RIBO INSURANCE EVALUATION EXAM 2026 QUESTIONS
AND SOLUTIONS SCORED A+
✔✔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
Violence or fear - fear must be reasonable and present; fear of serious injury
✔✔What is another term for legal guardian used by Quebec? - ✔✔Tutor
✔✔What is the requirements of an insurance contracts? - ✔✔It includes the common
law contract elements with 3 additional components:
1) Insurable interest - legal relationship to the property and financially prejudiced by
loss/damage. As well, financially benefitted by its continued existence
2) Indemnity - to place someone back in the same financial position as prior to the loss
3) Utmost good faith - standard of honest greater than usually required in ordinary
contracts.. It involves the risk of what they are insuring. Insurer must answer all
questions.
✔✔What are the parties of a contract? - ✔✔1) Insured is the first party
2) Insurer is the second party
3) All other people involved are third party. Example: person involved in the collision
✔✔What is Salvage? - ✔✔remaining property after severe damage. Overall loss is
reduced by the salvage value
✔✔What is Subrogation? - ✔✔legal process by with an insurance company pursues the
right to recover amounts paid out for the loss from a legally responsible party.
✔✔What is Contribution? - ✔✔when more than one insurance policy covers a risk, they
share in the payment of the loss equitability.
✔✔Can the insurer sue in their own name? - ✔✔In Common Law provinces, they
cannot. In Quebec, the general policy conditions allow the insurer to sue in their own
name..
✔✔What is Materiality? - ✔✔a fact if known which affects the mind of a reasonable and
prudent insurer in the decision to accept. Example: withholding information about your
driving history
✔✔What is Misrepresentation? - ✔✔an incorrect statement made by a material fact or
omission of certain facts. It does not include forgetting - it is genuine intent to deny.
,✔✔What is non-disclosure or concealment? - ✔✔Withholding of information pertinent to
the risk - silence where there is an obligation to speak
✔✔What is The Policy? - ✔✔Insurance policy is the evidence of a contract and states
exactly terms and provisions of the agreement between insured and insurer.
✔✔What is a certificate of insurance? - ✔✔May be a modified form of a policy. It is
issued as a convenience to a party who may have an interest in the insurance. It
certifies the existence of the insurance. Example: the pink slip for your car for insurance.
✔✔What is an Endorsement? - ✔✔Used when changes are required during a policy
term. In insurance law, an endorsement means any writing on the back of a policy that
varies the terms of the contract. Example: change in coverages or address will require
an endorsement.
✔✔What are problems with temporary coverages? Oral binders? - ✔✔It has multiple
problems:
- was the contract ever created?
- does intermediary have the authority to bind?
- what are the contract provisions?
✔✔What are the contract provisions? - ✔✔A contract should include the following:
- Insurer's name
- Name and Address
- Address of risk
- Special Terms
- Time & Date of Commencement
- Amount of Insurance Bound
- Type and form of contract
- Expiry date and time
✔✔When does a policy become effective? - ✔✔It becomes effective at 12:01AM
✔✔What is Statutory Conditions? - ✔✔standardized conditions prescribed by provincial
insurance acts
✔✔What is General Conditions? - ✔✔minimum performance requirements for the
contract. It includes the rights and responsibilities of the parties involved..
✔✔What are the main policy sections? Explain each of the five sections. - ✔✔1)
Coverage Summary - a seperate page known as declarations and it includes parters in
the contact, dates of insured, premium and rate, and amounts insured
2) Insuring Agreements - the section states the policy wording so any ambiguity is
construed against the insurer if there is an disagreement. It includes subject matter of
, insurance, perils insured against, exclusions and circumstances under which the
insured receive compensation
3) Statutory Conditions/General Conditions - used for automobile, accident and
sickness and fire incidents.
4) Policy Conditions - It states the rights and duties of insured and insure
5) Signature Clause - It is signed by hand or under seal by CEO of insurer. It is
countersigned by a broker.
✔✔Can insurance be passed onto another? - ✔✔No, you cannot sell your insurance
with the vehicle when you sell it. Insurance is a personal contract.
✔✔What is pro-rata cancellation? - ✔✔Cancellation of an insurance policy or a bond
with the return premium credit being the full proportion of premium for the unexpired
term of the policy.
✔✔When can you cancel or void a policy? - ✔✔Insurer may cancel or void a policy if it
is a misrepresentation or non disclosure is evident.
✔✔What is done at a renewal of an insurance contract? - ✔✔Changes may be
necessary in the coverage and premium at renewal. The insurer will contact with a list of
policies set to renew.
✔✔What is mutual insurance company? - ✔✔An insurance company that is owned and
operated by it's policyholders.
✔✔What is subscribed capital? - ✔✔The amount of stock sold by a corporation
✔✔What is paid up capital? - ✔✔Represents the part of subscribed capital has been
paid in full by shareholders
✔✔What is underwriting profit? - ✔✔The amount of money and insurance company
gains as a result of his insurance operations. Excess of earned premiums collected over
loss payments and expenses
✔✔What is loss reserve? - ✔✔An amount carried as a liability insurance balance sheet
representing in respect of each claim an amount equal to the estimated final settlement
cost less any amounts already paid
✔✔What is an actuary? - ✔✔One who specializes in the mathematics of insurance,
mortality rates and the like.
✔✔What is Ratemaking? - ✔✔The process of compiling and analyzing data to establish
rates that accurately reflect the level of risk. Usually performed by actuaries.
