CH 5

Question 1

Brokerage Agreement

Answer 1

A contract outlining the terms and conditions between a broker and insurance company.

Question 2

Authority

Answer 2

The limits placed on a broker by an insurer regarding the types of risks they can accept.

Question 3

Expiration Ownership

Answer 3

Broker’s right to manage client policies, sometimes challenged by insurers for unpaid premiums.

Question 4

Agency Billing

Answer 4

Brokers handle billing clients and paying insurers.

Question 5

Direct Billing

Answer 5

Insurance companies bill clients directly.

Question 6

Commissions

Answer 6

Broker’s earnings, typically ranging from 10-20%, often tied to performance.

Question 7

Termination Notice

Answer 7

Required period of warning before ending a brokerage agreement.

Question 8

Hold Harmless Clause

Answer 8

Protects brokers from insurer liability.

Question 9

PIPEDA

Answer 9

Personal Information Protection and Electronic Documents Act.

Question 10

EDI Provisions

Answer 10

Liability for data loss during electronic transmission.

Question 11

Profit Sharing Agreement

Answer 11

Incentivizes brokers by sharing profits based on performance conditions.

Question 12

Business Volume

Answer 12

Level of insurance business generated by the broker.

Question 13

IBNR Claims

Answer 13

Losses reported after the policy period.

Question 14

Loss Definitions

Answer 14

Rules for categorizing and calculating insurance losses.

Question 15

Insurance Market Selection

Answer 15

Choosing the right insurer to partner with.

Question 16

Marketing Philosophy

Answer 16

The approach an insurer takes to promote its policies.

Question 17

Claims Services

Answer 17

Methods used to process and manage insurance claims.

Question 18

Policyholder Services

Answer 18

The support and assistance provided to policyholders.

Question 19

Financial Stability

Answer 19

An insurer’s financial health and ability to pay claims.

Question 20

Underwriting Procedures

Answer 20

Rules and processes for accepting or denying insurance applications.

Question 21

Number of Insurers to Represent

Answer 21

The number of insurance companies a broker is best suited to have.

Question 22

Attracting Insurance Appointments

Answer 22

Techniques for convincing insurance companies to work with a brokerage.

Question 23

Broker-Insurer Relations

Answer 23

The quality of working relationships between brokers and insurers, key for success.

Question 24

Channels of Communication

Answer 24

Methods used by insurers and brokers to connect and share information.

Question 25

Special Programs/Enhanced Authority

Answer 25

Programs offering brokers expanded roles and responsibilities.