Lloyd's of London - ️️The world's leading insurance market that provides services
and physical facilities for its members to write specialized lines of insurance. They
underwrite insurance for syndicates.
group insurance marketing - ️️Products are sold through group representatives
empl...
RMIN 4000 Edmunds Exam 2
Lloyd's of London - ✔️✔️The world's leading insurance market that provides services
and physical facilities for its members to write specialized lines of insurance. They
underwrite insurance for syndicates.
group insurance marketing - ✔️✔️Products are sold through group representatives
employees who receive a salary and incentive payments based on sales (can pay for
insurance by payroll deduction)
importance of large brokerage firms - ✔️✔️very important for commercial P&C, have
knowledge of specialized markets, and provide risk management and loss-control
services
major types of private insurers - ✔️✔️Stock, Mutual, and Lloyd's of London
stock insurers - ✔️✔️corporation owned by stockholders.
objective is to earn profit for stockholders by increasing the value of the stock and
paying dividends
Mutual insurers - ✔️✔️a corporation owned by policyholders. profits are distributed to
policyholders by dividends or rate reductions
types of mutual insurers - ✔️✔️advance premium mutual, assessment mutual, and
fraternal insurer
assessment mutual - ✔️✔️insurer has the right to assess policyholders an additional
amount if the insurer's financial operations are unfavorable
advance premium mutual - ✔️✔️insurer does not issue assessable policies
fraternal insurer - ✔️✔️a mutual insurer that provides life and health insurance to
members of a social or religious organization
Is Lloyd's of London an insurer? - ✔️✔️No
Lloyd's of London brokers - ✔️✔️represent policyholders to arrange coverage with
syndicates
syndicates - ✔️✔️offer insurance contracts in the market
who makes up a syndicate? - ✔️✔️members, managing agents, and underwriters
, insurance agent - ✔️✔️Someone who legally represents the principal (insurance
company) and has the authority to act on the principal's behalf
Is the principal responsible for acts of an agent? - ✔️✔️Yes, when the agent is acting
within the scope of authority
Agent Binding Authority - ✔️✔️provide temporary insurance until the policy is actually
written (typically with P&C, NOT life
brokers - ✔️✔️someone who legally represents the insured, places appropriate
coverage, is paid commission from insurer, and
surplus lines broker - ✔️✔️"Wholesalers" who work with retail Agents and Brokers,
licensed to place business with a "non admitted" insurer
surplus lines - ✔️✔️any type of insurance for which there is no available market in the
state
non-admitted insurer - ✔️✔️an insurer not licensed to do business in the state
independent agency distribution - ✔️✔️represent several unrelated insurers, agency
owns expirations and renewal rights
exclusive agency system - ✔️✔️the agent represents only one insurer or group of
insurers under common ownership. agents do not own expirations or renewal rights to
policies
direct writer system - ✔️✔️an insurer in which the salesperson is an employee of the
insurer, not an independent contractor. employees paid on "salary plus"
direct response system - ✔️✔️Insurer sells directly to the consumer by television or
some other media
what are the major insurance company operations? - ✔️✔️ratemaking, underwriting,
production, claims settlement, reinsurance, and investments
ratemaking - ✔️✔️the pricing of insurance and the calculation of insurance premiums
what is the problem with ratemaking? - ✔️✔️Firms do not know the cost of their
products in advance
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