AND SOLUTIONS SCORED A+
✔✔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
Violence or fear - fear must be reasonable and present; fear of serious injury
✔✔What is another term for legal guardian used by Quebec? - ✔✔Tutor
✔✔What is the requirements of an insurance contracts? - ✔✔It includes the common
law contract elements with 3 additional components:
1) Insurable interest - legal relationship to the property and financially prejudiced by
loss/damage. As well, financially benefitted by its continued existence
2) Indemnity - to place someone back in the same financial position as prior to the loss
3) Utmost good faith - standard of honest greater than usually required in ordinary
contracts.. It involves the risk of what they are insuring. Insurer must answer all
questions.
✔✔What are the parties of a contract? - ✔✔1) Insured is the first party
2) Insurer is the second party
3) All other people involved are third party. Example: person involved in the collision
✔✔What is Salvage? - ✔✔remaining property after severe damage. Overall loss is
reduced by the salvage value
✔✔What is Subrogation? - ✔✔legal process by with an insurance company pursues the
right to recover amounts paid out for the loss from a legally responsible party.
✔✔What is Contribution? - ✔✔when more than one insurance policy covers a risk, they
share in the payment of the loss equitability.
✔✔Can the insurer sue in their own name? - ✔✔In Common Law provinces, they
cannot. In Quebec, the general policy conditions allow the insurer to sue in their own
name..
✔✔What is Materiality? - ✔✔a fact if known which affects the mind of a reasonable and
prudent insurer in the decision to accept. Example: withholding information about your
driving history
✔✔What is Misrepresentation? - ✔✔an incorrect statement made by a material fact or
omission of certain facts. It does not include forgetting - it is genuine intent to deny.
,✔✔What is non-disclosure or concealment? - ✔✔Withholding of information pertinent to
the risk - silence where there is an obligation to speak
✔✔What is The Policy? - ✔✔Insurance policy is the evidence of a contract and states
exactly terms and provisions of the agreement between insured and insurer.
✔✔What is a certificate of insurance? - ✔✔May be a modified form of a policy. It is
issued as a convenience to a party who may have an interest in the insurance. It
certifies the existence of the insurance. Example: the pink slip for your car for insurance.
✔✔What is an Endorsement? - ✔✔Used when changes are required during a policy
term. In insurance law, an endorsement means any writing on the back of a policy that
varies the terms of the contract. Example: change in coverages or address will require
an endorsement.
✔✔What are problems with temporary coverages? Oral binders? - ✔✔It has multiple
problems:
- was the contract ever created?
- does intermediary have the authority to bind?
- what are the contract provisions?
✔✔What are the contract provisions? - ✔✔A contract should include the following:
- Insurer's name
- Name and Address
- Address of risk
- Special Terms
- Time & Date of Commencement
- Amount of Insurance Bound
- Type and form of contract
- Expiry date and time
✔✔When does a policy become effective? - ✔✔It becomes effective at 12:01AM
✔✔What is Statutory Conditions? - ✔✔standardized conditions prescribed by provincial
insurance acts
✔✔What is General Conditions? - ✔✔minimum performance requirements for the
contract. It includes the rights and responsibilities of the parties involved..
✔✔What are the main policy sections? Explain each of the five sections. - ✔✔1)
Coverage Summary - a seperate page known as declarations and it includes parters in
the contact, dates of insured, premium and rate, and amounts insured
2) Insuring Agreements - the section states the policy wording so any ambiguity is
construed against the insurer if there is an disagreement. It includes subject matter of
, insurance, perils insured against, exclusions and circumstances under which the
insured receive compensation
3) Statutory Conditions/General Conditions - used for automobile, accident and
sickness and fire incidents.
4) Policy Conditions - It states the rights and duties of insured and insure
5) Signature Clause - It is signed by hand or under seal by CEO of insurer. It is
countersigned by a broker.
✔✔Can insurance be passed onto another? - ✔✔No, you cannot sell your insurance
with the vehicle when you sell it. Insurance is a personal contract.
✔✔What is pro-rata cancellation? - ✔✔Cancellation of an insurance policy or a bond
with the return premium credit being the full proportion of premium for the unexpired
term of the policy.
✔✔When can you cancel or void a policy? - ✔✔Insurer may cancel or void a policy if it
is a misrepresentation or non disclosure is evident.
✔✔What is done at a renewal of an insurance contract? - ✔✔Changes may be
necessary in the coverage and premium at renewal. The insurer will contact with a list of
policies set to renew.
✔✔What is mutual insurance company? - ✔✔An insurance company that is owned and
operated by it's policyholders.
✔✔What is subscribed capital? - ✔✔The amount of stock sold by a corporation
✔✔What is paid up capital? - ✔✔Represents the part of subscribed capital has been
paid in full by shareholders
✔✔What is underwriting profit? - ✔✔The amount of money and insurance company
gains as a result of his insurance operations. Excess of earned premiums collected over
loss payments and expenses
✔✔What is loss reserve? - ✔✔An amount carried as a liability insurance balance sheet
representing in respect of each claim an amount equal to the estimated final settlement
cost less any amounts already paid
✔✔What is an actuary? - ✔✔One who specializes in the mathematics of insurance,
mortality rates and the like.
✔✔What is Ratemaking? - ✔✔The process of compiling and analyzing data to establish
rates that accurately reflect the level of risk. Usually performed by actuaries.
