model and
they pay their own expenses. Client belongs to the company not the agent.
✔✔Direct Writing Companies - ✔✔deals directly with the public - insurance company
agents sell policies to prospective insureds. Agents are employees of the company and
paid salary based with commission. Clients belong to the insurance company.
✔✔Common Law - ✔✔Exists everywhere besides Quebec. Agents are employed to
secure contracts and act for an employer in contractual matters. Brokers are employed
for Insurance
✔✔Types of Agency Contracts - ✔✔Express - terms explicitly stated (age over 25 -
example)
Implied - parties have acted in a way which suggests a relationship exists (example -
allowing someone under age requirement)
✔✔Function of Insurance Intermediaries - ✔✔Basic function is to assist in completing
insurance contracts between client and insurer. They are required to stay within the
scope of the contract with the insurer and the authority of intermediary's license.
✔✔Binding authority - ✔✔ability to confirm coverage to a client on behalf of the insurer
✔✔Cover Note - ✔✔when binding coverage, a cover note is a document sent to the
insurer immediately. It serves as the written binder. Binders and cover notes are usually
used interchangeably. As the broker, we only discharge our duty when all parties
receive confirmation
✔✔Who has ownership of the premiums? - ✔✔Brokers are to collect funds which are
owned by the insurer and held in trust until remitted to insurer
✔✔Trust Account - ✔✔premiums collected for policies insured are held until remitted to
insurer
✔✔Operating Account - ✔✔general business items such as commissions earned and
general expenses
✔✔What is an example of Captive Insurance? - ✔✔Walmart - as they own their own
insurance and all decisions come under the parent company
✔✔What does RIBO stand for? - ✔✔Registered Insurance Brokers of Ontario
, ✔✔What are the qualifications for RIBO? - ✔✔Most provinces require minimum
qualifications and completion of an exam on insurance knowledge and government
regulations. This is overseen by the government's regulators
✔✔How often do you need to renew your insurance license? - ✔✔Every year, the
license requires renewal. It may include continuing education courses.
✔✔What are the requirements of a contract? - ✔✔To be considered a contract, there
has to be an agreement to do something and something has to be enforceable by law.
No formal agreement means it is not contractual. Example: you cannot agree to do
something but have it break the law, the contract is void such as burning down a house.
✔✔*What is a legally binding contract?* (Common Law Contracts) - ✔✔Agreement - an
offer by one party and an acceptance by second party
Consideration - it must include price/value and in the present or future (money or sealed
documents)
Capacity to legally contract - persons must not be minor, insane, impaired or mentally
incompetent
Genuine intention - beyond just agreement, there has to be true intention involved
Legality of Purpose - contract requires to be legal from all aspects (cannot break a law
or public policy)
A.C.C.G.L (A Cool Cat Gets Lucky) in it's underwear
✔✔Void - ✔✔It never existed - completely empty
✔✔Voidable - ✔✔It can be cancelled - allows for withdrawal
✔✔What is legally binding contract? (Quebec Civil Code) - ✔✔Consent - agreement
requires an offer and acceptance. It can have an expiry date.
Capacity to contract - ability to act judiciously and implied except for those who are
incapable (legally allowed to contract)
Cause of Contract - consideration of a person undertaking the fulfilment of the obligation
Object of Contract - something a party is obligated to give, do or not do
✔✔What are the similarities of Common Law and Quebec Civil Code? -
✔✔Agreement/Genuine Intent - Consent
Legal Capacity - capacity to contract
Consideration - cause of contract
Legality of purpose - object of contract
✔✔What causes nullity in contracts? - ✔✔ELF - V
Error - occurs in the nature of the contract of substance of the object
Lesion - minors or interdicted persons who act without legal guardian (minors)
Fraud - a party conceals or misrepresents vital information
QUESTIONS AND SOLUTIONS SCORED A+
✔✔What is actual cost value (ACV)? - ✔✔determined in one of three ways: cost to
repair, fair market value or consideration of evidence of value
✔✔What are the two most popular forms of valuation in indemnification? - ✔✔Actual
cash value (ACV) and replacement value (cost)
✔✔What is replacement value? What is guaranteed replacement cost? -
✔✔Replacement value is the current market value to replace. Guaranteed replacement
pays for replacement cost without depreciation and can exceed the amount of insurance
on the dwelling.
✔✔What is value contracts? - ✔✔It is an alternative calculation method where a
predetermined amount is agreed upon by the insure and insured at the time the contract
is made. It is usually done on items where it is difficult to determine a true value after
loss.
✔✔What is General Insurance? - ✔✔General insurance includes property and casualty
insurance. It is also referred to as P&C insurance. Property is the loss or loss of income
caused by a covered peril. Causality refers to areas not covered by fire, life or auto
which would be burglary or liability.
