CAIB 4 ACTUAL FINAL EXAM QUESTIONS AND
ANSWERS
What is Differential Advantage? - ANSWER Any FEATURE, SERVICE, or PRODUCT
that sets it apart from others and provides and an advantage.
Define Demographics and list 6 subtypes, explain each: - ANSWER Grouping
clients together based on personal information such as age, gender, life-cycle,
education, occupation, ethnicity.
What are the three basic principles for selecting target market segments? -
ANSWER 1) The brokerage must exercise care target segments are compatible
with the GOALS AND IMAGE of the brokerage,
2) The brokerage must be able to match RESOURSES to the target markets
3) Consider potential of segment to generate sufficient business and income to
make the initiative worthwhile.
What are the four basic target market strategies that can be used to develop the
four Ps? - ANSWER 1) Undifferentiated - One marketing approach for entire
market.
2) Differentiated - Different marketing mix for each of the target markets
3) Niche Marketing - Only one target market and concentrate all efforts on that
market
4) Customized Marketing - A selective marketing mix for each client
,Under the provisions of the Deferred Loss Settlement Clause how does the insurer
proceed in the event of a loss to an insured farm outbuilding? - ANSWER The
Insurer will pay at the time of the loss an initial amount of no more than 50% of
the amount insured; the remaining 50% is payable, plus interest, if:
i. The building is repaired or replaced with a building designed for the same
purpose;
ii. Repair or replacement is completed within nine months of the date of the loss
or damage;
iii. The building is repaired or replaced within 200 feet of the building which was
destroyed.
Identify the coverages provided under a farm insurance policy. - ANSWER
Dwelling Building and Personal Property, Major Outbuildings and Contents,
Machinery and Equipment, General Liability
Identify the legal principle upon which the entitlement is based and how the
analysis is conducted: - ANSWER The Principle of Indemnity. The analysis is based
on lowest value after calculating: ACV, interest of the insured in the property, the
limit of insurance provided
Automobile insurance is compulsory in all provinces, which imposes a legal duty
on every person who operates a vehicle on public roadways to purchase the
minimum coverages required by law.
How automobile insurance is distributed varies by province. Identify where in
Canada compulsory automobile insurance is provided by private insurers under a
Standard Policy Form No. 1 - Owner's Form. - ANSWER The Standard Policy Form
No. 1 - Owner's Form is issued by private insurers in Alberta, the Atlantic
Provinces, Yukon, and the Northwest Territories.
, The S.P.F. No. 1 - Owner's Form includes Uninsured Motorist Coverage under
either Accident Benefits or Section D. Indicate the amount of coverage provided
under the policy in the event of injury or death caused by an uninsured or
unidentified automobile. - ANSWER The amount of coverage is the compulsory
minimum limit for bodily injury applicable in the jurisdiction in which the accident
occurred, which is $200,000 except in Quebec and Nova Scotia.
Claims for bodily injury or death caused by an "unidentified automobile" are
subject to a number of conditions. State two of the conditions that apply to such a
claim - ANSWER i. It must be shown that the identity of either the owner or
driver cannot be ascertained.
ii. The accident must be reported to authorities within 24 hours.
iii. A statement must be filed, under oath, with the insurer within 30 days.
iv. The automobile in which the insured was an occupant at the time the accident
occurred must be available to the insurer for inspection.
Generally, a professional is considered to be someone who possesses specialized
skills and knowledge. It is important for brokers to be recognized as professionals
by the public and their peers. State the practices that would earn the broker the
status of a professional - ANSWER Brokers conducting themselves according to
high ethical standards; Continually keeping themselves abreast of the latest
developments in the insurance business; Always act in the interest of their clients.
A mistake that causes financial loss to either a client or an insurer can result in an
Errors and Omissions claim. It is important for brokers to control this exposure.
