Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

C70 Gateway to Commercial Insurance > Study 2 - Commercial Insurance Stakeholders > Flashcards

Study 2 - Commercial Insurance Stakeholders Flashcards

1
Q

What are the two most common classification systems used by Canadian insurers?

A

NAICS
North American Industry Classification System

SIC
Standard Industrial Classification

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are some things that affect the exposure of a business?

A

Size, location, expertise, claims history and regulatory requirements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What roles are essential in commercial insurance?

A
  • Brokers/agents
  • Underwriters
  • Commercial claims professionals
  • Risk analysts
  • Managing general agents (MGAs)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Define captive agent

A

Place all their business with one insurer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Define agent

A

Represent one insurer and operate according to agreements with that insurer; can be independent or exclusive

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Briefly outline the various levels of licenses and what business can be managed

A

1 - Sale of home, auto & travel; some commercial only if supervised by a level 2 or level 3

2 - Personal, farm and commercial; cannot manage an agency

3 - With required years of experience, can manage an agency and sell all personal/commercial insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

How do personal and commercial insurance risks vary?

A

Commercial is more varied and complex; many different industries typically

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Define rate manual

A

Manual containing rates and underwriting rules for use by staff, agents, and/or brokers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What 4 areas must commercial brokers be proficient in?

A

Communication
Research
Negotiation
Time Management

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Explain how a commercial broker must use communication

A

Ability to use the right questions to effectively gather info to determine loss exposures and present an accurate & comprehensive picture of a risk to the insurer

Ability to help clients understand coverage and restrictions or excluded coverage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Explain how a commercial broker must use research

A

Ability to find coverage best suited to needs and budget

Ability to provide innovative and cost effective solutions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Explain how a commercial broker must use negotiation

A

Ability to arrive at a satisfactory arrangement for both insurer and insured

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Explain how a commercial broker must use time management

A

Ability to remain organized, prioritize tasks, and ensure accurate documentation is maintained
Ability to demonstrate reliability by being on time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Define line guide

A

A listing of the maximum amounts of exposure an insurance company is prepared to accept on various classes of risk

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What three conditions would cause an underwriter to decline a risk?

A
  • It is not permitted by the line guide
  • Market conditions make the risk unacceptable
  • It is too flawed to be accepted
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What are four tools available to make a risk more desireable?

A
  • Higher deductibles
  • Higher premium rates
  • Modifications of coverage
  • Implementation of recommendations by the loss control department
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are some unique characteristics of commercial underwriters?

A

Analytical and critical thinking

  • Ability to work through the info provided and organize it to determine whether any further details are needed
  • Ability to compare the risk to the guidelines and philosophy of the company to ascertain whether it can be accepted or altered/rejected

Math and statistics
- Ability to apply actuarial rates based on risk and application of differentials, loading and any other applicable changes

Communication

  • Ability to communication with brokers and other professionals to obtain a clear picture
  • Ability to tactfully decline a risk

Attention to Detail
- Ability to keep notes and correspondence organized and files up to date, and to follow up on requests or process documents correctly and in a timely manner

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Define loading

A

An additional charge included in an insurance rate to reflect a hazard not contemplated

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What do claims professionals do?

A
  • Investigate claims
  • Make recommendations
  • Negotiate payments and settlements
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What are the typical responsibilities of a claims professional?

A
  • Confirming their authority with regard to the handling of a claim
  • Checking policy coverage to ascertain relevant info
  • Supplying the insurer with relevant documentation such as preliminary notice of loss or accident report
  • Investigating the claim
  • Keeping the insurer and insured informed of development
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Define managing general agent (MGA)

A

Independent business operation given authority by a number of insurance companies to solicit business on behalf of such companies. Responsibilities include recruiting, training and supervising agents

“The brokers’ brokers”

22
Q

What are the typical duties of a risk analyst?

A
  • Identifying loss exposures
  • Preventing loss
  • Reducing loss
  • Loss financing
  • Educating other corporate managers
  • Acting as a resource to other managers
23
Q

What activities do classification systems make easier?

A
  • Business analysis
  • Marketing
  • Business listing
  • Data mining
  • Investment decisions
24
Q

What three countries did the NAICS collect data from?

A

Canada, United States, Mexico

25
Q

Explain the breakdown of a NAICS code

A

First two digits - largest business sector
Third digit - company subsector
Fourth digit - industry group company belongs to
Fifth digit - company’s particular industry of operation
Sixth digit - national industries

26
Q

What is the difference between SIC codes and NAICS codes?

A

SIC
4 digits
mainly older industries (manufacturing & agriculture)

NAICS
6 digits
more comprehensive and newer industries (tech)

27
Q

What are the top 10 Canadian industries as a percentage?

A

1) Real estate and rental and leasing (13%)
2) Manufacturing (10%)
3) Mining, quarrying and oil and gas extraction (9%)
4) Construction (7%)
5) Finance and Insurance (7%)
6) Health care and social assistance (6)
7) Public administration (6%)
8) Wholesale trade (6%)
9) Professional, scientific and technical services (5%)
10) Retail trade (5%)

28
Q

What are the important considerations of “real estate, renting and leasing” as it pertains to insurance?