✔✔What are the four groups of insurers? - ✔✔1) For profit - stock companies
2) Co-operative - mutuals & reciprocals
3) Government - worker's compensation
4) Captive - policy holders limited to parent company and subsidiaries
✔✔Stock Companies (For Profit) - ✔✔a group of shareholders put interest in the asset
and expect a profit on the investment (Lloyds is an example).
✔✔Outstanding Loss Reservers - ✔✔funds set aside to pay for losses that have been
incurred but not yet paid for
✔✔Factory Mutuals - ✔✔Insurance companies of the mutual type that specialize in
industrial risks and in loss prevention
✔✔How do insurers distribute their insurance? - ✔✔Use of brokers, agents, direct
writers and Insuretech (similar to Kanetix)
✔✔Independent Brokerage System - ✔✔system in which independent insurance
professionals, licensed as brokers, sell insurance on behalf of an insurer or multiple
insurers they have contracts with
,✔✔Insurer - ✔✔insurance company (this is different than an insurance broker)
✔✔Exclusive Agency Companies - ✔✔agents who represent only one company - they
are not employees of the insurance company. There is a commission based model and
they pay their own expenses. Client belongs to the company not the agent.
✔✔Direct Writing Companies - ✔✔deals directly with the public - insurance company
agents sell policies to prospective insureds. Agents are employees of the company and
paid salary based with commission. Clients belong to the insurance company.
✔✔Common Law - ✔✔Exists everywhere besides Quebec. Agents are employed to
secure contracts and act for an employer in contractual matters. Brokers are employed
for Insurance
✔✔Types of Agency Contracts - ✔✔Express - terms explicitly stated (age over 25 -
example)
Implied - parties have acted in a way which suggests a relationship exists (example -
allowing someone under age requirement)
✔✔Function of Insurance Intermediaries - ✔✔Basic function is to assist in completing
insurance contracts between client and insurer. They are required to stay within the
scope of the contract with the insurer and the authority of intermediary's license.
✔✔Binding authority - ✔✔ability to confirm coverage to a client on behalf of the insurer
✔✔Cover Note - ✔✔when binding coverage, a cover note is a document sent to the
insurer immediately. It serves as the written binder. Binders and cover notes are usually
used interchangeably. As the broker, we only discharge our duty when all parties
receive confirmation
✔✔Who has ownership of the premiums? - ✔✔Brokers are to collect funds which are
owned by the insurer and held in trust until remitted to insurer
✔✔Trust Account - ✔✔premiums collected for policies insured are held until remitted to
insurer
✔✔Operating Account - ✔✔general business items such as commissions earned and
general expenses
✔✔What is an example of Captive Insurance? - ✔✔Walmart - as they own their own
insurance and all decisions come under the parent company
✔✔What does RIBO stand for? - ✔✔Registered Insurance Brokers of Ontario
, ✔✔What are the qualifications for RIBO? - ✔✔Most provinces require minimum
qualifications and completion of an exam on insurance knowledge and government
regulations. This is overseen by the government's regulators
✔✔How often do you need to renew your insurance license? - ✔✔Every year, the
license requires renewal. It may include continuing education courses.
✔✔What are the requirements of a contract? - ✔✔To be considered a contract, there
has to be an agreement to do something and something has to be enforceable by law.
No formal agreement means it is not contractual. Example: you cannot agree to do
something but have it break the law, the contract is void such as burning down a house.
✔✔*What is a legally binding contract?* (Common Law Contracts) - ✔✔Agreement - an
offer by one party and an acceptance by second party
Consideration - it must include price/value and in the present or future (money or sealed
documents)
Capacity to legally contract - persons must not be minor, insane, impaired or mentally
incompetent
Genuine intention - beyond just agreement, there has to be true intention involved
Legality of Purpose - contract requires to be legal from all aspects (cannot break a law
or public policy)
A.C.C.G.L (A Cool Cat Gets Lucky) in it's underwear
✔✔Void - ✔✔It never existed - completely empty
✔✔Voidable - ✔✔It can be cancelled - allows for withdrawal
✔✔What is legally binding contract? (Quebec Civil Code) - ✔✔Consent - agreement
requires an offer and acceptance. It can have an expiry date.
Capacity to contract - ability to act judiciously and implied except for those who are
incapable (legally allowed to contract)
Cause of Contract - consideration of a person undertaking the fulfilment of the obligation
Object of Contract - something a party is obligated to give, do or not do
✔✔What are the similarities of Common Law and Quebec Civil Code? -
✔✔Agreement/Genuine Intent - Consent
Legal Capacity - capacity to contract
Consideration - cause of contract
Legality of purpose - object of contract
✔✔What causes nullity in contracts? - ✔✔ELF - V
Error - occurs in the nature of the contract of substance of the object
Lesion - minors or interdicted persons who act without legal guardian (minors)
Fraud - a party conceals or misrepresents vital information
