Level 3 – Management Exam

To write this exam, you must have an active RIBO Level 1 or 2 license and a minimum of two years’ consecutive work experience as a RIBO licensed broker.

Please refer to the RIBO Exam Rules for more details.

Helpful Resource

• Read RIBO’s Consolidated Examinee Resource (No OAP1) for By-Laws No. 1, No. 2, No. 3, RIB Act, Ontario Regulation 308/98, 990 and 991 in one convenient document.

Successful completion of both the “Level 3 Management” examination and the “Level 2 Technical” examination qualifies an individual to the “Level 3” License and therefore eligible to act as the Principal Broker of a broker business. However, individuals who hold a “Level 3” License will still be under the direction of the Principal Broker of the firm they are employed by.

To apply to write the “Level 3” examination, an individual must hold a RIBO registration restricted to “Level 1” or “Level 2” and have been actively employed for at least two years with a RIBO registered firm.

Successful completion of only the “Level 3” examination will not remove the restriction of “Level 1.” Anyone planning to write the examination should carefully review the Standards for Management Skills. 

Upon completion of the RIBO exam, results will be provided to you by your exam service provider once they are available. Please do not contact RIBO for your exam results.

You can register for a RIBO exam with the following exam providers:

• Insurance Institute of Ontario
• Insurance Brokers Association of Ontario

Candidates are eligible to write the exam twice per exam provider. After two failed attempts they are subject to an 8-month waiting period following their second failed attempt with the same service provider. If a candidate takes the exam during this 8-month period, the waiting period will reset from their most recent attempt, the results will be nullified, and additional restrictors might apply.

Please carefully read the Exam Standards.

Question

Three budgets a broker should develop are Income or Sales Budget, Expense Budget, and Cash Budget. Briefly describe each one and its purpose. (9 marks)

Analyze the Question

• There are three budget types listed.
• A brief description of each budget type and its purpose is required.
• Since the mark value is nine, each budget type is worth three marks.

An Appropriate Answer

Income or Sales Budget

• Details anticipated income receivable from all sources for the planning period (usually one year) with monthly breakdown. It tells the broker what his/her income is likely to be.

Expense Budget

• Details the anticipated expenses during planning period. It tells the broker what his/her expenses are likely to be so that he/she can compare them to income to ensure a positive result.

Cash Budget

• Details anticipated cash available at each month end to cover expenses. If expenses in a particular month will exceed income, then additional monies will have to be found to cover the shortfall. This budget is the leading indicator to the broker that he/she could be in a negative position later in the year unless remedial action is taken.

The following are recommended as exam preparation or self-study materials:

• Practical Issues in Broker Management (C132)
• CAIB IV

Additional self-study materials and broker resources are available on our website:

• RIBO By-Laws No. 1, No. 2, No. 3, RIB Act, Ontario Regulation 989, 990, 991
• Guidelines to Assist in Completing FORM 1 / Form 1 Position Report
• Guidelines on Marketing Practices