Insurance Institute RIBO-Level-1 Exam - Topic 5 Question 1 Discussion

The correct answer is D. RIBO's Code of Conduct requires a broker to be competent to perform the services undertaken for the client and to provide guidance based on sufficient knowledge of the specific risks involved so that recommendations are suitable for the client's needs. It also says a broker should not undertake to arrange insurance without honestly believing they are competent to handle it without causing the client unnecessary delay, risk, or expense.

Because this risk is no longer a standard personal-home exposure and is instead an 8-unit commercial/apartment conversion risk, the personal-lines broker should not try to place it on the current home policy. That makes A clearly wrong. C is also not the best answer because simply sending the client away is not the strongest service response if the brokerage has access to appropriate expertise. The proper step is to gather the necessary information and move the file to qualified commercial lines expertise for review, which is exactly what D describes. RIBO technical standards also expect brokers to determine appropriate products and coverages and assess quotations obtained for the client's needs.

B could be appropriate if no internal expertise exists, but where commercial lines support is available, D is the best answer because it protects the client while ensuring the matter is handled by someone competent.