Chapter 7 Flashcards

(25 cards)

1
Q

Insurance Distribution and insurance Intermediaries

A

Independent Agency
Brokerage System
Exclusive Agency System
Direct Writers

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2
Q

Insurance intermediaries

A

Anyone who is going to be negotiating insurance or reinsurance. Anyone who negotiates insurance for a third party. Paid on a commission basis.

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3
Q

Brokerage Systems

A

An independent business system where we have multiple brokers who sell insurance.

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4
Q

Exclusive agency system

A

A licensed agency that only sells for one company.

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5
Q

Direct Writers

A

When people work at the insurance company and sell the insurance.
Eg MPI SCR

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6
Q

Broker

A

An independent business person who may place insurance with several insurance companies.

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7
Q

Agent

A

Represents one company only

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8
Q

Mandate

A

A mandate is a contract t which the mandatory commits a lawful business to the management of another called the mandatory. Who by accepting the contract is obligated to perform the contract.

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9
Q

Principal Agent Relationship

A

The term used in common law provinces.
The relationship of the agent bringing in new business to the insurance company.

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10
Q

2 types of Contract authorities

A

Implied

Express

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11
Q

Express - more common

A

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

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12
Q

Implied (wink wink, nudge nudge)

A

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 statement may have been made by either.

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13
Q

Licensing and regulation
Must have!

A

Government regulations
Self regulation (RIBO)

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14
Q
A
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15
Q

RIBO

A

Register insurance brokers Ontario

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16
Q

Law of agency

A

Applies when an agent is authorized to do something on behalf of a principal. The principal is the person or entity for whom the agent or broker acts.

17
Q

Responsibility of the broker

A

Follow binding authority - instructions on the type of business may write. Could be up to a certain amount of money.

Collect the premiums and hold them in the trust.

Remit premiums within a certain time frame.

Advise of business written or submit applications promptly.

Advise insured promptly if all claims

18
Q

Role of Intermediaries

A

Identify the insurance needs of the client. - Ask questions, age, address, who’s driving, income.

Match those needs to product available

Finalize the contract.

19
Q

Broker needs to have communication skills.

A

Listen to what is being said
Interpreting how it is being said
Process non verbal skills
Question clients
Confirm the needs

20
Q

Selling

A

Referrals
Digital or online marketing
Advertising
Cold calling
Tracking expiry dates
Upselling and cross selling

21
Q

Regulations of Intermediaries

A

Qualifications
Licensing
Operating Requirements
Renewal of licence

22
Q

Premiums and the broker

A

Operating Account - their operating money goes into

Trust Account - money for the insurance company goes in there.

23
Q

Commission

A

The amount of money the insurance company will pay to bring in the client. $ or %

24
Q

Contingent commission

A

Commission that is based on how well the business is doing. “Book of business”
An incentive

25