CISR AGENCY OPERATIONS FINALS PAPER UPDATED
EXAM QUESTIONS AND ANSWERS GRADED A+
✔✔Explain the standard of care an agent owes its customers. - ✔✔Adequate Coverage,
Proper Coverage, Coverage placed in the best interest of the customer, Prompt
Communication, Coverage Placed with a financially sound insurance company.
✔✔Adequate coverage - ✔✔Providing adequate coverage means the agency helps the
customers determine the appropriate amount of property insurance to meet their needs;
explaining the benefits and/or advantages of adequate amount of insurance; and
identifying their exposures to loss and recommending the appropriate limits of coverage.
✔✔Proper coverage - ✔✔Before an agency can provide proper coverage for its
customers, the staff must first understand the differences in coverages among the
policies available from the insurance companies represented in the agency. It also
requires the agency to use available tools to identify customer's exposures to loss.
Finally, it means the agency staff must keep current with changes and innovations in the
insurance marketplace.
✔✔Coverage placed in the best interest of the customer - ✔✔This requires the
insurance agency to place coverage on the best possible terms for the customer. This
doesn't mean the lowest cost; it means the best coverage for the customer based on the
specific needs of that customer.
✔✔Prompt communication - ✔✔Promptly notify customers about all aspects of their
insurance transaction with the agency and includes, but is not limited to, changes,
exclusions, limitations, claims, cancellations, and non-renewals.
✔✔Coverage placed with a financially sound insurance company - ✔✔Taking care to
place coverage with an insurance company that is financially able to pay a claim. If an
agency obtains knowledge that a company is experiencing serious financial difficulty,
consideration should be given to moving the insurance coverage to a financial sound
insurance company. Signs of financial difficulty may include the insurance company's
delay in payment of claims, a high rate of declined claims, late payment of
commissions, or delay in returning of premiums.
✔✔Stakeholders of Insurance Agencies - ✔✔People who have the potential to be
affected by any action taken by an organization. Any group or individual who is affected
by the achievement of a firm's objectives.
✔✔Stakeholders of Insurance Agencies - ✔✔Board of directors
Managers and employees
Customers
Insurers
Vendors
, Industry associations
Government
✔✔Managers and employers - ✔✔Managers and employers benefit by continued job
security and the potential for increased wages or benefits.
✔✔Customers - ✔✔Customers benefit by having an agency that is financially stable
which may result in the stability of its products and customer service.
✔✔Insurers - ✔✔Insurers benefit from successful agencies as it means a continued
distribution source.
✔✔Vendors - ✔✔Vendors, such as providers of agency automation systems or
comparative rating systems will benefit either by the agencies keeping their existing
systems or spending available revenue to upgrade to a newer system.
✔✔Industry Associations - ✔✔Industry associations, such as agency associations and
user groups benefit from agencies successes, as those agencies are more likely to
continue their membership.
✔✔Government - ✔✔Government is negatively affected if an agency is having difficulty
as it may result in the agency's non-compliance with insurance regulations.
✔✔ Agency Characteristics - ✔✔Number of Employees, Locations, Areas of
Specialization, AMS used, Local, Regional, National, International Operations, Use of
Service Centers.
✔✔Small Agency - ✔✔Require staff to fill multiple roles.
✔✔Mid-Sized Agencies - ✔✔Staff may be split
✔✔Large agencies - ✔✔More Specialization in single lines.
✔✔single or multiple locations - ✔✔The number of locations will affect how an agency
communicates and informs. It may also mean that some functions of the agency may be
centralized.
✔✔Local, regional, national or international operation - ✔✔As with the number of
locations, where an agency conducts business affects how an agency communicates
and informs. Understanding cultural differences and the local economy becomes a
critical factor in the operations of an international agency.
✔✔Areas of Specialization: - ✔✔Specialization may require all employees to have a
higher level of training and skills in the type or types of business specialized in. The
EXAM QUESTIONS AND ANSWERS GRADED A+
✔✔Explain the standard of care an agent owes its customers. - ✔✔Adequate Coverage,
Proper Coverage, Coverage placed in the best interest of the customer, Prompt
Communication, Coverage Placed with a financially sound insurance company.
✔✔Adequate coverage - ✔✔Providing adequate coverage means the agency helps the
customers determine the appropriate amount of property insurance to meet their needs;
explaining the benefits and/or advantages of adequate amount of insurance; and
identifying their exposures to loss and recommending the appropriate limits of coverage.
✔✔Proper coverage - ✔✔Before an agency can provide proper coverage for its
customers, the staff must first understand the differences in coverages among the
policies available from the insurance companies represented in the agency. It also
requires the agency to use available tools to identify customer's exposures to loss.
Finally, it means the agency staff must keep current with changes and innovations in the
insurance marketplace.
✔✔Coverage placed in the best interest of the customer - ✔✔This requires the
insurance agency to place coverage on the best possible terms for the customer. This
doesn't mean the lowest cost; it means the best coverage for the customer based on the
specific needs of that customer.
✔✔Prompt communication - ✔✔Promptly notify customers about all aspects of their
insurance transaction with the agency and includes, but is not limited to, changes,
exclusions, limitations, claims, cancellations, and non-renewals.
✔✔Coverage placed with a financially sound insurance company - ✔✔Taking care to
place coverage with an insurance company that is financially able to pay a claim. If an
agency obtains knowledge that a company is experiencing serious financial difficulty,
consideration should be given to moving the insurance coverage to a financial sound
insurance company. Signs of financial difficulty may include the insurance company's
delay in payment of claims, a high rate of declined claims, late payment of
commissions, or delay in returning of premiums.
✔✔Stakeholders of Insurance Agencies - ✔✔People who have the potential to be
affected by any action taken by an organization. Any group or individual who is affected
by the achievement of a firm's objectives.
✔✔Stakeholders of Insurance Agencies - ✔✔Board of directors
Managers and employees
Customers
Insurers
Vendors
, Industry associations
Government
✔✔Managers and employers - ✔✔Managers and employers benefit by continued job
security and the potential for increased wages or benefits.
✔✔Customers - ✔✔Customers benefit by having an agency that is financially stable
which may result in the stability of its products and customer service.
✔✔Insurers - ✔✔Insurers benefit from successful agencies as it means a continued
distribution source.
✔✔Vendors - ✔✔Vendors, such as providers of agency automation systems or
comparative rating systems will benefit either by the agencies keeping their existing
systems or spending available revenue to upgrade to a newer system.
✔✔Industry Associations - ✔✔Industry associations, such as agency associations and
user groups benefit from agencies successes, as those agencies are more likely to
continue their membership.
✔✔Government - ✔✔Government is negatively affected if an agency is having difficulty
as it may result in the agency's non-compliance with insurance regulations.
✔✔ Agency Characteristics - ✔✔Number of Employees, Locations, Areas of
Specialization, AMS used, Local, Regional, National, International Operations, Use of
Service Centers.
✔✔Small Agency - ✔✔Require staff to fill multiple roles.
✔✔Mid-Sized Agencies - ✔✔Staff may be split
✔✔Large agencies - ✔✔More Specialization in single lines.
✔✔single or multiple locations - ✔✔The number of locations will affect how an agency
communicates and informs. It may also mean that some functions of the agency may be
centralized.
✔✔Local, regional, national or international operation - ✔✔As with the number of
locations, where an agency conducts business affects how an agency communicates
and informs. Understanding cultural differences and the local economy becomes a
critical factor in the operations of an international agency.
✔✔Areas of Specialization: - ✔✔Specialization may require all employees to have a
higher level of training and skills in the type or types of business specialized in. The
