Registered Insurance Brokers of Ontario (RIBO) Practice Exam

When an insurer intentionally issues a policy that differs from the application, what must the insurer do?

1. Notify the insured verbally about the differences

2. Immediately cancel the policy

3. Provide a written notification of the policy discrepancies

4. Completely ignore the application

The correct answer is: Provide a written notification of the policy discrepancies

The correct response is indeed that the insurer must provide a written notification of the policy discrepancies. This requirement stems from the principles of transparency and fairness in insurance dealings. When there are differences between the application and the issued policy, it's essential for the insurer to formally communicate these discrepancies to the insured. This written notification serves to ensure that the individual is fully informed about the terms of the coverage provided, which is crucial for maintaining trust in the insurer-insured relationship. Written communication about discrepancies also allows the insured to review the differences and understand how they may affect their coverage. This process helps in avoiding potential disputes in the future regarding coverage expectations, as policyholders have a clear record of what was issued compared to what was applied for. Other responses do not fulfill the necessary obligations of the insurer in this scenario, as they either lack the formality of written communication or suggest actions that may not protect the insured's interests or rights effectively. Providing a clear, documented notice is fundamental to uphold the standards of the insurance industry and protect consumers.