C81 Part 1: Study 4

Question 1

Indemnitary

Answer 1

1) Agent/broker negoiating insurance or reinsurance contracts for another
2) Any party representing another party, in negotiation with a third party

Question 2

Independent Brokerage System

Answer 2

A system in which independent insutsncr proffesionald, lisenced as insursnced brokers are contracted to sell insjrsnce on behalf of an insurer/multiple insurer

Question 3

Independent agency system

Answer 3

A system of marketing insursncr through independent contractors (agents) who sell insursncr on a commision or fee basis with 1 or more insurers

Question 4

Exclusive agency system

Answer 4

A system of marketing inshrsncr through lisenced agents who represent only one company or a group of companies under similar managment

Question 5

Direct Writer

Answer 5

Insursnce company selling directly to the public & not through independent agents or brokers

Question 6

General Agent

Answer 6

One who is appointed by a company in a specific territory. he/she is usually given an exclusivr territory $ may appoint sub agents in that territory

Question 7

Law of Agency

Answer 7

Applied when an agent is authorized to do something on behalf of a principal. The principal is the person/ entity for whom the agent of broker scts

Question 8

Express Contract

Answer 8

One in which the terms of the areangment have been specifically stated and agreed to by bith parties either orally or in writing

Question 9

Implied Contract

Answer 9

One in which the parties have acted in such a way that it is understood that a principal agent relationship exists, even though no expressed ststrment may have been made either

Question 10

Binding Authority

Answer 10

The capcity if confirm to people who have submitted their insurance applications thst they have insursnce coverage, it gives agents or brokers the power to make decisions that enter insurers into contracts of insurance

Question 11

Interim Recipt

Answer 11

A temporary measure to insure in an agreed manner while waiting for the completed policy to be issues also known aw a binder

Question 12

Binder

Answer 12

A written/oral agreement given by an insurer to insure a risk, pending the issuance of a formal policy. A binder is deemed to be the policy and must be csncelled in the same manner

Question 13

Cover Note

Answer 13

A document eitj insursnce or the insurance protection provided

Question 14

Rapport

Answer 14

Confirms a common bond in a relationship between people that often leads to agreemenr and harmony , occuring naturally as people spend time together and share common experienced or growing out if shared interests, heritage, background or common behaviours

Question 15

Risk managment

Answer 15

Analyzing a rjdk to wuantify the potential losses in a specific investment and to devide what is the appropriate action to take (to take action or not)