Chapter 7 Building towards professionalism Flashcards

1
Q

Whos responsible for the admin of Insurance Act in Alberta?

A

Insurance Council

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2
Q

Define Ethics

A

The principles of conduct governing an individual/a group. This relates to the duty & obligation to others

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3
Q

3 temptations which could cause a broke to act unethically

A
  1. to sell more insurance then needed
  2. to sell higher priced coverage when equal coverage is available at a lower price
  3. recommend the policy with the highest commission percentage
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4
Q

6 reasons a brokers license may be revoked

A
  1. guilty of misrepresentation, fraud, deceit, or dishonesty
  2. contravenes any provision of the insurance act of its equivalent
  3. Unreasonably fails to pay insurer premiums collected & retained beyond the term in the agency agreement
  4. places insurance with unlicensed insurers
  5. proves to be incompetent or untrustworthy to transact insurance
    6.not following bylaws of province insurance councils
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5
Q

Brokers duty to insureds/clients

A

i) provide coverage best suited to clients needs,& to not take advantage of clients lack of experience/knowledge
ii) to be competent to perform the services undertaken on the client behalf
iii) hold affairs of a client in strict confidence, unless authorized or required by law to divulge such info
iv) to serve clients in a conscientious diligent & efficient manner

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6
Q

Brokers duty to Insurers

A

i) to abide by the terms of the agency/broker agreement
ii) to adhere to the binding authority granted b insurer
iii) deal honestly with the monies held in trust for insurer
iv) discuss to insurer all material facts about the risk even if such info might jeopardize the placement of the risk

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7
Q

Brokers duty to other brokers

A

i) use fair methods of competition in solicitation of business, consistent with the honor & dignity of the profession
ii) encourage public respect for & endeavor to improve the practice of the broker vocation
iii) co-operate in every reasonable way for the betterment of the industry
iv) treat fellow brokers with respect
v) not to harm the reputation of a fellow broker

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8
Q

Characteristics showed by all professions

A
  1. commitment to high ethical standards
  2. high standard of education preparedness & training, with mandatory continuous education
  3. formal association or society with regulating power over its members
  4. public recognition as a profession
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9
Q

6 common causes of brokers E&Os

A

1.inadequate coverage ( failure to provide proper coverage & other issues
2.misrepresentation & description errors
3.cancellation/renewal errors
4.policy change errors
5.processing delays
6.agency agreement violations

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10
Q

which common causes of E&Os is the largest cause?

A

inadequate coverage, failure to provide proper coverage

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11
Q

Examples of inadequate coverage provided

A

Examples:
- sewer backup missed
- recommending to a client against coverage on the erroneous assumption the risk is already insured
- clerical error resulting in loss or misplacing of client files

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12
Q

Examples where improper handling of renewals can cause problems

A

i) not renewing at all (missing automatic renewal process)

ii) not renewing adequate coverage (advising of changes in coverage, terms or conditions, new market has comparable coverage)

iii) not warning of pending expiry ( re-minding all insureds when renewal up-coming, any concerns on coverage continuation)

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13
Q

6 measures that will help brokers prevent E&Os

A
  1. ensure you are acting within the level of competence
  2. take all steps necessary to properly determine your clients needs
  3. keep within the bounds of your binding authority
  4. allow time to place coverage, advise client it could take some time, if difficult
  5. be advisers, rather than deciders for your client, let them know the options, &let them select their choice
  6. know the coverage & insurers & differences between each (common exclusions or addons)
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14
Q

8 steps a broker should follow when they have notified of a claim

A

Step 1: Report the claim immediately to the insurer

Step 2: Inform the insured they will be contracted by an adjuster & remind them of the duties imposed by the policy

Step 3: Do not authorized the insured to proceed with repairs or replacement nor make any statement that would commit the insurer to any course of action

Step 4: If certain loss is not covered, inform the insured of the fact

Step 5: Follow up periodically with the insured to ensure settlement is progressing

Step 6: Maintain proper claims records

Step 7: Be helpful to insureds while at the same time, avoiding any interference in the adjustment of the clam

Step 8: Maintain their integrity & professionalism

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15
Q

What’s the best defense against E&O claims & why?

A

Documentation

why?
- usually the word of the client over the brokers, so if all conversations documented, or confirm in writing, less chance of lack of credibility on you part

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16
Q

2 types of documentation that may help with E&O claims

A
  1. conversation & telephone logs ( all details, date, time, persons, discussion points, notes made
  2. confirming letters
17
Q
A