Alberta Level 2 General Insurance Licensing

Exam Preparation Course

Practice Examination

Answer Key for Practice Examination Questions

Answers to Chapter Questions

* Prerequisite – Alberta Level 1 General Insurance License*

Prepare to upgrade your Alberta insurance licence with ILScorp’s Level 2 Licensing Exam Prep Course. This comprehensive program is designed to help brokers and agents develop the advanced knowledge required to pass the Alberta Insurance Council (AIC) Level 2 General Insurance Exam.

The course provides in-depth instruction in property, liability, automobile, and commercial insurance, as well as advanced risk management, contract law, claims handling, and professional ethics. Each module features interactive lessons, review questions, and a full-length practice exam modeled after the official AIC format.

Learning Outcomes:

Upon completion, learners will be able to:

  • Demonstrate a thorough understanding of Alberta insurance regulations and practices.
  • Apply key principles of underwriting, risk management, and loss prevention.
  • Accurately interpret policy forms, endorsements, and coverage scenarios.
  • Uphold ethical standards and best practices as a Level 2 licensed professional.

Key Features:

  • Comprehensive coverage aligned with the AIC Curriculum Design Document – General Level 2
  • Self-paced, flexible online learning
  • Interactive quizzes and exam simulations

Take the next step in your career! Gain the confidence, knowledge, and preparation you need to pass your Alberta Level 2 Licensing Exam with ILScorp.

Get Instant Access | $449.00 (Fast, easy, done)

ALBERTA GENERAL LEVEL 2 EXAM PREPARATION OUTLINE

CHAPTER 1: General Insurance Industry Knowledge
  1. What Is Insurance?
  2. The Role of Insurance and Its Benefits to Society
  3. Market Trends

    • Soft and Hard Markets
    • Impact on Availability and Profitability
    • New and Emerging Products
  4. The Role of Insurers

    • Financial Stability
    • Indemnification of Insureds
    • Obligations to Brokers and Agents
    • Premium Payment

      • Agency Bill
      • Direct Bill
      • Premium Financing Plans
  5. The Role of Underwriting

    • Underwriting Defined
    • Risk Selection
  6. The Role of Loss/Claims Adjusters

    • Definition of a Claims Adjuster
    • Types of Adjusters
    • Loss Investigation
    • Loss Evaluation
    • Loss Negotiation
    • Loss Settlement
  7. Reinsurance

    • What Is Reinsurance and Why Is It Used?
    • Types of Reinsurance
    • How Does Reinsurance Work?
    • Reasons for Reinsurance
  8. General Insurance Industry Associations

    • Insurance Bureau of Canada (IBC)
    • Insurance Brokers Association of Canada (IBAC)
    • Canadian Insurance Claims Managers Association (CICMA)
    • Canadian Independent Adjusters Association (CIAA)
    • Insurance Institute of Canada (IIC)
    • Underwriters Laboratories of Canada (ULC)
CHAPTER 2: The Role of an Insurance Broker or Agent
  1. What Are Insurance Brokers and Agents?
  2. Duties to Insurers—Agency Agreement
    • Binding Authority
    • Fiduciary Duty to Insurer
    • Knowledge of Limitations
    • Full Disclosure and Utmost Good Faith
  3. Duties to Consumers
    • Product Options and Recommendations
    • Insurance Policy Maintenance and Management
    • Financial Handling
    • Claims Process Management
      • Claims Advocate
      • Dispute Resolution Alternatives
  4. Professionalism and Ethics
    • Continuing Education and Professional Designations
    • Fairness to Customers Guidelines
    • Code of Ethics
  5. Errors and Omissions Insurance
    • Regulatory Requirements
    • Causes of Errors and Omissions Claims
    • Errors and Omissions Risk Control Measures
    • Management of Errors and Omissions Claims
CHAPTER 3: Risk Management
  1. What Is Risk?

    • Pure Risk
    • Speculative Risk
  2. The Risk Management Process
  3. Step 1: Identification of Loss Exposures

    • Loss Exposure Categories
    • Tools for Exposure Identification
  4. Step 2: Evaluation/Analysis of Identified Risks

    • Frequency of Loss
    • Severity of Loss
    • Loss Mitigation
  5. Step 3: Consideration of Alternatives/Options for Controlling Risk

    • Loss Control Strategies
    • Loss Financing Strategies
  6. Step 4: Formulation of the Risk Management Plan

    • Large Loss and Small Loss Principles
  7. Step 5: Implementation of the Risk Management Plan

    • Technical and Managerial Decisions
    • Emergency Response Planning
  8. Step 6: Monitoring and Modification of the Risk Management Plan

    • Annual Review of Program
    • New and/or Additional Exposures
    • Claims Experience Monitoring
CHAPTER 4: Regulation of the General Insurance Industry
  1. The Insurance Act

