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IIC Chartered Insurance Professional (CIP) C11

C11

Exam Code: C11

Exam Name: Principles and Practice of Insurance

Updated: Oct 12, 2026

Q & A: 103 Questions and Answers

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IIC C11 Exam Syllabus Topics:

SectionWeightObjectives
Topic 1: Legal Principles of Insurance20–25%- Principle of indemnity
- Contract law fundamentals
- Subrogation and contribution
- Insurable interest, utmost good faith
Topic 2: Introduction to Insurance10–15%- Role of insurance in economy and society
- Purpose and function of insurance
- Basic concepts: risk, peril, hazard
Topic 3: Insurance Policy Structure and Provisions20–25%- Interpretation of policy wording
- Policy components: declarations, insuring agreement, exclusions, conditions
- Endorsements and modifications
Topic 4: Risk Management and Application15–20%- Risk identification, assessment, treatment
- Ethics and professional conduct
- Application of principles to personal and commercial contexts
Topic 5: Insurance Industry Structure and Stakeholders15–20%- Legislation and regulation in Canada
- Roles: underwriting, claims, reinsurance
- Insurers, intermediaries, regulators

IIC Principles and Practice of Insurance Sample Questions:

Question #1
What is binding authority?

A. Agreement between an insurer and an insured regarding reinsurance
B. Equivalent to an insurers cover note
C. List of clients who the broker can contact for coverage
D. Permission to confirm coverage before submitting it to the insurer


Question #2
Which statement reflects how an insurer invests their capital?

A. Government regulations specify the types of investmentsnot permittedto insurers
B. There are no restrictions as to how an insurer can invest their capital
C. Provincial regulations allow insurers to invest in foreign bond markets
D. Insurers are compelled by regulations to invest in non-liquid assets


Question #3
What is the effect of perils and hazards on insurance rates for the underwriter?

A. The rate is calculated by multiplying the premium by the amount insured for each peril
B. An underwriter may use a higher rate if a hazard increases the likelihood of a loss by an insured peril
C. An underwriter may increase the rate if the insured event is likely to increase the hazard
D. The rate is determined by the law of large numbers for the hazards listed on the policy


Question #4
[Insurance Companies - Reinsurance (Non-Proportional / Excess of Loss)] Cover It Insurance has a non-proportional reinsurance agreement with ZYX-Reinsurance:
$600,000 excess of $300,000.
Which payout is accurate?

A. On a $100,000 loss, Cover It pays $33,333 and ZYX pays $66,667
B. On a $200,000 loss, Cover It pays $100,000 and ZYX pays $100,000
C. On a $600,000 loss, Cover It pays $300,000 and ZYX pays $300,000
D. On a $900,000 loss, Cover It pays $200,000 and ZYX pays $600,000


Question #5
Robin is employed as a loss adjuster handling a large residential fire claim. Which is NOT one of their responsibilities?

A. Explain relevant insurance coverage
B. Uphold the law with respect to its interpretation
C. Assess the claim with integrity
D. Provide legal advice even if the claimant has legal counsel


Solutions:

Question #1
Correct Answer: D
Question #2
Correct Answer: A
Question #3
Correct Answer: B
Question #4
Correct Answer: C
Question #5
Correct Answer: D

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