Types Of Producers And Insurers Flashcards
What are the 3 types of producers? Define them.
Agents, brokers, and solicitors (aka field underwriters)
Agents: person = appointed to represent insurer = cannot charge fees
Brokers: not appointed, represents buyer not insurer = can charge fees
Solicitor: individual = appointed and employed to represent only one agent or broker = cannot bind contracts
What is E&O?
Errors and omissions; professional liability for non-medical professionals = mistake insurance
Agents have 3 authorities/power. What are they?
Expressed - in writing (contract)
Implied- not in writing (between agent and insurer)
Apparent- gives the impression that authority exists
An insurance agent is appointed to transact…
All lines and classes except life and disability
Law of agency is the relationship between…
Agent is authorized to represent and act for the insurer (principal)
Which marketing system does the insurer not own the expiration list?
An independent agency
Errors and omissions is a type of lability insurance…
For non-medical professionals. Insurance agents use this to protect themselves if they give incorrect advice or information to a client.
Agency name cannot end with…
Insurance, underwriter or company
(Blank) is required for an agent or solicitor to transact.
Appointment
First appointment is an implied declaration that the person is of good reputation and worthy of the license.
What is an inactive license and expired license?
Inactive = no appointment on file however fees and education are current Expired = fees and/or education are not current
What are the 4 divisions of an insurer?
Marketing/sales, underwriting, claims and actuarial
The laws that govern these 4 divisions is known as the Market conduct regulations
4 major categories of insurers
Property, casualty, life, accident & health
California code has xx classes/lines of insurance..
22 classes/lines (casualty is not a class but a label for several classes)
Process when mutual insurer becomes a stock insurer.
Demutualization
An insurer who offers rates to insureds who have an average or better than average loss exposure is considered…
Standard market insurer
Describe Independent Agencies/Agent.
Appointed to represent more than 1 insurer. Own their accounts, policy records and renewals
Describe Exclusive/Captive Agencies/Agent
Appointed to represent a single insurer, or one with common ownership or affiliates.
A direct writer is considered to be a(n) XXX of an insurer.
Employee; insurer owns the policies and renewals.
Marketing/distribution system that does not use an agent.
Direct Mail (or Direct response); part of mass marketing.
Describe Surplus Lines Broker.
Only license that may transact with non admitted insurers.
California requires anyone who transacts insurance to be…
Licensed
State of California uses the term transact to include…
TENS
Transaction (servicing existing contracts), Execution (issuing policy or binder), Negotiations (quoting), Solicitation (bulk mail)
A Managing General Agent (MGA) writes what percentage of premium of the policyholder’s surplus?
MGA cannot…
5% or more of insurer’s premium
MGAs cannot settle claims.
A person who acts in the capacity that requires an active license without having a valid license is guilty of a…
Misdemeanor
