Registered Insurance Brokers of Ontario (RIBO) Practice Exam

Can a broker assign facility business to any insurer regarding risks insured by the Facility Association?

1. Yes, they can

2. No, it cannot be assigned

3. Only to specific insurers

4. It depends on the situation

The correct answer is: No, it cannot be assigned

The correct answer is that a broker cannot assign facility business to any insurer regarding risks insured by the Facility Association. This is because the Facility Association operates as a market of last resort, providing coverage to individuals who may have difficulty obtaining insurance through standard means. The risks that they insure are specifically allocated and handled within their framework, and they have established procedures for managing these risks. Having the ability to assign facility business to any insurer would undermine the specialized nature of the Facility Association and the protections it offers. Therefore, there are regulatory and contractual constraints placed on brokers in relation to how this business is managed, ensuring that it remains within the control of the Facility Association. Assigning these risks to just any insurer would not align with the principles that govern the facility market, which aims to maintain stability and consistency in providing coverage to high-risk individuals.