CISR - Agency Operations Questions and Answers Solved Correctly

Professional - ✔✔ One engaged in an occupation requiring a high level of training and proficiency To be recognized as knowledgeable, gain public trust, avoid gov ernment regulation, enhance credibility - ✔✔ What are the benefits of being ethical? True - ✔✔ Is this example an ethical issue? Rating a vehicle using the wrong classification No - ✔✔ Are you allowed to sign for the insured even if the insured gave permiss ion? peer standards, Contracts (oral & written agreements), statutes - ✔✔ Legal duties are based on three criteria: Peer standards - ✔✔ This requires a person's duty be performed in a manner similar to others in the same position. They are not written. Contracts (oral and written agreements) - ✔✔ An agreement between two or more parties that creates an obligation to do or not to do a particular thing. Statutes - ✔✔ Written laws and open to little interpretation. Actual/Expressed Authority - ✔✔ Authority t hat is expressly given to the agency as found in the contract. Implied Authority - ✔✔ This authority the insurance company has allowed the agent to have the appearance of authority either through custom and usage or estoppel Estoppel - ✔✔ Company is stoppe d from denying the agent's authority when it has allowed the same activity in the past without taking any corrective action Apparent authority - ✔✔ The appearance or the assumption of authority based on the actions, words, or deeds of the principal or beca use of circumstances the principal created. Loyalty, good faith, reasonable care, contractual duties - ✔✔ What are the standards of care agents owe to their insurance companies? adequate coverage, proper coverage, coverage placed in best interest, prompt communication, coverage with financially sound company - ✔✔ What are the standards of care owed to the customers? Commission, fee based, profit sharing, investment income - ✔✔ Insurance agency revenue typically falls into these four categories: Comission - ✔✔ This is typically the largest source of income and is the percentage of the premium that the agency earns Fee based - ✔✔ Agencies may offer additional services for which they may be able to legally charge a fee (consulting, loss control) Contingent/Pro fit sharing - ✔✔ This is a bonus that insurance companies may pay to agencies to reward the agencies' growth Investment income - ✔✔ Generated from the investment of the agencies' assests Sales & service - ✔✔ Agencies divide their personnel into two major categories: Sales staff - ✔✔ Comprised of agents or brokers with the responsibility to identify prospects, make sales calls, determine prospects needs, present solutions and secure buying d ecision Broker - ✔✔ If the individual is placing insurance coverage with a company for which the individual does not have a contract, they are acting as a _______