History of Insurance Flashcards
What is meant by ‘‘spreading the risk”?
Sharing the losses of a few among the many.
What is “bottomry”?
You receive a loan up-front and pay it back with a premium if the risk event does not occur.
What is meant by ‘‘General Average’’ ?
A general loss. All cargo stakeholders(owner & shipper) share damages and losses evenly.
Insurance as we know it today can be traced back to what event?
Sharing the risk or risk sharing. As early as 3000 BC.
Where did the term ‘‘underwriter’’ originate from?
1688 - Lloyd’s of London. Wealthy individuals of Lloyd’s Coffee House would take a share of a risk, would sign below on a policy with an amount they each agreed to cover.
What are firemarks?
A metal emblem placed on the front of a house, indicating to the fire insurance company that the owner has fire insurance and shows the company the insurance is placed.
What is the largest single class of property and casualty insurance in Canada?
Automobile Insurance
When were standard policy wordings adopted by the provinces?
1930’s
Why did some provinces create government automobile plans?
To deal with issues of owners operating an automobile without insurance coverage.
Why did no-fault develop?
To eliminate minor accidents from the courts.
What is the goal of MPI?
To provide universal coverage at a price lower than private carriers.
Outline the development of IBAM.
1951 - General insurance agents in Manitoba formed their association just after the Red River Flood that occurred in 1950.
Under the Code of Ethics, what duties are owned to the public?
- To remember that our first obligation is to our clients and to the insuring public.
- To provide for my clients with the highest standard of professional service.
- To ensure that my advice to them is based on the highest level of professional integrity and performance.
Under the Code of Ethics, what duties are owned to your insurers?
- To maintain a loyal relationship with my insurers, in the knowledge that it is only through coordinated action that an orderly insurance market can be achieved.
- To provide my insurers with all information with may affect the underwriting or administration of the contract.
- To respect the authority vested in me to act on their behalf in servicing the public.
Under the Code of Ethics, what duties are owned to your colleagues?
- To carry out my professional activities according to the principle of fair competition.
- To seek at all times to elevate the standards of the insurance profession and to encourage others in my profession to do likewise.
What is the concept of insurance?
To share losses of a few among the many.
Why were Fire Brigades formed?
To protect their insured’s property only - not for the protection of the general public or the protection of the rival company’s insureds.
What happens if a property is not insured?
The brigade would return home or stay to watch the property burn down.
Until what year did the firemarks have a policy number on them?
1708
Who is Gilbert J. Loomis of Dayton, Ohio?
He was the first individual to buy an automotive liability insurance policy in 1897.
What provinces is the Government Automobile Insurance Plans only available in?
BC, SK, MB and QC.
What are the different methods Insurers use to sell their products?
- Direct Writing System - producers are employees of the insurer and are limited to selling only those products provided by the insurer.
- Independent Brokerage System - the producers of an independent brokerage system are not employees of insurers and may represent many insurers.
- Exclusive Agent - are obligated to place business with one insurer but remain independent in the operation of their offices.
