Chapter 1 Flashcards
Key Term : A person licensed and authorized or employed to act on behalf of another.
Agent
Key Term: A licensed independent person or firm who acts on behalf of an insured in placing business with insurance companies
Broker
Key Term: A person who is an investor in a company and owns a piece of the company through purchasing a share or shares. The shareholder can benefit from ownership if the company makes a profit or can lose financially if it does not.
Shareholder
Key Term: A person to whom the administration of something is entrusted for the benefit of another. A fiduciary has a greater legal obligation than others to discharge duties honestly and diligently
Fiduciary
Key Term: Bond executed on behalf of a person appointed by a court to a position of trust that guarantees the performance of statutory duties and property accounting.
Fiduciary Bond
Key Term: The fraudulent acquisition and use of a person’s private identifying information, usually for financial gain.
Identity Theft
Key Term: A criminal offence committed through a computer or the internet that causes loss or damage to the victim’s computer system, network or data; Denies access to data or service; or enables further related crimes such as extortion or the resale of stolen data.
Cyber Crime
Key Term: A federal statute that governs the collection and use of personal information. It States that the personal information to be collected must be relevant, and that all information that has been collected, is being collected or will be collected must be held in the strictest of confidence.
Personal Information Protection and Electronic Documents Act (PIPEDA)
Key Term: An insurance form that protects the insured against liability for committing an error or omission in the performance of professional duties. Generally, such policies are designed to cover financial loss rather than liability for bodily injury or property damage.
Errors & Omissions (E&O) Insurance
Key Term: 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.
Law of Agency
Key Term: A code of conduct prepared by association and other recognized groups of authority that can be referenced to define what the conduct should be for a particular group.
Standard of Care
Key Term: A legal principle calling for the highest standards of integrity on the part of the insured and the insurer
Utmost Good Faith
Key Term: A broker or agent who sells insurance
Producer
Key Term: A system for collecting premiums whereby the agent or broker bills and collects the premium in full from the insured and transmits the payment minus the earned commission to the insurer as required by the terms of the agency or brokerage contract.
Broker Bill
Key Term: A system for collecting premiums whereby an insurer bills and collects the premium directly from the insured as opposed to the agent or broker being a middle person. Premiums are usually collected monthly by direct debit from the insureds bank account.
Direct Bill
