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RMIN 4000 Edmunds Exam 2|148 Complete Questions and Answers
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RMIN 4000 Edmunds Exam 2|148 Complete Questions and Answers
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RMIN 4000 Edmunds Exam 2|148Complete Questions and Answers
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
- 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.
- 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
- importance of large brokerage firms - -very important for commercial P&C,
have knowledge of specialized markets, and provide risk management and
loss-control services
- 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 some methods to sell individual insurance policies to - -employer
groups, labor unions, trade associations, college and university alumni, and
others groups like AARP or AAA
- 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)
- 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
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