A
  • Type, size, value and category of properties being managed (commercial buildings, residential, strip malls, high rise complexes, and so on)
  • Procedures and expertise of staff and any contractors handling maintenance and repairs
  • Leasing and tenancy procedures
29
Q

What are the important considerations of “manufacturing” as it pertains to insurance?

A
  • Process for assembly of products
  • Specialty machinery or equipment used
  • Specialized training or certification requirements
  • Safety protocols
  • Hazardous or dangerous chemicals or parts utilized
  • Pollution protocols
  • Product liability
30
Q

What are the important considerations of “mining, quarrying, and oil and gas extraction” as it pertains to insurance?

A
  • Processes and specialized equipment
  • Geographic locations
  • Safety protocols
  • Environmental pollution prevention
  • Skilled or certified labour requirements
31
Q

What are the important considerations of “construction” as it pertains to insurance?

A
  • Type and size of projects
  • Specialized coverage for designer buildings
  • Experience of builders, designers, and engineers; are they contracted or employees?
  • Professional liability for errors
  • Bonding
32
Q

What are the important considerations of “finance and insurance” as it pertains to insurance?

A
  • Online exposures
  • Cyber/hacking exposures
  • Geographic exposures (many finance and insurance companies operate in multiple countries)
33
Q

What are the most common considerations for a business?

A
  • Size
  • Location
  • Expertise
  • Claims history
  • Regulatory requirements
34
Q

What are some ways you could assess the size of a commercial risk?

A
  • Annual revenue
  • Number of employees
  • Place of business
  • Equipment
35
Q

What are some ways you could assess the location of a commercial risk?

A
  • Geographic location
  • Urban versus rural properties
  • Environmental factors
36
Q

What are some ways you could assess the expertise of a commercial risk?

A
  • Business owner’s training and history
  • Length of time in business
  • Stability
  • Credability
37
Q

What are some ways you could assess the claims history of a commercial risk?

A
  • Patterns
  • Frequency of losses
  • Potential for future losses
38
Q

What are some ways you could assess the regulatory requirements of a commercial risk?

A
  • Eating establishments
  • Childcare/education
  • Financial services
  • Agricultural products
  • Drugs and cosmetics
39
Q

What are the four essential skills for the workplace?

A
  • Collaboration
  • Active listening
  • Asking effective questions
  • Delivering difficult messages
40
Q

What are some standard actions that can lead to effective collaboration?

A
  • Agree on roles and responsibilities
  • Be clear about expectations
  • Establish communication protocols
  • Create shared objectives
  • Identify obstacles and challenges
  • Address issues as soon as possible
  • Give credit to others
  • Be open to constructive conflict
41
Q

What are some standard actions that can lead to effective active listening?

A
  • Physically demonstrate listening to the speaker
  • Concentrate on the other person’s position
  • Observe non verbal communication
  • Allow the speaker to finish
  • Respond with short phrases
  • Repeat the speaker’s exact words
  • Clarify the speaker’s meaning
  • Summarize the conversation
  • Reflect on the conversation
42
Q

What are some standard actions that can lead to effective questioning?

A
  • Ask open ended questions
  • Listen actively
  • Encourage questions
  • Ask follow up questions
  • Be tone conscious
43
Q

What are some types of questions you could use?

A
  • Open ended questions
  • Hypothetical questions
  • Probing questions
  • Reflective questions
44
Q

What are some helpful strategies for questioning techniques?

A
  • Avoid questions that focus on why someone didn’t succeed
  • Avoid leading questions
  • Think about how assumptions may be embedded within a question
45
Q

What are some reasons you may need to deliver a difficult message?

A
  • An unanticipated development
  • A failure to achieve a task
  • A change in strategy
  • An unexpected result
  • A surprising disclosure
46
Q

What are some general skills for delivering a difficult message?

A
  • Be timely
  • Be specific
  • Be honest
  • Focus on facts, not feelings
  • Stay positive
47
Q

What could you do before and during a difficult conversation?

A

BEFORE:

  • Anticipate reactions
  • Plan for the conversation

DURING:

  • Frame the conversation
  • State the decision
  • Provide context and supporting facts
  • Discuss what happens next
48
Q

What are the two components of active listening?

A

Listening and engaging

49
Q

Identify and explain the purpose of the two industry classification systems used by Canadian insurers.

A

• The purpose of classification systems is to make business analysis, marketing, business listing, data mining, and investment decisions easier.
• The North American Industry Classification System (NAICS) was created after NAFTA.
o NAICS has a six-digit coding system with 1,000 distinct codes
o 20 sectors: 5 for goods production, 15 for service industries
• Standard Industrial Classification (SIC) was created by the US government in 1937.
o SIC codes are four-digit and can be used in tandem with NAICS
• NAICS is more flexible and includes newer industries; SIC is mostly manufacturing and agriculture.
• Canadian insurers use a mix of SIC and NAICS codes.

50
Q

Why should commercial insurance underwriters review a client’s claims history?

A

• The underwriter should be looking for certain patterns.
• Frequent claims can indicate the following:
o Carelessness by the client
o Property that is in disrepair
o Poor storage or security procedures
o Financial difficulties
• Small claims that eventually become large claims may indicate fraudulent claims.

C70 Gateway to Commercial Insurance (10 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions