Registered Insurance Brokers of Ontario (RIBO) Practice Exam

The Facility Association is best described as?

1. An independent insurance company

2. A governmental body regulating insurance markets

3. A pooling arrangement of automobile insurers

4. A private entity selling insurance directly

The correct answer is: A pooling arrangement of automobile insurers

The Facility Association is accurately described as a pooling arrangement of automobile insurers. This organization exists to provide insurance coverage to individuals who may have difficulty obtaining it through traditional means, such as those deemed high-risk drivers. By pooling resources from multiple insurers, the Facility Association can spread the risk among its members, ensuring that coverage remains accessible and affordable for those who are otherwise underinsured. The other descriptions do not align with the nature of the Facility Association. It is not an independent insurance company, as it does not operate as a single entity selling policies; instead, it acts as a collective for automobile insurers. Additionally, it is not a governmental body regulating insurance markets, nor does it function as a private entity selling insurance directly to consumers. The primary purpose of the Facility Association is to provide a safety net in the automotive insurance market for applicants who might be considered uninsurable by standard lines of insurance.