    • Insurance Agents and Adjusters Regulation
    • Certificate Expiry, Penalties and Fees Regulation
    • Classes of Insurance Regulation
    • Insurance Councils Regulation
  2. Roles and Responsibilities of Regulatory Bodies

    • Office of the Superintendent of Financial Institutions (OSFI)
    • Alberta Superintendent of Insurance
    • Alberta Insurance Council

      • Consumer Protection
      • Professional Conduct
      • Licensing Qualification Standards
      • Continuing Education Requirements
  3. Privacy and Privacy Legislation

    • What Constitutes Private Information?
    • Risk Control Practices to Ensure Confidentiality
    • Personal Information Protection and Electronic Documents Act (PIPEDA)
    • Personal Information Protection Act (PIPA)
CHAPTER 5: Contract Law and Insurance
  1. Canadian Legal System

    • Common Law and the Civil Code of Quebec
    • Statute Law
    • Criminal Law and Civil Law
  2. Introduction to Contract Law
  3. Elements Required in All Contracts
  4. Additional Elements Required in Insurance Contracts.
  5. Discharge or Conclusion of a Contractual Relationship
CHAPTER 6: Personal Automobile Insurance
  1. Private and Government Automobile Insurance Plans in Canada

    • Compulsory Insurance in Alberta
  2. Fundamental Principles and Legal Concepts Related to Automobile Insurance

    • Absolute Liability
    • Negligence
    • Onus of Proof
    • Subrogation
    • Direct Compensation Property Damage (DCPD) Agreement
  3. Standard Application Form for Owners of Automobiles (SAF 1)

    • Required Questions Mandated by Government
    • Additional Questions Required for Underwriting Purposes
  4. Components of Alberta’s Standard Policy Form for Owners of Automobiles (SPF 1)

    • Insuring Agreements
    • Coverage Sections
    • General Provisions, Definitions, and Exclusions
    • Statutory Conditions
  5. SPF 1 Section A—Third Party Liability

    • Coverage
    • Exclusions
    • Additional Agreements of Insurer
    • Agreements of Insured
  6. SPF 1 Section A1—Direct Compensation for Property Damage (DCPD)
  7. SPF 1 Section B—Accident Benefits

    • Subsection 1: Medical Payments
    • Subsection 2: Part I—Death, Grief Counselling, and Funeral Benefits
    • Subsection 2: Part II—Total Disability
    • Subsection 2(A): Supplemented Benefits Respecting Accidents Occurring Outside Alberta in a No-Fault Jurisdiction
    • Subsection 3: Uninsured Motorist Cover
    • Special Provisions, Definitions, and Exclusions of Section B
  8. SPF 1 Section C—Loss of or Damage to Insured Automobile

    • Coverage Subsections

      • Subsection 4—Specified Perils
      • Subsection 3—Comprehensive
      • Subsection 2—Collision or Upset
      • Subsection 1—All Perils
    • Deductible Clause
    • Exclusions
    • Additional Agreements of Insurer
  9. SPF 1 Policy General Provisions, Definitions, and Exclusions
  10. Statutory Conditions
  11. Standard Endorsement Forms Used with an SPF 1

    • Common Endorsements
    • Other Miscellaneous Endorsements
  12. Residual Risks and Industry Agreements

    • Grid Rating
    • All-Comers Rule
    • Facility Association
    • Risk Sharing Pool
CHAPTER 7: Commercial Automobile Insurance
  1. Commercial Automobile Defined
  2. Commercial Forms
  3. SPF 1—Owners Form and Fleet Insurance

    • Underwriting a Fleet Policy
    • Common Endorsements
  4. SPF 4—Garage Automobile Policy

    • Section A—Third Party Liability
    • Section B—Accident Benefits
    • Section C—Loss of or Damage to Owned Automobiles

      • Exclusions
    • Section E—Legal Liability for Damage to a Customer’s Automobile While in the Care, Custody, or Control of the Insured
    • Section F—General Provisions, Definitions, and Exclusions
    • Section G—Statutory Conditions
    • Common Endorsements
  5. SPF 6—Non-owned Automobile Policy

    • Why Is It Needed?
    • Third Party Liability Coverage and Exclusions
    • General Provisions and Definitions
  6. SPF 9—Transportation Network Policy

    • Why Is It Needed?
    • Coverage Provided

      • Section A—Third Party Liability
      • Section B—Accident Benefits
      • Section C—Loss of or Damage to Insured Automobile
    • General Provisions, Definitions, and Exclusions
CHAPTER 8: Property Insurance—Fundamental Principles
  1. What Is Property Insurance?

