Ch4: Process of Placing Insurance

Question 1

Describe the role of “Agents”

Answer 1

Represents the insurer’s interest. Usually works for one insurance company.

Question 2

Describe the role of Agents/Brokers

Answer 2

The intermediary between insurers and clients.

Question 3

Define “Errors and Omissions”

Answer 3

The insurance policy purchased by brokers to insure themselves against mistakes

Question 4

Define “Agent of the Insurer”

Answer 4

A broker who is binding authority

Question 5

Define the roll of Underwriters

Answer 5

Choose risk selection (choose risks more likely to profitable for the insurer)

Question 6

Define the 3 sources of information & their roles

Answer 6

a. Application: gives information on risks and hazards
b. Broker: Information on clients personal and business reputation.
c. Inspection Reports: Helps evaluate hazards on commercial risks

Question 7

Define “Hazard”

Answer 7

Condition that might cause a peril to occur

Question 8

What are the 4 Moral Hazards?

Answer 8

1. Moral character
2. Financial condition
3. Indifference to loss
4. Loss Experience Data

Question 9

What is ratemaking?

Answer 9

Different prices for different risks

Question 10

Describe the roll of a claims adjuster

Answer 10

Instigates loss, determines amounts and how they’re settled

Question 11

Describe the 3 steps in the claims process

Answer 11

1. Insured reports to broker
2. Broker reports to insurer
3. Insurer assigns company adjuster to deal with claim

Question 12

Describe the roll of an independent adjuster

Answer 12

for specialized or far off losses