Chapter 1 Flashcards
What do you call the company activities specifically associated with administering life insurance policies- including u/w, reinsurance, CS, and claims?
Insurance administration.
Define the term applicant.
The person/entity that submits an application for individual insurance and seeks to purchase the insurance coverage.
Define the term proposed insured
during the UW process, this is the person whose life, health or income is to be covered by an insurance policy.
Define the term insured
the person whose life, health or income is covered by an insurance plan
Define the term policyowner
the person or entity that owns an individual life insurance policy
Define the term beneficiary
the person or party that the owner of the pollcy named to receive the policy benefit.
Define the term groupo policy holder
the person or organization that decides what types of group insurance coverage to purchase for a specific group negotiates the terms of the group insurance contract, and purchases the group insurance coverage.
Define the term group prospect
A group that has applied for- but has not yet been approved for - group coverage from an insurance company
Define the term group insured
an individual covered by a group insurance policy.
what is a third-party policy?
an individual insurance policy that is purchased by one person or business on the life of another person.
What is the role of the financial professional
in context of insurance sales- refers to any individual who is licensed to sell insurance products.
sales agents, brokers, financial advisors, and bank affiliated sales personnel.
For life insurance companies, what are the primary administration functions?
new business underwriting reinsurance customer service claims.
What is New Business?
the activities an insurer undertakes in receiving applications, underwriting applications and issuing policies.
What is Underwriting?
the process of 1) assessing and classifying the degree of risk represented by a proposed insured or group with respect to a specific insurance product and 2) making a decision to accept or decline that risk.
Who is an underwriter?
an insurance company employee who performs the risk assessment, classification, and selection process.
What is reinsurance?
insurance that one insurance company obtains from another insurance company to protect against the possibility of financial loss associated with isnruance policies issued b y the first company
What is customer service?
the broad range of activities that a company and its employees perform to keep customers satisfied so that they will continue doing business with the company and speak positively about it to others.
What is policyowner service?
a specific type of customer service that includes all the service activities performed for people or entities that own individual insurance policies.
CS transactions for group insurance can be different and some companies devote a segment of CS exclusively to member service. What is member service?
customer service activities performed for group insureds. Member service personal provide information and answer questions about a group plan’s eligibility requirements, benefits, and contract provisions.
A policy’s life cycle ends at claim time. The claim administration staff review the claim and determine the liability. What is claim administration?
the process of evaluating each submitted claim, deciding whether the claim is valid, informing the person who submitted the claim of the decision, and authorizing the payment of each value claim according tot the terms of the policy.
Define the term marketing
the functional area of an insurance that is responsible for
- identifyng the insurers customers and the prodcuts or serviecs that its what custimers want
- promoting and distributing those products or services to customers.
Define Actuary
its a technical expert in insurance, annuities and other fiancnial products who applies mathematical knowledge to industry and company statistics to calculate carious fiancnial values.
What are the occupational duties of actuarial staff of an insurance company?
- predict rates of death with statistics
- calculate premium rates for insurance products
- determine legal reserve liabilities,
- conduct research on trends in mortality rates, policy lapses, loans, and interest rates
- engage in financial reporting activities
What is the action of accounting?
area of insurance company responsible for collecting, recording, summarizing, analyzing, and reporting data about a company’s financial condition.
What is handled in the treasury operations department?
employees manage cash as it flows through the company.
- set up bank accounts and disburse policy proceeds via checks and e-trans.
what is handled in the legal department of an insurance company
legal matters
- advise life insurance claim personnel when claims are disputed
2. represent the company of supervise outside attorneys in any litigation involving the company
3. develop or review policy forms, agency contracts, business contracts and other lfeal documents.
what are the responsibilities of the compliance department?
responsible for ensuring that the insurer adheres to all applicable lasws and regulations in each jurisdiction in which the company does business.
What is hanlded by the Human Resource’s department?
1 recruit job candidates and screen applicants
- help select qualified employees
- plan and present appropriate onboarding and development for each employee
- administers employee benefit programs
- maintain employee records
What is handled by the IT area of the insurance company?
they develop and maintain the company;s information system and oversees information management thorughout the company.
What is an information system?
an interactive combinaiton of technology, people and processes that collects, manipulates and disseminates information.
What is information management?
the use of information systems to provide employees with the information they need to carry out their job responsibiliites
what is the definition of customer service?
the impression of a company that a customer forms over time as a result of a series of encouters with the company.
To coordinate customer expierience initiatives across business units, insurers engage in customer experience management (CEM). What is time.
an enterprise-wide business strategy that allows an organization to manage all aspects of its interactions with current and potential customers
Insurance companies gauge the customer experience by looking at touchpoints. There are 4 major touch-points for customers of life insurance. What are they?
- Shopping experience
- Purchase experience
- In-force experience
- Claims experience.
What can enhance a customers shopping experience?
- ease of conducting research
2. contact to CSR to dicuss poential purchases
what can enhance a customers purchase experience?
- efficiency and ease of the application process
- how quick and easy the u/w process is
- how understandable the contract is for the customer
- how clearly any changes are explained
- how long it takes to receive the cotnract.
What factors can contribute to a positive in-force experience?
1 frequency of insurer-customer contacts
- ease of doing business with the insured
- the insurer’s accuracy in handling transactions and requests
- insurer responsiveness to envolving customer needs.
What are 4 significant factors that can improve the claims experience?
- ease of contacting the insurer
- sensitiveity and compassion shown by the insurer’s employees
- accuracy of claim processing
- speed in completiting claim administration
What is the “customer journey”
the path each individiual customer travels with a company, behinning wiht the first touchpoint and ending with the last.
What is the purpose of a customer journey maps?
provide visual representations of a customer interactions with a company
what is a pain point?
a real of imagined problem for a customer that a company plans to solve.
What is a customer-centric philosophy
focuses on the needs of customers and how to fill those needs.
Why do customer-centric companies strive to understand their customers?
so they can
1. provide personalized services
2 meet and exceed customer expectations
3. earn customer trust and loralty
Who is the Chief Customer Experience Officer (CCXO)
a senior-level executive who is responsible for managing corporate strategies to improve the customer experience.
- brings together the efforts of various business unites to ensure that the company presents a unified, coordinated response to customers needs.
What are the main challenges to implementing effective CEM measures?
- Company cultures
- Data integration
- Resource allocation
- Continuous measurement and improvement.
- Industry disruption
Insurers hold a position of public trust making ethics- define this
a system of accepted standards of conduct and moral judgement that combines the elements of honesty, integrity, and fair treatment- essential.
What is discrimination among risks considered lawful?
When it is based on recognized actuarial principles and actual or reasonably anticipated experience.
administration staff who interact with customers have an ethical and sometimes legal duty to do what?
- use only lawful, reasonable, and ethical means of collecting information
- secure authorization to collect information when required.
- use only accurate information
- restict access to personal information to those who have need for it
- follow an insurer’s written guideline on how to safeguard confidential information.
