RIMS Documentation & Legal Requirements 2 — Questions and Answers
Question 1: Under the Sarbanes-Oxley Act, which officer is primarily responsible for certifying the accuracy of financial risk disclosures?
- Chief Risk Officer
- Chief Executive Officer (Correct answer)
- Chief Compliance Officer
- General Counsel
Correct answer: Chief Executive Officer
SOX Section 302 requires the CEO (and CFO) to personally certify the accuracy of financial statements and internal controls disclosures.
Question 2: A risk manager discovers a contractual indemnification clause that shifts liability to a third party. Which document type is this most likely found in?
- Certificate of Insurance
- Hold Harmless Agreement (Correct answer)
- Loss Run Report
- Acord Form 25
Correct answer: Hold Harmless Agreement
A Hold Harmless Agreement (often embedded in contracts) shifts legal liability from one party to another through indemnification language.
Question 3: Which documentation requirement is specific to the National Flood Insurance Program (NFIP) when filing a flood claim?
- A sworn proof of loss within 60 days of loss (Correct answer)
- A sworn proof of loss within 6 months of loss
- An adjuster's report within 30 days
- A police report filed within 24 hours
Correct answer: A sworn proof of loss within 60 days of loss
NFIP policy terms require policyholders to submit a signed and sworn Proof of Loss within 60 days of the flood event.
Question 4: What is the primary legal purpose of a 'non-waiver agreement' signed after a loss event?
- It waives the insured's right to appeal a claim denial
- It allows the insurer to investigate without admitting coverage (Correct answer)
- It transfers subrogation rights to a third party
- It extends the reporting deadline for late-reported claims
Correct answer: It allows the insurer to investigate without admitting coverage
A non-waiver agreement allows an insurer to investigate and defend a claim while reserving the right to later deny coverage without waiving policy defenses.
Question 5: Under OSHA's recordkeeping rule (29 CFR 1904), how long must employers retain OSHA 300 Logs?
- 1 year
- 3 years
- 5 years (Correct answer)
- 10 years
Correct answer: 5 years
OSHA requires employers to retain the OSHA 300 Log, 300A Summary, and 301 Incident Reports for five years following the end of the calendar year they cover.
Question 6: Which clause in an insurance policy requires the insured to provide written notice of a claim 'as soon as practicable'?
- Subrogation clause
- Notice of loss clause (Correct answer)
- Cooperation clause
- Appraisal clause
Correct answer: Notice of loss clause
The notice of loss clause obligates the insured to promptly notify the insurer of any occurrence that may give rise to a claim.
Question 7: When a risk manager transfers a contractual risk through an 'additional insured' endorsement, what documentation must typically be obtained to confirm the coverage is in force?
- ACORD 25 Certificate of Liability Insurance (Correct answer)
- ACORD 140 Property Section
- ISO CG 00 01 Policy Declarations
- A signed indemnification letter
Correct answer: ACORD 25 Certificate of Liability Insurance
The ACORD 25 Certificate of Liability Insurance is the standard document used to evidence that a party has been added as an additional insured under a liability policy.
RIMS Documentation & Legal Requirements 2
Under the Sarbanes-Oxley Act, which officer is primarily responsible for certifying the accuracy of financial risk disclosures?