    • Differences between Personal and Commercial Risks
  2. Need for Property Insurance

    • Regulatory Requirements
    • First-Party Protection
    • Additional Interests
  3. Parts of a Property Insurance Policy
  4. Property Policy Conditions

    • Statutory Conditions
    • Additional Conditions
  5. Common Property Perils and Hazards
  6. Basis of Claim Payment

    • Actual Cash Value (ACV)
    • Replacement Cost Value (RCV) and Guaranteed Replacement Cost Value (GRV)
    • Valued Insurance Policies
  7. Property Insurance Concepts

    • Overlapping Coverage
    • Proximate Cause of Loss
    • Deductibles
    • Coinsurance Clauses

      • Standard Coinsurance
      • Stated Amount Coinsurance
    • Automatic Reinstatement
  8. Miscellaneous Property Insurance Terms

    • Vacancy/Unoccupied
    • Property Protection Systems
CHAPTER 9: Personal Property—Homeowner Insurance
  1. The Need for Homeowner Insurance
  2. Available Policy Forms and Their Differences
  3. Homeowner Policy Coverage Sections and Limits of Insurance

    • Coverage A—Dwelling Building

      • Optional Extensions
    • Coverage B—Detached Private Structures
    • Coverage C—Personal Property

      • Exclusions
      • Special Limits of Insurance
    • Coverage D—Additional Living Expenses

      • Additional Living Expenses
      • Fair Rental Value
      • Prohibited Access and Mass Evacuation
  4. Policy Exclusions

    • Exclusions Common to All Three Homeowner Forms
    • Additional Exclusions Applicable to the Broad and Comprehensive Homeowner Forms
  5. Policy Extensions of Coverage
  6. Terms and Definitions
  7. Common Endorsements and Floaters—Personal Lines Policies
CHAPTER 10: Personal Property—Tenants Insurance
  1. The Need for Tenants Insurance
  2. The Risks and Underwriting Concerns for Rented Dwellings
  3. Available Policy Forms and Their Differences
  4. Tenants Insurance Coverage Sections
    • Coverage C—Personal Property
    • Coverage D—Additional Living Expenses
    • Exclusions
    • Extensions of Coverage
CHAPTER 11: Condominium Insurance
  1. The Difference Between Bare Land and Standard Condominiums
  2. The Condominium Corporation

    • Responsibilities
    • Commercial Condominium Policy Coverages
  3. Individual Condominium Unit Owners

    • Responsibilities
    • Condominium Unit Owners Form Coverage Sections

      • U1—Unit Improvements and Betterments
      • U2—Loss Assessment
      • U3—Unit Additional Protection
  4. Concepts Related to Condominium Insurance

    • Overlapping Coverages
    • Subrogation
CHAPTER 12: Personal Property — Other Habitational Forms
  1. Mobile Homeowner Form

    • Differences from a Homeowner Policy

      • Coverage and Rating Factors
    • Coverages

      • Section A—Dwelling Building
      • Section C—Personal Property
    • Basis of Claim Payment
    • Emergency Removal Expense
    • Exclusions
  2. Seasonal Dwellings and Secondary Residences

    • Difference between a Seasonal Dwelling and a Secondary Residence
    • Coverages

      • Perils Insured
      • Exclusions
CHAPTER 13: Farm Insurance
  1. What Is Farm Insurance and Why Is It Needed?
  2. Coverages

    • Machinery and Equipment
    • Livestock
    • Farm Produce
    • Business Interruption
    • Difference between a Scheduled Policy and a Blanket Policy
  3. Common Clauses

    • Deferred Payment or Rebuilding Clause
    • Livestock Mortality
    • Ingestion Protection
    • Average Distribution
    • Pollution
CHAPTER 14: Commercial Property Insurance
  1. Types of Insureds
  2. Commercial Policy Form

    • Manuscript and Subscription Policies
    • Parts of a Policy
  3. Building, Equipment, and Stock Insurance Forms

    • Policy Clauses
    • Broad Form

      • Optional Extensions of Coverage
    • Named Perils Form
    • Limits of Insurance
    • Building Coverage
    • Equipment Coverage

      • Tenants Improvements and Betterments
    • Stock Coverage

      • Premium Adjustment Clause
      • Peak Season
    • Extensions of Coverage
    • Property Excluded
    • Perils Excluded
  4. Common Commercial Property Endorsements

    • Bylaw
    • Replacement Cost
    • Glass Rider
    • Exhibition Floater
    • Valuable Papers and Records
    • Accounts Receivable
    • Inflation Protection
CHAPTER 15: Other Commercial Property Insurance Forms
  1. Boiler and Machinery and/or Equipment Breakdown

    • Coverages Needed
    • Typical Exclusions
    • Per Accident Limit
    • Overlapping Coverages
  2. Contractors Insurance

    • Equipment
    • Tools
    • Installation
  3. Motor Truck Cargo
  4. Bailees Insurance
  5. Marine Insurance

