RIBO Level 1 cheat sheet

RIBO is the delegated regulator for Ontario insurance brokers under the Insurance Brokers Act, 2002; it administers licensing, continuing education, and a complaints/disciplinary process separate from FSRA's insurer-side supervision.

A Level 1 broker licence must be sponsored by a RIBO-registered brokerage; the licence is held by the individual but is not valid for brokering activity unless the sponsoring brokerage relationship exists.

Entry to Level 1 requires completion of the RIBO licensing course and passing the RIBO Level 1 exam; the licence is then issued in the 'broker, other than life' class, which permits property, liability, and auto but not life insurance.

Level 1 holders work under supervision: they may transact general insurance business but must have their work reviewed by a Level 2 or Level 3 broker as set by brokerage supervision policy.

The RIBO continuing education requirement is 8 structured CE hours per licence year, of which a defined portion must relate to ethics and/or the regulatory framework; hours must be recorded and retained for audit.

Licence renewal is annual and tied to the broker's registration period; a lapsed licence means no brokering, no commissions, and no representation of oneself as a licensed broker.

RIBO disciplinary powers include fines, suspension, revocation, and conditions on licence; the Insurance Act also creates offences for unlicensed brokering, and contracts of insurance procured by unlicensed persons can be affected.

Errors and omissions coverage is mandatory for brokerages; the brokerage, not the individual broker, carries the RIBO-mandated E&O policy, which underpins the compensation fund and consumer protection framework.

Brokers must report changes in brokerage affiliation, name, and any criminal or disciplinary matters to RIBO within the prescribed timeframe; failure to report is itself a licensing issue.

Indemnity: the insured is restored to the pre-loss financial position, no better; valued policies and agreed-value clauses are exceptions where the sum insured is paid without further proof of loss value.

Insurable interest must exist at the time of loss for property and liability insurance (and at inception for life); without it, the contract is unenforceable and the claim fails.

Utmost good faith (uberrimae fidei) obliges both parties to disclose material facts; materiality is judged by whether the fact would influence a prudent underwriter's decision on premium or acceptance.

Actual cash value = replacement cost − depreciation; replacement cost = new-for-old with no depreciation deduction, usually subject to a policy condition that the property be repaired or replaced.

Co-insurance (property) is a contractual penalty clause: recovery = (insurance carried ÷ insurance required) × loss, capped at the policy limit; a coinsurance percentage of 80% means required insurance = 80% of value.

Average clause applies to underinsurance on a total-loss basis; a total loss with limit below required insurance pays only the proportion carried, not the full limit.

Deductibles are subtracted from the loss before applying coinsurance or limits in most property wordings; the order of operations is set by the policy and must be checked per form.

Subrogation transfers the insured's right of recovery against a negligent third party to the insurer after payment; the insured must not prejudice that right (e.g., by releasing the third party).

Contribution among insurers applies when multiple policies cover the same loss at the same level; each pays its rateable proportion, and the insured cannot recover more than the loss.

Ontario auto is a mandatory statutory scheme: every owner must carry Third Party Liability (minimum $200,000, commonly sold at $1M–$2M), Statutory Accident Benefits, Uninsured Automobile, and Direct Compensation–Property Damage (DCPD).

DCPD means the insured's own insurer pays for damage to the insured vehicle caused by another identified at-fault driver, with no fault determination dispute and no deductible if the insured is 0% at fault.

Fault is determined under the Fault Determination Rules (O. Reg. 668/93), which use scenarios (rear-end, left turn, parking lot, intersection) rather than civil negligence; fault percentages drive DCPD deductibles and rating.

Statutory Accident Benefits cover medical/rehabilitation, attendant care, income replacement, non-earner, caregiver, death, and funeral benefits; the standard policy has limits, and optional enhancements (e.g., increased medical limits, housekeeping) can be purchased.

Income replacement benefit is generally 70% of gross weekly income up to the policy maximum, subject to a waiting period and a 7-day/14-day election; the benefit is reduced by collateral sources such as WSIB or employer sick pay.

Optional coverages include increased liability limits, collision/comprehensive (physical damage), all perils, and OPCF endorsements such as OPCF 44R (family protection) and OPCF 27 (driver's licence exclusion).

OPCF 44R Family Protection covers the shortfall when an at-fault motorist is underinsured or uninsured, and it applies to the insured, spouse, and dependent family members; it is an optional endorsement.

The Facility Association is the residual market for drivers who cannot obtain coverage in the voluntary market; it provides the same statutory coverages but at higher rates.

