LOMA 291 Module 2 UPDATED ACTUAL Questions And Correct Answers
Terms in this set (95)
Omnichannel distribution allows customers to choose how they wish to engage with insurer, lets companies
create personalized interactions with customers/business partners
Worksite marketing distributing voluntary benefits to people at their place of work
Location-selling systems may be in businesses like department stores, big box stores, grocery stores,
funeral homes, Can be staffed by financial professionals, self-service options
Distribution systems used by insurance companies to connect products or services with customers
who might want or need them
Direct distribution system customer buys directly from insurer or through member of insurer's direct sales
force
Career agents (captive agent) agent under full-time contract with an insurer to sell primarily that insurance
company's products
Multiple-line exclusive agents (MLEAs) agent who sells products for one insurance company, with majority of sales being
property-casualty products
Intermediary distribution system insurance company relies on other individuals and orgs. To sell product to
customer
Direct-to-consumer (D2C) sales non face-to-face distribution programs, directed by insurance company,
insurance company encourages purchase of its products by marketing directly to
customers, or customer can contact company
agency operations units support direct sales force, Make sure strategic goals/objectives of unit are
consistent with insurer's goals
Make policies and procedures for unit operations in compliance with regulatory
requirements
Set performance standards
Home office services, customer service
First-year commission designed to generate sales, rates for insurance policies range from 40-90% of
policy's first-year premium
Renewal commission rates lower than first-year, 2-5% premiums received, paid only on policies that stay
in force, designed to motivate quality business
Service fee small % of premiums (1-2%) that is payable after renewal commissions have
ceased, insurer pays this, Paid to the agent who is currently providing service to
the customer, even if it's not the agent that sold the policy
Trail commission % of annuity's accumulated value paid periodically (usually annually) to financial
professional that sold the annuity
, Churning agent makes client replace one policy after another, so they can get first-year
commissions on the replacements
Twisting agent misrepresents features of policy to make customer replace existing policy
Rebating agent offers prospect of inducement (cash value) to buy policy that isn't offered
to all applicants in similar situations and isn't stated in the policy itself
Independent agents agents whose activities aren't dictated by a single insurance company
Personal-producing general agents (PPGAs) enter agent contracts with 1+ insurers, sell more than 1 insurer's products,
experienced financial professionals, largely responsible for their own office space
and other expenses, require little training other than on specific products
Independent distribution network (independent marking independent agent doesn't do business directly with insurance company, they
organization (IMO), brokerage general agent (BGA) submit business to the company through additional intermediary
Broker-dealer financial institution that buys and sells securities (stocks, bonds, mutual funds)
either for itself or for its customers Have to be SEC registered and member of
FINRA
Registered representatives (registered reps) people who work for a broker-dealer selling securities and are FINRA registered
Registered investment advisers (RIAs) give advice on investing in securities, larger firms (>$100M client assets) register
with SEC, smaller firms register with state securities authorities
Platform employees sell simple life products - term - refer clients with complex financial needs to
financial consultants
Nonproprietary product insurance product developed by 1 insurance company that is sold by another
insurance company
Employee benefits broker (employee benefits consultant) person or org. that helps employer assess benefit needs of their workforce,
design, implement, and administer benefit program
Wholesaler person who promotes insurer's products to intermediaries, gives intermediaries
marking support
Channel conflict adding new distribution channel can cause conflict between insurer's different
distribution channels or between an insurer and members of its distribution
channel
Channel cannibalism new channel steals customers from existing channel instead of getting new
customers
Suitability looking at if product is right for applicant based on their needs and finances
Best interest standard legal requirement that considers consumer's interest, not interest of financial
institution/professional
Terms in this set (95)
Omnichannel distribution allows customers to choose how they wish to engage with insurer, lets companies
create personalized interactions with customers/business partners
Worksite marketing distributing voluntary benefits to people at their place of work
Location-selling systems may be in businesses like department stores, big box stores, grocery stores,
funeral homes, Can be staffed by financial professionals, self-service options
Distribution systems used by insurance companies to connect products or services with customers
who might want or need them
Direct distribution system customer buys directly from insurer or through member of insurer's direct sales
force
Career agents (captive agent) agent under full-time contract with an insurer to sell primarily that insurance
company's products
Multiple-line exclusive agents (MLEAs) agent who sells products for one insurance company, with majority of sales being
property-casualty products
Intermediary distribution system insurance company relies on other individuals and orgs. To sell product to
customer
Direct-to-consumer (D2C) sales non face-to-face distribution programs, directed by insurance company,
insurance company encourages purchase of its products by marketing directly to
customers, or customer can contact company
agency operations units support direct sales force, Make sure strategic goals/objectives of unit are
consistent with insurer's goals
Make policies and procedures for unit operations in compliance with regulatory
requirements
Set performance standards
Home office services, customer service
First-year commission designed to generate sales, rates for insurance policies range from 40-90% of
policy's first-year premium
Renewal commission rates lower than first-year, 2-5% premiums received, paid only on policies that stay
in force, designed to motivate quality business
Service fee small % of premiums (1-2%) that is payable after renewal commissions have
ceased, insurer pays this, Paid to the agent who is currently providing service to
the customer, even if it's not the agent that sold the policy
Trail commission % of annuity's accumulated value paid periodically (usually annually) to financial
professional that sold the annuity
, Churning agent makes client replace one policy after another, so they can get first-year
commissions on the replacements
Twisting agent misrepresents features of policy to make customer replace existing policy
Rebating agent offers prospect of inducement (cash value) to buy policy that isn't offered
to all applicants in similar situations and isn't stated in the policy itself
Independent agents agents whose activities aren't dictated by a single insurance company
Personal-producing general agents (PPGAs) enter agent contracts with 1+ insurers, sell more than 1 insurer's products,
experienced financial professionals, largely responsible for their own office space
and other expenses, require little training other than on specific products
Independent distribution network (independent marking independent agent doesn't do business directly with insurance company, they
organization (IMO), brokerage general agent (BGA) submit business to the company through additional intermediary
Broker-dealer financial institution that buys and sells securities (stocks, bonds, mutual funds)
either for itself or for its customers Have to be SEC registered and member of
FINRA
Registered representatives (registered reps) people who work for a broker-dealer selling securities and are FINRA registered
Registered investment advisers (RIAs) give advice on investing in securities, larger firms (>$100M client assets) register
with SEC, smaller firms register with state securities authorities
Platform employees sell simple life products - term - refer clients with complex financial needs to
financial consultants
Nonproprietary product insurance product developed by 1 insurance company that is sold by another
insurance company
Employee benefits broker (employee benefits consultant) person or org. that helps employer assess benefit needs of their workforce,
design, implement, and administer benefit program
Wholesaler person who promotes insurer's products to intermediaries, gives intermediaries
marking support
Channel conflict adding new distribution channel can cause conflict between insurer's different
distribution channels or between an insurer and members of its distribution
channel
Channel cannibalism new channel steals customers from existing channel instead of getting new
customers
Suitability looking at if product is right for applicant based on their needs and finances
Best interest standard legal requirement that considers consumer's interest, not interest of financial
institution/professional
