Alberta Insurance Broker Licensing
Exam Practice (General Insurance)
Questions And Correct Answers
1. The Primary Role Of An Insurance Broker In Alberta Is To:
A. Represent The Insurer Exclusively
B. Sell Only Government Insurance Products
C. Act As An Intermediary Representing The Client
D. Underwrite Insurance Risks
Answer: C
Brokers In Alberta Owe Their Primary Duty To The Client And Act As
Intermediaries Between Clients And Insurers.
2. Which Legislation Primarily Governs Insurance Brokers In Alberta?
A. Criminal Code Of Canada
B. Insurance Act Of Alberta
C. Income Tax Act
D. Competition Act
Answer: B
The Alberta Insurance Act Sets Out Licensing, Conduct, And Regulatory
Requirements For Brokers.
, 3. What Is The Principle That Requires An Applicant To Disclose All
Material Facts?
A. Indemnity
B. Subrogation
C. Contribution
D. Utmost
Good Faith
Answer: D
Utmost Good Faith Obligates Both Parties To Fully Disclose Material Facts
Affecting The Risk.
4. A Material Fact Is Best Defined As A Fact That:
A. Increases Premiums
B. Is Requested On The Application
C. Would Influence The Insurer’s Decision To Accept Or Price The
Risk
D. Is Related To Claims History Only
Answer: C
Material Facts Are Those That Impact Underwriting Decisions.
5. Which Insurance Principle Restores The Insured To Their
Financial Position Prior To A Loss?
, A. Insurable Interest
B. Indemnity
C. Proximate Cause
D. Contribution
Answer: B
Indemnity Ensures The Insured Does Not Profit From A Loss.
6. Insurable Interest Must Exist:
A. At The Time Of Loss Only
B. At The Time Of Application Only
C. At The Time Of Loss For Property Insurance
D. At Policy Renewal
Answer: C
Property Insurance Requires Insurable Interest At The Time Of Loss.
7. Which Of The Following Is An Example Of A Moral Hazard?
A. Poor Construction Materials
B. Slippery Roads
C. Intentional Damage To Collect Insurance
D. Weather-Related Loss
Answer: C
Moral Hazard Involves Dishonest Or Intentional Actions Increasing Loss.
, 8. What Term Describes The Event That Sets A Loss In Motion?
A. Hazard
B. Peril
C. Proximate Cause
D. Risk
Answer: C
Proximate Cause Is The Dominant Cause Of The Loss.
9. Which Type Of Hazard Arises From Physical Conditions?
A. Moral Hazard
B. Morale Hazard
C. Physical Hazard
D. Legal Hazard
Answer: C
Physical Hazards Include Tangible Conditions Increasing Risk.
10. Which Policy Document Forms The Legal Contract
Between Insurer And Insured?
A. Application
B. Binder
Exam Practice (General Insurance)
Questions And Correct Answers
1. The Primary Role Of An Insurance Broker In Alberta Is To:
A. Represent The Insurer Exclusively
B. Sell Only Government Insurance Products
C. Act As An Intermediary Representing The Client
D. Underwrite Insurance Risks
Answer: C
Brokers In Alberta Owe Their Primary Duty To The Client And Act As
Intermediaries Between Clients And Insurers.
2. Which Legislation Primarily Governs Insurance Brokers In Alberta?
A. Criminal Code Of Canada
B. Insurance Act Of Alberta
C. Income Tax Act
D. Competition Act
Answer: B
The Alberta Insurance Act Sets Out Licensing, Conduct, And Regulatory
Requirements For Brokers.
, 3. What Is The Principle That Requires An Applicant To Disclose All
Material Facts?
A. Indemnity
B. Subrogation
C. Contribution
D. Utmost
Good Faith
Answer: D
Utmost Good Faith Obligates Both Parties To Fully Disclose Material Facts
Affecting The Risk.
4. A Material Fact Is Best Defined As A Fact That:
A. Increases Premiums
B. Is Requested On The Application
C. Would Influence The Insurer’s Decision To Accept Or Price The
Risk
D. Is Related To Claims History Only
Answer: C
Material Facts Are Those That Impact Underwriting Decisions.
5. Which Insurance Principle Restores The Insured To Their
Financial Position Prior To A Loss?
, A. Insurable Interest
B. Indemnity
C. Proximate Cause
D. Contribution
Answer: B
Indemnity Ensures The Insured Does Not Profit From A Loss.
6. Insurable Interest Must Exist:
A. At The Time Of Loss Only
B. At The Time Of Application Only
C. At The Time Of Loss For Property Insurance
D. At Policy Renewal
Answer: C
Property Insurance Requires Insurable Interest At The Time Of Loss.
7. Which Of The Following Is An Example Of A Moral Hazard?
A. Poor Construction Materials
B. Slippery Roads
C. Intentional Damage To Collect Insurance
D. Weather-Related Loss
Answer: C
Moral Hazard Involves Dishonest Or Intentional Actions Increasing Loss.
, 8. What Term Describes The Event That Sets A Loss In Motion?
A. Hazard
B. Peril
C. Proximate Cause
D. Risk
Answer: C
Proximate Cause Is The Dominant Cause Of The Loss.
9. Which Type Of Hazard Arises From Physical Conditions?
A. Moral Hazard
B. Morale Hazard
C. Physical Hazard
D. Legal Hazard
Answer: C
Physical Hazards Include Tangible Conditions Increasing Risk.
10. Which Policy Document Forms The Legal Contract
Between Insurer And Insured?
A. Application
B. Binder
