Chapter 2 - How Insurance is Organized in Canada Flashcards
writing insurance
The act of selling or issuing an insurance policy
Direct Writers
sells its insurance products directly to customers, typically through centralized call centres and online. The sales agents are employees of the insurance company and are limited to selling only those insurance products offered by the insurer
Intermediaries
An intermediary is a person or organization who acts as a mediator or link between two parties. Travel agents, investment brokers, and real estate brokers are common examples of intermediaries in the business world
Independent Agencies
Independent insurance agencies are independent businesses, typically owned by one or more individual agents under an exclusive arrangement with a sponsoring insurance company. This means they sell insurance for one insurer only. An independent agency owns the portfolio of business it generates. The commissions the agency earns from the insurer are used to pay office expenses.
The Co-operators Group is an example of an insurance company that offers its products to consumers through a national network of independent agencies.
Government Insurers
Federal and provincial governments are involved in providing various insurance plans, including medical insurance, employment insurance, and workers’ compensation.
Private Insurers
stock insurance companies
mutual insurance companies.
Business development
Appoint brokerage offices to sell its products
- Develop & manage brokerage contracts
- Promote the company products to the broker distribution force
- Provide broker training
Underwriting
- Choose which type of risks it wishes to write
- Establish underwriting criteria & broker binding authority
- Work with actuaries to determine pricing
- Analyze application forms submitted by brokers to ensure applicants’ risks meet established eligibility criteria
- Issue insurance policies & policy renewals
- Process cancellations
Finance
- Manage corporate investments
- Prepare brokerage commission statements
- Reconciliation of company payables with insurance brokerage offices
- Develop/administer policyholder direct payment plans
- Manage account payables & receivables
- Prepare financial statements
Claims
- Make certain all valid insurance losses are properly investigated
- Pay valid claims
- Ensure that the principle of indemnity is maintained
- Appoint & manage preferred vendors to repair damaged property or automobiles
Information technology
- Manage the acquisition &maintenance of all computer hardware & software
- Develop & maintain broker portals
- Provide help desk assistance for other departments and brokerage offices
- Gather & co-ordinate all data generated by all departments
- Produce management reports for all departments
Other Insurance Markets
Lloyd’s of London as a marketplace for insurance buyers and sellers.
or a managing general agent - A managing general agent (MGA) is a type of insurance brokerage that has been granted authority by one or more insurance companies to transact business on their behalf.
