general principles

Question 1

Managerial System

Answer 1

Insurer employs sales representatives through regional offices, branches, or agencies. The agency head (called a general manager, or GM) is an employee of the insurer. The insurer is responsible for agency expenses and staffing.

Question 2

General Agency System

Answer 2

Agency head is an independent contractor (called a general agent, or GA) who employs sales representatives. The contractor is responsible for agency expenses and staffing and is not an employee of the insurer.

Question 3

Reinsurance

Answer 3

this is done through a formal agreement in which both the risk and the premium is shared with one or more other companies.

Question 4

Fraternal Insurance Company

Answer 4

A type of not-for-profit insurance provider that is operated by an organization that has a representative form of leadership, operates on a lodge system, and exists solely for the benefit of its members and their beneficiaries