Study 5

Question 1

Physical link between insurers and customers

Answer 1

Intermediary

Question 2

A system of marketing insurance through independent contractors (agents) who sell insurance on a commission or fee basis

Answer 2

Independent agency system

Question 3

A system of marketing insurance through agents who represent only one company or a group of companies under similar management

Answer 3

Exclusive agency system

Question 4

Insurance company selling directly to the public and not through independent agents or brokers

Answer 4

Direct writer- cooperators

Question 5

One who is appointed in a specific territory, the usually are given exclusive territory and may appoint sub-agents in that territory

Answer 5

General/provincial agent

Question 6

Who sells insurance?

Answer 6

(B.A.D.)

B. Brokers
A. Agents
D. Direct writers

Question 7

Applies when an agent is authorized to do something on behalf of a principal. The principal is a person or entity for which an agent or broker acts

Answer 7

Law of agency

Question 8

A_____1._____ is a contract by which a person called the ____2.____ commits a lawful business to the management of another called the ________3._________ who by accepting the contract is obliged to perform the contract

Answer 8

1. Contract (mandate-QC)
2. Principal (mandator-QC)
3. Agent (mandatary-QC)

Question 9

Insurance agents and brokers obtain their authority from….

Answer 9

The agreement or contract entered into with the insurers

Question 10

True or false: An express contract is always written

Answer 10

False- not always written, can also be oral

Question 11

One in which the terms of the arrangement have been specifically stated and agreed to by both parties in oral or in writing

Answer 11

Express contract

Question 12

One in which the parties have acted in such a way that it is understood that a principal-agent relationship exists even though no express statement may have been made by either

Answer 12

Implied contract

Question 13

What two types of bank accounts do Brokers and agents have to establish for the business?

Answer 13

1. Trust account

2. Operating account

Question 14

Any premium deposits to brokers or agents are supposed to be placed in which type of account?

Answer 14

Trust account

Question 15

What are the four regulations of agents and brokers?

Answer 15

(Q.L.O.R.)

Q. Qualifications
L. Licensing
O. Operational requirements
R. Renewal of license

Question 16

The capacity to confirm to people who have submitted insurance applications that they have insurance coverage. It gives agents and Brokers the power to make decisions that enter insurers into contracts of insurance.

Answer 16

Binding authority