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[General] C11 Reliable Test Preparation - C11 Real Dump

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【General】 C11 Reliable Test Preparation - C11 Real Dump

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IIC Principles and Practice of Insurance Sample Questions (Q19-Q24):NEW QUESTION # 19
Usually, what must an insurance intermediary do before using the personal information of a client for a purpose other than that for which the information was originally collected?
  • A. Obtain permission from the client to do so
  • B. Obtain permission from the federal privacy officer to continue
  • C. Write to the client advising of the alternate usage
  • D. Advise the insurer's ombudsperson of the intended usage
Answer: A
Explanation:
Under Canadian privacy legislation (such as PIPEDA), personal information may only be used for the specific purpose for which it was originally collected unless the client provides informed consent for additional use.
Insurance intermediaries must therefore obtain explicit permission from the client before using or disclosing their information for any new purpose, such as marketing, cross-selling, or sharing data with third-party providers.
Option B-simply notifying the client-is insufficient without consent. Option C is incorrect, as the ombudsperson deals with complaints, not privacy approvals. Option D is incorrect because privacy officers do not grant permissions; the law requires consent from the individual, not from government officials.
Since consent is central to privacy compliance in insurance operations, the intermediary must obtain permission from the client, making A the correct answer.

NEW QUESTION # 20
A person applies for fire insurance on their house but fails to mention that in winter they leave the house unoccupied for two months while vacationing. What is this an example of?
  • A. Negligence
  • B. Non-disclosure
  • C. Discharge of contract
  • D. Breach of warranty
Answer: B
Explanation:
Insurance contracts are built on the principle of utmost good faith, meaning applicants must disclose all material facts that could influence the insurer's decision to accept the risk or determine the premium. Failing to mention a material fact-such as the home being unoccupied for long periods-is considered non- disclosure. Unoccupancy increases the risk of vandalism, frozen pipes, fire severity, and delayed emergency response, all of which affect underwriting decisions.
Option A, negligence, refers to failure to act with reasonable care, not failure to disclose.
Option C, breach of warranty, applies only after a policy is in force and a condition guaranteed to be true is violated.
Option D, discharge of contract, refers to cancellation or completion of contractual obligations.
Since the issue arises during the application stage and involves withholding a material fact, the correct classification is non-disclosure.

NEW QUESTION # 21
Which type of clause grants additional protection to the entity that has a registered interest on real property?
  • A. Mortgage clause
  • B. Bailee clause
  • C. Lienholder clause
  • D. Additional interest clause
Answer: A
Explanation:
Comprehensive and Detailed Explanation (150-250 words):
Amortgage clauseis a specialized provision within property insurance policies that protects the financial interest of amortgagee-typically a bank or lending institution-when real property is used as collateral for a loan. Under thePrinciples and Practice of Insurance, this clause creates aseparate contract of insurancebetween the mortgagee and the insurer. This is critical because it ensures that the mortgagee's protection remains intact even if the insured violates policy conditions (such as failing to maintain the property or committing fraud).
This clause ensures that any loss settlement will first satisfy the mortgagee's insurable interest before any residual payment goes to the property owner. It also obligates the insurer to notify the mortgagee of policy cancellation or material changes, providing the lender an opportunity to take protective measures, such as force-placed insurance.
The mortgage clause is distinct from other clauses: abailee clauserelates to property held by others for repair or cleaning, alienholder clauseis used for movable property like automobiles, and anadditional interest clauseoffers limited notice but not the full contractual protection afforded to a mortgagee. Thus, the correct and most protective clause for real property isB. Mortgage clause.

NEW QUESTION # 22
A commercial brokerage failed to advise the insurer of a client's modified risk. The insurer discovered this only at the time of a major loss and denied the claim due to material change. How will the client MOST LIKELY proceed?
  • A. Pay for the loss, and cancel the policy backdated to before the loss
  • B. Pay for the loss, and oblige the brokerage to reimburse the deductible
  • C. Take legal action against the brokerage, stating it had a contractual responsibility to disclose the material change
  • D. Take legal action against the insurer, stating the insurer knew the full risk
Answer: C
Explanation:
Brokers act as agents of the insured, meaning they owe a professional duty to advise the insurer of any material change in risk. A material change is any alteration that significantly affects the underwriting assessment of the policy. If a broker fails to report such a change, the insurer is legally entitled to void coverage or deny a claim because it was not given full information to properly rate or accept the risk.
When a claim is denied due to the broker's failure-not the insured's intentional nondisclosure-the insured will typically seek compensation by suing the brokerage for negligence. The brokerage has a legal duty of care to ensure proper communication with insurers on behalf of the client.
Options A and B make no sense because the insurer will not voluntarily pay after a justified denial. Option C is unlikely, because the insurer can demonstrate that it never received notification of the change. The correct and realistic recourse is legal action against the brokerage, making D correct.

NEW QUESTION # 23
Why does the need for liability insurance arise?
  • A. Reduce personal risk to oneself
  • B. Meet societal obligations and norms
  • C. Fulfill legal obligations to others
  • D. Uphold ethical feelings of responsibility
Answer: C
Explanation:
Liability insurance arises because individuals and businesses have legal obligations not to cause bodily injury or property damage to others. When someone is negligent, the law allows the injured party to seek compensation. These legal obligations can be substantial and financially devastating. Liability insurance provides protection by transferring the financial burden of compensating others to an insurer. It ensures that the insured can meet their legal responsibilities and that injured third parties receive compensation.
Option A is incorrect because liability insurance is not for protecting oneself from personal risk-it protects against obligations to others. Option C refers to social norms, which may influence behavior but do not impose enforceable financial duties. Option D refers to ethics, but ethical feelings alone do not create legal liability.
The key reason liability insurance exists is the legal requirement to compensate others when negligent, making B the correct answer.

NEW QUESTION # 24
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