CISR AGENCY OPERATIONS FULL
REVISED EXAM QUESTIONS WITH
VERIFIED ANSWERS
Which one of the following best describes actual authority? - Correct Answers -When the
agency is expressly given authority in the agency contract
Which one of the following statements best describes the standard of care an insurance agency
owes an insurance company? - Correct Answers -Loyalty, good faith, reasonable care and
contractual duties
Which one of the following is not one of the four benefits of ethical behavior? - Correct Answers
-thical behavior encourages governmental regulation
Which one of the following best describes a contract? - Correct Answers -Oral or written
agreements between two parties that creates an obligation to do or not do a particular thing
Which one of the following statements best describes agency stakeholders? - Correct Answers -
The primary stakeholders are any group or individual who is affected by the achievement of a
firm's objective
Which one of the following sources of revenue for insurance agencies is typically the largest
source of income for the insurance agency? - Correct Answers -Commission
Which one of the following statements best describes how an agency operates? - Correct
Answers -A larger number of locations may mean that some features of the agency be
centralized
Which one of the following is not one of the four major classes of exposure to loss? - Correct
Answers -Loss of use
, Insurance brokers, who act on behalf of the buyer/client, differ from agents in what way? -
Correct Answers -Brokers do not have binding authority
The best definition of active retention is: - Correct Answers -The customer knows before the loss
that he/she is financially responsible for all or part of the loss
Which one of the following statements regarding the process of identifying loss exposures is
correct? - Correct Answers -A document review of the policy is not the best method because it
shows the limits, but not the risks
Which one of the following best describes the risk management process? - Correct Answers -
Risk identification, risk analysis, risk control, risk finance, risk administration
The primary reason for the regulation of insurance companies is: - Correct Answers -To protect
insurance consumers
Which one of the following statements regarding alternative markets is correct? - Correct
Answers -Agents do not typically have binding authority in alternative markets
Which one of the following statements concerning non-admitted insurance companies is
correct? - Correct Answers -Non-admitted insurance companies can only be accessed by an
excess/surplus lines broker
The Managing General Agent (or Agency) can best be described as representing: - Correct
Answers -One or more insurance companies
A process involving the transfer of risk from one insurer call the ceding (or primary) company, to
another called the reinsure - Correct Answers -Reinsurance
REVISED EXAM QUESTIONS WITH
VERIFIED ANSWERS
Which one of the following best describes actual authority? - Correct Answers -When the
agency is expressly given authority in the agency contract
Which one of the following statements best describes the standard of care an insurance agency
owes an insurance company? - Correct Answers -Loyalty, good faith, reasonable care and
contractual duties
Which one of the following is not one of the four benefits of ethical behavior? - Correct Answers
-thical behavior encourages governmental regulation
Which one of the following best describes a contract? - Correct Answers -Oral or written
agreements between two parties that creates an obligation to do or not do a particular thing
Which one of the following statements best describes agency stakeholders? - Correct Answers -
The primary stakeholders are any group or individual who is affected by the achievement of a
firm's objective
Which one of the following sources of revenue for insurance agencies is typically the largest
source of income for the insurance agency? - Correct Answers -Commission
Which one of the following statements best describes how an agency operates? - Correct
Answers -A larger number of locations may mean that some features of the agency be
centralized
Which one of the following is not one of the four major classes of exposure to loss? - Correct
Answers -Loss of use
, Insurance brokers, who act on behalf of the buyer/client, differ from agents in what way? -
Correct Answers -Brokers do not have binding authority
The best definition of active retention is: - Correct Answers -The customer knows before the loss
that he/she is financially responsible for all or part of the loss
Which one of the following statements regarding the process of identifying loss exposures is
correct? - Correct Answers -A document review of the policy is not the best method because it
shows the limits, but not the risks
Which one of the following best describes the risk management process? - Correct Answers -
Risk identification, risk analysis, risk control, risk finance, risk administration
The primary reason for the regulation of insurance companies is: - Correct Answers -To protect
insurance consumers
Which one of the following statements regarding alternative markets is correct? - Correct
Answers -Agents do not typically have binding authority in alternative markets
Which one of the following statements concerning non-admitted insurance companies is
correct? - Correct Answers -Non-admitted insurance companies can only be accessed by an
excess/surplus lines broker
The Managing General Agent (or Agency) can best be described as representing: - Correct
Answers -One or more insurance companies
A process involving the transfer of risk from one insurer call the ceding (or primary) company, to
another called the reinsure - Correct Answers -Reinsurance