    • Why Is It Needed?
    • What Is Covered?
    • Common Exclusions
  6. Surety

    • What Is It?
    • Why Is It Needed?
    • Types of Bonds

      • Bid
      • Performance
      • Labour and Materials Payment
      • Fiduciary
      • Licence and Permit
      • Customs or Excise
CHAPTER 16: Business Interruption Insurance
  1. What Is Business Interruption Insurance and Why Is It Needed?
  2. Business Interruption Coverage Forms

    • Profits
    • Gross Earnings
    • Comparison of the Profits and Gross Earnings Forms
    • Business Income and Extended Business Income Forms
  3. Extra Expense Insurance Coverage
  4. Contingent Business Interruption

    • Recipient Form
    • Contributory Form
    • Anchor Form
  5. Common Clauses and Endorsements

    • Bylaw Endorsement
    • Professional Fees
    • Auditors Fees
    • Rent or Rental Value Endorsement
  6. Business Interruption Coverage Provided by a Business Package Policy
CHAPTER 17: Crime Insurance
  1. What Is Crime Insurance?
  2. Why Is It Needed?
  3. Crime Insurance Perils Defined
  4. Coverages

    • Damage to Building by Burglary or Robbery
    • Inside/Outside Robbery
    • Stock Burglary
    • Safe Burglary
    • Money and Securities (Inside/Outside)
    • Lessees Safe Deposit Box Burglary and Robbery
    • Employee Dishonesty
    • Depositors Forgery
    • Money Order/Counterfeit Paper Currency
  5. Comprehensive Dishonesty, Disappearance, and Destruction Crime Insurance Policy
  6. Crime Coverage Provided by a Business Package Policy
CHAPTER 18: The Law and Liability Insurance
  1. Tort Law

    • Negligence
    • Contributory Negligence
    • Nuisance
  2. Actionable Torts, Legal Defences, and Damages

    • ABC Rule
    • Common Defences
    • Types of Damages
  3. Legal Liability Concepts

    • Joint and Several Liability
    • Strict Liability
    • Vicarious Liability
    • Onus of Proof
    • Subrogation
    • Prescription Periods
    • Occurrence-Based versus Claims-Made Policies
CHAPTER 19: Personal Liability Insurance
  1. What Is Liability Insurance and Why Is It Needed?
  2. Components of a Personal Liability Insurance Policy

    • Coverage Summary
    • Insuring Agreements
    • Definitions
    • Coverages
    • Exclusions
    • Conditions
    • Other Insurance
  3. Standard Coverages—Homeowner, Tenants, and Condominium Unit Owners Forms

    • Who Is Insured?
    • Coverage E—Personal Liability
    • Coverage F—Voluntary Medical Payments
    • Coverage G—Voluntary Payment for Damage to Property
    • Coverage H—Voluntary Compensation for Residence Employees
    • Coverage J—Loss Assessment
    • Special Limitations
  4. Exclusions

    • Policy Exclusions
    • Coverage E Personal Liability Exclusions
    • Coverage F Voluntary Medical Payments Exclusions
    • Coverage G Voluntary Compensation for Property Damage Exclusions
    • Coverage H Voluntary Compensation for Residence Employees Exclusions
  5. Definitions
  6. Conditions
  7. Personal Umbrella Policy
CHAPTER 20: Commercial Liability Insurance
  1. Commercial Liability Exposures

    • Premises Liability and Duty of Care Owed to Others
  2. Components of a Commercial General Liability (CGL) Policy

    • Five Sections
  3. CGL Policy Section I: Coverages

    • Coverage A—Bodily Injury and Property Damage
    • Coverage B—Personal and Advertising Injury
    • Coverage C—Medical Payments
    • Coverage D—Tenants Legal Liability
    • Common Exclusions: All Coverage Sections
    • Supplementary Payments: Coverages A, B, and D
  4. CGL Policy Section II: Who Is an Insured?
  5. CGL Policy Section III: Limits of Insurance
  6. CGL Policy Section IV: Conditions
  7. CGL Policy Section V: Definitions
  8. Other Liability Insurance Forms

    • Professional Liability, Malpractice, and Errors and Omissions
    • Directors and Officers
    • Environmental
    • Umbrella and Excess Coverage
    • Employer’s and Contingent Employer’s
    • Bailees
    • Wrap-Up
CHAPTER 21: Travel Insurance
  1. What Is Travel Insurance?
  2. The Need for Travel Insurance

    • Government Plans
    • Private Plans
  3. Medical Coverage

    • Coverages
    • Definitions
    • Conditions and Limitations
    • Exclusions
  4. Other Travel Insurance

    • Trip Cancellation or Interruption
    • Baggage and Personal Effects
    • Other Miscellaneous Coverages

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