CAIB 1 - Chapter 7 Exam With 100% Correct Answers 2023-2024, Exams of Advanced Education

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CAIB 1 - Chapter 7 Exam With 100%

Correct Answers 2023-

What are 3 actions which demonstrate a brokers unethical conduct? - Correct Answer- to sell more insurance than is needed, to sell higher priced coverages when equivalent coverage is available for a lower price, to recommend policies with a higher commission. What are 3 qualities of a professional? - Correct Answer-commitment to higher ethical standards, have a high standard of educational preparedness with mandatory continuous education, have a formal association regulating power over its members What responsibilities do brokers owe their clients? - Correct Answer-to provide coverage best suited to the client, to hold the affairs of clients in strict confidence, to be competent and diligent. What responsibilities do brokers owe insurers? - Correct Answer-to abide by the agency agreement, to adhere to binding authority, to deal honestly with money and to disclose all material facts What responsibilities do brokers owe fellow brokers? - Correct Answer-to use fair methods of solicitation, to encourage public respect and to not harm the reputation of a fellow broker State 3 common E&O causes - Correct Answer-inadequate coverage, misrepresentation and description errors, cancellation and renewal errors Provide 4 examples of inadequate coverages - Correct Answer-failure to provide proper coverage, failure to advise of restrictions/exclusions, failure to provide coverage, mistake in coverage Provide 3 examples of renewal errors - Correct Answer-not renewing at all, not renewing with adequate coverage, not warning of pending expiry State 3 instances where brokers would be held liable to the insurer for claims paid due to misrepresentation - Correct Answer-where the insurer would not have accepted the risk, where the insurer may not have accepted the risk, where the insurer would have accepted but with higher premium What are 5 things brokers can do to reduce E&O's? - Correct Answer-ensure all staff are acting within their scope of competence, take all steps to determine clients' needs, be advisers; not deciders, know coverages & insurers, stay within binding authority

What are 5 procedures to reduce E&O's while claim handling? - Correct Answer-report the claim immediately, inform client of their responsibilities, do not authorize repairs, if the loss is clearly not insured; advise them, follow up What is the key source of broker credibility in an E&O claim? - Correct Answer- documentation Provide 2 examples of record keeping that help defend E&O claims - Correct Answer- conversation & telephone logs, letters of confirmation What does E&O insurance cover? - Correct Answer-coverage is provided for claims that arise out of any negligent act, error or omission of the broker or its employees while acting as an insurance broker What is not covered on E&O policies? - Correct Answer-Dishonest, fraudulent or criminal acts Define "Step Licensing" - Correct Answer-a system that requires a higher degree of knowledge for each increasing step Define "Ethics" - Correct Answer-the principles of conduct governing an individual or group Define "Professionalism" - Correct Answer-a professional is one who possesses a special skill or knowledge Define "Self Regulation" - Correct Answer-The right of an industry to govern its own affairs