Indicate the measures aimed at preventing or controlling errors and omissions. -
ANSWER Those which serve to prevent losses from occurring; and those which
ANSWERS
What is Differential Advantage? - ANSWER Any FEATURE, SERVICE, or PRODUCT
that sets it apart from others and provides and an advantage.
Define Demographics and list 6 subtypes, explain each: - ANSWER Grouping
clients together based on personal information such as age, gender, life-cycle,
education, occupation, ethnicity.
What are the three basic principles for selecting target market segments? -
ANSWER 1) The brokerage must exercise care target segments are compatible
with the GOALS AND IMAGE of the brokerage,
2) The brokerage must be able to match RESOURSES to the target markets
3) Consider potential of segment to generate sufficient business and income to
make the initiative worthwhile.
What are the four basic target market strategies that can be used to develop the
four Ps? - ANSWER 1) Undifferentiated - One marketing approach for entire
market.
2) Differentiated - Different marketing mix for each of the target markets
3) Niche Marketing - Only one target market and concentrate all efforts on that
market
4) Customized Marketing - A selective marketing mix for each client
,Under the provisions of the Deferred Loss Settlement Clause how does the insurer
proceed in the event of a loss to an insured farm outbuilding? - ANSWER The
Insurer will pay at the time of the loss an initial amount of no more than 50% of
the amount insured; the remaining 50% is payable, plus interest, if:
i. The building is repaired or replaced with a building designed for the same
purpose;
ii. Repair or replacement is completed within nine months of the date of the loss
or damage;
iii. The building is repaired or replaced within 200 feet of the building which was
destroyed.
Identify the coverages provided under a farm insurance policy. - ANSWER
Dwelling Building and Personal Property, Major Outbuildings and Contents,
Machinery and Equipment, General Liability
Identify the legal principle upon which the entitlement is based and how the
analysis is conducted: - ANSWER The Principle of Indemnity. The analysis is based
on lowest value after calculating: ACV, interest of the insured in the property, the
limit of insurance provided
Automobile insurance is compulsory in all provinces, which imposes a legal duty
on every person who operates a vehicle on public roadways to purchase the
minimum coverages required by law.
How automobile insurance is distributed varies by province. Identify where in
Canada compulsory automobile insurance is provided by private insurers under a
Standard Policy Form No. 1 - Owner's Form. - ANSWER The Standard Policy Form
No. 1 - Owner's Form is issued by private insurers in Alberta, the Atlantic
Provinces, Yukon, and the Northwest Territories.
, The S.P.F. No. 1 - Owner's Form includes Uninsured Motorist Coverage under
either Accident Benefits or Section D. Indicate the amount of coverage provided
under the policy in the event of injury or death caused by an uninsured or
unidentified automobile. - ANSWER The amount of coverage is the compulsory
minimum limit for bodily injury applicable in the jurisdiction in which the accident
occurred, which is $200,000 except in Quebec and Nova Scotia.
Claims for bodily injury or death caused by an "unidentified automobile" are
subject to a number of conditions. State two of the conditions that apply to such a
claim - ANSWER i. It must be shown that the identity of either the owner or
driver cannot be ascertained.
ii. The accident must be reported to authorities within 24 hours.
iii. A statement must be filed, under oath, with the insurer within 30 days.
iv. The automobile in which the insured was an occupant at the time the accident
occurred must be available to the insurer for inspection.
Generally, a professional is considered to be someone who possesses specialized
skills and knowledge. It is important for brokers to be recognized as professionals
by the public and their peers. State the practices that would earn the broker the
status of a professional - ANSWER Brokers conducting themselves according to
high ethical standards; Continually keeping themselves abreast of the latest
developments in the insurance business; Always act in the interest of their clients.
A mistake that causes financial loss to either a client or an insurer can result in an
Errors and Omissions claim. It is important for brokers to control this exposure.
Indicate the measures aimed at preventing or controlling errors and omissions. -
ANSWER Those which serve to prevent losses from occurring; and those which
