CISR AGENCY OPERATIONS REVISION TEST UPDATED
QUESTIONS AND ANSWERS GRADED A+
✔✔SMART goals (what does that stand for) - ✔✔S - Specific
M - Measurable
A - Attainable
R - Relevant
T - Time-based
✔✔Agency brand - ✔✔A summary of the agency's values, vision, and mission
statements expressed in both the marketplace and community, demonstrating how they
differ from competition
✔✔Building the agency's brand includes what? - ✔✔Determining its target market(s),
positioning its products and areas of specialization, and defining its personality
✔✔Agency culture - ✔✔The behaviors and attitudes of the organization and its
employees
✔✔Priorities when maintaining a strong workforce (3) - ✔✔Connection, collaboration,
communication
✔✔Why is it important for an agency to have values/vision/mission statements? - ✔✔To
understand the strategic direction of the insurance agency and why it exists. Helps
define the expectations for the agency's employees and distinguish the agency from its
competition; setting the culture.
✔✔4 categories agency revenue typically falls into - ✔✔1. commission
2. fee-based services
3. contingent/profit-sharing
4. investment income
✔✔Insurance agent - ✔✔If the insurance coverage is being written with an insurance
company for which the individual has a contract, he/she is acting as an agent,
representing the company
✔✔Insurance broker - ✔✔An agent who doesn't have a contract with an insurance
company, representing the customer in the transaction
✔✔Stakeholder - ✔✔A person who has the potential to be impacted by any action taken
by the organization
✔✔Why is insurance highly regulated? - ✔✔To protect the consumer; to maintain
insurer solvency and prevent destructive competition
, ✔✔The McCarran-Ferguson Act - ✔✔Returned insurance regulation to the states
✔✔Insurance regulations consist of _________ - ✔✔mostly state laws and other
regulations regarding the solvency and markets of insurance companies
✔✔Solvency regulations seek to ________ - ✔✔mitigate the risk of loss to businesses
and individuals should an insurer become insolvent. Protects the consumer against the
risk that the insurance company would be unable to meet their financial obligations.
✔✔Market regulations seek to ________ - ✔✔ensure fair treatment of policyholders in
ensuring they're charged fair and reasonable insurance prices
✔✔Regulation monitors ________ - ✔✔insurance rates and determines if they're high
enough to prevent destructive competition. Also seeks to ensure consumers have
access to beneficial and compliant insurance products and are protected against
insurers that fail to operate in ways that are legal and fair to consumers.
✔✔Insurance company ownership classifications - ✔✔1. stock company
2. mutual company
3. reciprocal exchange company
✔✔Stock company - ✔✔Owned by its stockholders and operates with the goal of
making a profit for those stockholders
✔✔Mutual company - ✔✔Owned by the policyholders (no stockholders) and the goal is
to provide insurance at or near the actual cost of doing business
✔✔In a mutual company, at the end of the year if there's money left over in the form of
profits or surplus, what happens to it? - ✔✔It can be returned to the policyholders as a
dividend or used to reduce future premiums
✔✔What is done with profits in a stock company at the end of a defined period? -
✔✔They can be shared with stockholders in the form of stock dividends or increase in
stock value (or both)
✔✔Reciprocal exchange company - ✔✔Groups of individuals or organizations (called
subscribers) who join together into an association for the purpose of insuring one
another and are managed by an attorney-in-fact.
✔✔Many reciprocals specialize in _______ - ✔✔one line of insurance and/or a specific
niche
✔✔Subscribers - ✔✔Groups of individuals or organizations in a reciprocal exchange
company
QUESTIONS AND ANSWERS GRADED A+
✔✔SMART goals (what does that stand for) - ✔✔S - Specific
M - Measurable
A - Attainable
R - Relevant
T - Time-based
✔✔Agency brand - ✔✔A summary of the agency's values, vision, and mission
statements expressed in both the marketplace and community, demonstrating how they
differ from competition
✔✔Building the agency's brand includes what? - ✔✔Determining its target market(s),
positioning its products and areas of specialization, and defining its personality
✔✔Agency culture - ✔✔The behaviors and attitudes of the organization and its
employees
✔✔Priorities when maintaining a strong workforce (3) - ✔✔Connection, collaboration,
communication
✔✔Why is it important for an agency to have values/vision/mission statements? - ✔✔To
understand the strategic direction of the insurance agency and why it exists. Helps
define the expectations for the agency's employees and distinguish the agency from its
competition; setting the culture.
✔✔4 categories agency revenue typically falls into - ✔✔1. commission
2. fee-based services
3. contingent/profit-sharing
4. investment income
✔✔Insurance agent - ✔✔If the insurance coverage is being written with an insurance
company for which the individual has a contract, he/she is acting as an agent,
representing the company
✔✔Insurance broker - ✔✔An agent who doesn't have a contract with an insurance
company, representing the customer in the transaction
✔✔Stakeholder - ✔✔A person who has the potential to be impacted by any action taken
by the organization
✔✔Why is insurance highly regulated? - ✔✔To protect the consumer; to maintain
insurer solvency and prevent destructive competition
, ✔✔The McCarran-Ferguson Act - ✔✔Returned insurance regulation to the states
✔✔Insurance regulations consist of _________ - ✔✔mostly state laws and other
regulations regarding the solvency and markets of insurance companies
✔✔Solvency regulations seek to ________ - ✔✔mitigate the risk of loss to businesses
and individuals should an insurer become insolvent. Protects the consumer against the
risk that the insurance company would be unable to meet their financial obligations.
✔✔Market regulations seek to ________ - ✔✔ensure fair treatment of policyholders in
ensuring they're charged fair and reasonable insurance prices
✔✔Regulation monitors ________ - ✔✔insurance rates and determines if they're high
enough to prevent destructive competition. Also seeks to ensure consumers have
access to beneficial and compliant insurance products and are protected against
insurers that fail to operate in ways that are legal and fair to consumers.
✔✔Insurance company ownership classifications - ✔✔1. stock company
2. mutual company
3. reciprocal exchange company
✔✔Stock company - ✔✔Owned by its stockholders and operates with the goal of
making a profit for those stockholders
✔✔Mutual company - ✔✔Owned by the policyholders (no stockholders) and the goal is
to provide insurance at or near the actual cost of doing business
✔✔In a mutual company, at the end of the year if there's money left over in the form of
profits or surplus, what happens to it? - ✔✔It can be returned to the policyholders as a
dividend or used to reduce future premiums
✔✔What is done with profits in a stock company at the end of a defined period? -
✔✔They can be shared with stockholders in the form of stock dividends or increase in
stock value (or both)
✔✔Reciprocal exchange company - ✔✔Groups of individuals or organizations (called
subscribers) who join together into an association for the purpose of insuring one
another and are managed by an attorney-in-fact.
✔✔Many reciprocals specialize in _______ - ✔✔one line of insurance and/or a specific
niche
✔✔Subscribers - ✔✔Groups of individuals or organizations in a reciprocal exchange
company