A vehicle must be insured to be plated and driven; the pink liability card (or electronic proof) is required, and misrepresentation on the application (e.g., undisclosed principal driver) can void coverage or trigger a material misrepresentation denial.

Named perils vs. all risks (special form): named perils covers only listed perils (fire, lightning, explosion, smoke, windstorm, hail, riot, vandalism, water damage); all risks covers everything except exclusions, shifting the burden of proof to the insurer.

Standard exclusions include wear and tear, deterioration, mechanical breakdown, inherent vice, insects/vermin, settling, and faulty workmanship; these are maintenance-related and not fortuitous losses.

Replacement cost vs. actual cash value: RC pays new-for-old subject to repair/replacement conditions; ACV deducts depreciation, and the insured may choose RC at higher premium where the form permits.

Coinsurance clause: if insurance carried is below the required percentage of value (commonly 80% or 90%), the claim is reduced proportionally; the formula is (carried ÷ required) × loss, not to exceed the limit.

Deductibles are typically applied per occurrence, not per item; some forms apply a separate wind/hail or water damage deductible, and the largest applicable deductible governs.

Vacancy and unoccupancy conditions reduce or suspend coverage after a specified period (often 30 days) because unoccupied buildings present increased moral and physical hazard.

Mortgage clause: the lender's interest is protected; the insurer must notify the mortgagee of cancellation and pay the mortgagee to the extent of its interest, and the mortgagee can pay premium to keep coverage in force.

Water damage exclusions distinguish sudden and accidental discharge from repeated seepage or leakage over time; overland water and sewer backup are usually excluded unless endorsed.

Business interruption / extra expense covers loss of earnings and continuing expenses during restoration; it requires a period of indemnity and proof of lost income, not just physical damage.

Third party liability covers bodily injury and property damage to others, plus defence costs; defence costs are usually in addition to the limit for commercial general liability but inside the limit for some auto and professional forms.

Occurrence vs. claims-made: occurrence forms respond to injury/damage that happens during the policy period regardless of when claimed; claims-made forms respond when the claim is made and reported, with a retroactive date.

CGL coverage triggers on bodily injury or property damage caused by an occurrence; it excludes the insured's own property, contractual liability assumed without an insuring agreement, and pollution unless endorsed.

Products-completed operations coverage extends CGL to injury or damage arising from the insured's product or completed work away from the premises, usually with a separate aggregate.

Personal and advertising injury covers libel, slander, false arrest, and infringement of advertising ideas; it is distinct from bodily injury/property damage and has its own limit.

Professional liability (E&O) is claims-made and covers negligent acts, errors, or omissions in rendering professional services; prior acts coverage depends on the retroactive date.

D&O liability protects directors and officers for wrongful acts in their capacity, and the entity may be covered for securities claims; conduct exclusions (fraud, personal profit) require a final adjudication.

Aggregate limits cap total payments in a policy period; a per-occurrence limit caps each loss, and the aggregate is reduced by paid claims, so the remaining limit must be tracked.

Additional insured status extends coverage to parties such as landlords or clients, often via endorsement; the scope can be limited to liability arising out of the named insured's operations.

Fiduciary duty: a broker must place the client's interest ahead of the broker's or insurer's, disclose conflicts, and not accept undisclosed compensation that could bias a recommendation.

Disclosure of remuneration: the broker must tell the client how the broker is paid (commission, fee, or both) and disclose any contingent or profit-sharing arrangement on request.

Confidentiality: client information may be collected, used, and disclosed only as permitted by PIPEDA and the client's consent; it must not be shared for marketing without consent.

Suitability and needs analysis: the broker must assess the client's exposure, recommend coverage that meets the identified needs, and document the recommendation and any client refusal in the file.

Errors and omissions prevention: document advice, declined coverages, and client instructions contemporaneously; the file is the evidence in a later claim or complaint.

Misrepresentation and twisting are prohibited: a broker must not make false or misleading statements about a policy, induce replacement of coverage without disclosure, or conceal policy limitations.

Handling of client money: premiums and refunds must be held in trust and accounted for; commingling with brokerage operating funds is a serious breach.

Complaints and discipline: RIBO investigates conduct complaints; sanctions range from caution and conditions to fines, suspension, and revocation, and the broker must cooperate with the investigation.

Continuing competence: brokers must keep current on policy wordings and regulatory changes, complete required CE, and decline work outside their competence rather than improvise.