Registered Insurance Brokers of Ontario (RIBO) Practice Exam

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What does it mean for an insurance broker to be "restricted to act under supervision"?

They can operate independently
They may not control trust funds
They can act as a designated individual
They are permitted to sell all types of insurance

The correct answer is: They may not control trust funds

The phrase "restricted to act under supervision" for an insurance broker signifies limitations on their authority and responsibilities within the insurance practice. Being in this situation means that they cannot control trust funds, which are typically handled by more experienced or fully licensed brokers. This restriction is essential to ensure that customer funds are managed securely and appropriately by individuals with broader experience and oversight. Therefore, it emphasizes the liability protection and regulatory compliance that safeguard both the clients and the integrity of the insurance brokerage. The ability to operate independently is not applicable in this context, as those under supervision generally do not have full autonomy. Regarding the role of a designated individual, such an individual typically holds a recognized position of authority, which isn't the case for someone acting under supervision. Lastly, brokers with supervision may not have the qualifications to sell all types of insurance, limiting their scope of practice according to their training and experience.