C16 - Business of Insurance -
Chapter 2 Questions & Verified
Answers
What is the role of insurance? - correct answer ✔✔- To provide peace of mind
- To offer financial security
- To encourage loss prevention
Insurance brings focus to the role of risk management.
What factors affect the selection of an organization structure? - correct answer ✔✔There are
two organization structure types:
- Pyramid Structure
- Flat Structure
Selection of an organization structure depend on:
- How power & control are distributed
- How well systems are integrated between departments
- How communication works
- How well services are coordinated
- The size of the company
Compare and Contrast : Pyramid Structure vs. Flat Structure - correct answer ✔✔A Pyramid
Structure offers opportunities for promotion, but the drawback is the process to gain approval
,from hierarchal levels is very time-consuming ; This is because of the top-down nature of the
structure.
A Flat Structure on the other hand has little opportunity for promotion, but in contrast to
Pyramid Structure has a team to make approvals and decisions ; This is because there is no need
to escalate requests up a chain vs. a team making a decision.
What are the key areas within an organizational structure? - correct answer ✔✔- Human
Resources
- Information Technology
- Administration
- Marketing
- Finance & Accounting
3 Unique Areas within Insurance Companies :
- Actuarial
- Underwriting
- Claims
Describe the responsibilities of Human Resources? - correct answer ✔✔Hiring new staff with
appropriate skill sets
- Advertising positions
- Working with recruitment firms
- Short-Listing candidates
Assisting Management
- Performance reviews with the manager
- Designing training, education, and development programs
, Employee Services
- Keeping records
- Designing employee benefits programs
Financial upkeep
- Overseeing payroll
- Administering company pension plan & compliance with government pension laws &
guidelines
Monitoring Regulations & managing Policies & Guidelines
- Humans rights laws are followed
- Developing & Surveying each department is being run properly
What is Span of Control? - correct answer ✔✔Principle assets that limiting the number of
employees reporting to an individual improves organizational performance.
ie. 30 staff to one supervisor ; 10 supervisors to one manager.
Describe the responsibilities of a Information Technology Department? - correct answer
✔✔Responsible for handling computer systems and managing information.
- IT can be centralized in HO or spread across branch offices.
- To provide technical assistance, or provide assistance via external source
- To keep up with competition and technological changes
- Maintaining the systems that collect and process information : automate rating, underwriting,
and policy issuance.
Chapter 2 Questions & Verified
Answers
What is the role of insurance? - correct answer ✔✔- To provide peace of mind
- To offer financial security
- To encourage loss prevention
Insurance brings focus to the role of risk management.
What factors affect the selection of an organization structure? - correct answer ✔✔There are
two organization structure types:
- Pyramid Structure
- Flat Structure
Selection of an organization structure depend on:
- How power & control are distributed
- How well systems are integrated between departments
- How communication works
- How well services are coordinated
- The size of the company
Compare and Contrast : Pyramid Structure vs. Flat Structure - correct answer ✔✔A Pyramid
Structure offers opportunities for promotion, but the drawback is the process to gain approval
,from hierarchal levels is very time-consuming ; This is because of the top-down nature of the
structure.
A Flat Structure on the other hand has little opportunity for promotion, but in contrast to
Pyramid Structure has a team to make approvals and decisions ; This is because there is no need
to escalate requests up a chain vs. a team making a decision.
What are the key areas within an organizational structure? - correct answer ✔✔- Human
Resources
- Information Technology
- Administration
- Marketing
- Finance & Accounting
3 Unique Areas within Insurance Companies :
- Actuarial
- Underwriting
- Claims
Describe the responsibilities of Human Resources? - correct answer ✔✔Hiring new staff with
appropriate skill sets
- Advertising positions
- Working with recruitment firms
- Short-Listing candidates
Assisting Management
- Performance reviews with the manager
- Designing training, education, and development programs
, Employee Services
- Keeping records
- Designing employee benefits programs
Financial upkeep
- Overseeing payroll
- Administering company pension plan & compliance with government pension laws &
guidelines
Monitoring Regulations & managing Policies & Guidelines
- Humans rights laws are followed
- Developing & Surveying each department is being run properly
What is Span of Control? - correct answer ✔✔Principle assets that limiting the number of
employees reporting to an individual improves organizational performance.
ie. 30 staff to one supervisor ; 10 supervisors to one manager.
Describe the responsibilities of a Information Technology Department? - correct answer
✔✔Responsible for handling computer systems and managing information.
- IT can be centralized in HO or spread across branch offices.
- To provide technical assistance, or provide assistance via external source
- To keep up with competition and technological changes
- Maintaining the systems that collect and process information : automate rating, underwriting,
and policy issuance.
