Study 5 - Managing Fraud Risk at POS Flashcards
Who are intermediaries accountable to?
Regulatory bodies with detailed codes of conduct and areas of responsibility
What must the insurance intermediary explain to the client while working on the application?
The consequences of misstatements or risk concealment
What should clients be advised of regarding their application for insurance?
All information provided will be verified through databases and credit history
What does the insurance application serve as?
A template for gathering information
Which of the following would present as a red flag on an insurance application?
The applicant does not live or work nearby.
What is a phantom vehicle?
A vehicle that does not exist or is already wrecked
Why is a property inspection necessary?
It proves that the property exists.
What is the greatest premium exposure for insurers in large urban centres?
Private passenger vehicles
Which of the following is NOT a red flag for property inspections?
The business is open all year long.
Which of the following are intermediaries NOT required to do to maintain their licence?
Sign a minimum number of new clients each month as set by the company owner
What information may require further investigation during the insurance application process?
-An intermediary may require more details from the potential client if he or she
*Does not live or work nearby
*Lives in an area not consistent with income or occupation
*Has lived at his or her home for less than six months
*Requires high limits of coverage that are not consistent with income or lifestyle
*Works in an automobile-related business
What financial red flags may an intermediary spot during the application process?
-is in debt;
-has a prior bankruptcy;
-is self-employed or unemployed; or
-is unable to verify his or her business or location.
-(client’s business):decreasing sales, or a trend of decreasing profits.
In terms of behaving ethically, what are intermediaries’ duties to clients?
-provide the coverage best suited to the clients’ needs;
-not be swayed by remunerative gain;
-not take advantage of clients’ lack of knowledge or inexperience;
-not speak ill or put in a negative light any industry partner, associate, or competition;
-hold information in strict confidence; and
