S6 #1
A: This regulation stipulates that all cars being driven on public roads are required to have insurance.
Q: What is
"The Insurance Act"?
A: This type of rating is used for complex classes of insurance, such as commercial risk or personal risk that require considerations.
A: What is
"Manual Rating"?
A: In rating, these are additional charges for features considered more hazardous.
Q: What are
"Loadings"?
Q: How many questions are there on an auto insurance application form, and how many of them are mandatory?
A: There are 27 Items on the application form:
- Items 1-13 are mandatory
- Items 14-27 are supplemental information
A: Incorrect or missing information about a material fact that is offered or not by an applicant or insured with or without the intent to mislead.
A: What is
"Misrepresentation"?
A: This is the only form approved for use in underwriting automobile insurance for the standard automobile policy (owner’s policy SPF 1).
Q: What is
The "SAF 1"? (Standard Application Form)
A: This contains the information needed to underwrite, rate and issue a policy.
Q: What is
An "Application Form"?
A: In certain provinces, UW is influenced by the mandate to provide insurance to “all persons” and so one of the usual functions of underwriting of declining risks, is illegal.
Q: What are
Government Automobile Insurers (SK, BC, MB)?
A: This involves scrutinizing a risk and then deciding on its eligibility for insurance.
Q: What is
"Underwriting"?
Q: Describe risk.
A: Risk is the chance of loss.
- It is the possible loss or destruction of property, or the possibility of a liability exposure.
- AKA: the subject of an insurance contract.
A: This is the sum of values insured under a policy - the total amount the insurer could become liable for under a policy.
Q: What is
"Exposure"?
Note: exposure is also the hazard threatening a risk.
A: Management establishes a marketing philosophy that will produce a profit, including creating underwriting and rate manuals, and systems of operation to attract and classify profitable business.
A: What is
"head office underwriting"?
Q: Why might a risk be rejected?
A: A risk could be rejected based on:
- the class of business (the insurance company may not insure that class of business),
- the hazard level (more hazardous than average whereby the potential for loss is almost certain) or
- if a substandard risk is presented (the potential for improving or upgrading it exists, but the applicant is not prepared to carry out suggested improvements).
- The risk could be well-managed but the claims frequency and severity for the last one or two years may have placed it in an unfavourable underwriting rating position.
Q: The decision to underwrite a policy is based on what factors?
A: The decision is ultimately based on the moral (personal info) + physical hazards and exposures + any other factors pertaining to the risk or type of insurance.
BONUS Q: What is the perfect name for an insurance salesman?
A: "Justin Case".