CIC Agency Management questions with verified
answers
Agency cash flow Ans✓✓✓ Commissions in - cash out for expenses
Agency expectations of a company Ans✓✓✓ Product value, stability,
claim handling, competitive commission schedule, profit sharing
agreement
Agency planning process Ans✓✓✓ Description of what the agency
wants to accomplish, analysis of agency's current state in relation to its
goals, steps the agency will take to reach goals
Agency risk management Ans✓✓✓ 1. Risk identification -lack of
knowledge
2. Risk analysis - qualitative : what type of risk? Quantitative - how
much risk do you have?
3. Risk control - Avoidance -types of clients, lines of coverage,
Prevention - procedures, audits, training
4. Risk finance - risk retention - E&O deductible, risk transfer -
company/agent agreement, insurance
5. Risk admin - implement techniques & monitor results
Agent authorities Ans✓✓✓ Actual or express authority - definite
authority granted in writing by company
, Implied authority - not in writing but allows agent to perform usual and
necessary tasks
Apparent authority - the authority that a person dealing with the agent
reasonably supposed the agent to have
Non-existent authority -none
Benefits of agency planning Ans✓✓✓ Operating efficiencies, agency
value, communication, road map, a focus on the goals
Benefits of an effective & productive agency Ans✓✓✓ 1. Improved
retention
2. Reduction in redundancies
3. Reduced expenses
4. Refocused energy
5. Positioned for the future
Causes of loss that can create agent liability Ans✓✓✓ Claims against
agent by insureds - failure to procure coverage, failure to renew or
maintain
Claims against agent by insurer - failure to supply info, misrepresenting
the risk
Liability of agent to state - licensing requirements, rebating, deceptive
trade practices
answers
Agency cash flow Ans✓✓✓ Commissions in - cash out for expenses
Agency expectations of a company Ans✓✓✓ Product value, stability,
claim handling, competitive commission schedule, profit sharing
agreement
Agency planning process Ans✓✓✓ Description of what the agency
wants to accomplish, analysis of agency's current state in relation to its
goals, steps the agency will take to reach goals
Agency risk management Ans✓✓✓ 1. Risk identification -lack of
knowledge
2. Risk analysis - qualitative : what type of risk? Quantitative - how
much risk do you have?
3. Risk control - Avoidance -types of clients, lines of coverage,
Prevention - procedures, audits, training
4. Risk finance - risk retention - E&O deductible, risk transfer -
company/agent agreement, insurance
5. Risk admin - implement techniques & monitor results
Agent authorities Ans✓✓✓ Actual or express authority - definite
authority granted in writing by company
, Implied authority - not in writing but allows agent to perform usual and
necessary tasks
Apparent authority - the authority that a person dealing with the agent
reasonably supposed the agent to have
Non-existent authority -none
Benefits of agency planning Ans✓✓✓ Operating efficiencies, agency
value, communication, road map, a focus on the goals
Benefits of an effective & productive agency Ans✓✓✓ 1. Improved
retention
2. Reduction in redundancies
3. Reduced expenses
4. Refocused energy
5. Positioned for the future
Causes of loss that can create agent liability Ans✓✓✓ Claims against
agent by insureds - failure to procure coverage, failure to renew or
maintain
Claims against agent by insurer - failure to supply info, misrepresenting
the risk
Liability of agent to state - licensing requirements, rebating, deceptive
trade practices
