CISR AGENCY OPERATIONS EXAM
WITH COMPLETE SOLUTIONS
Two ways insurance agencies can monitor their companies - Answer- 1. Check with the
appropriate state or jurisdiction's insurance department to see if they have taken any
action as the result of the company's financial condition.
2. Check with rating organizations that can provide information about the financial
stability of a specific company
Admitted Insurance companies - Answer- the standard market which have been
licensed by the state. Their forms rules and rates and regulated and their financial
condition is monitored by the insurance departments of the states in which they are
licensed or domiciled
Guaranty Fund - Answer- protects business written and will step in to make payments
on claims as necessary
Six Steps to Ethical Decision Making - Answer- 1. Define the Problem
2. Seek Out Resources
3. Brainstorm a List of Potential Solutions
4. Evaluate those Alternatives
5. Make Your Decision and Implement It
6. Evaluate the Decision
Unethical Decision effects on the Agency's Profitability - Answer- Incorrect Rating =
Unprofitable Agency
Legal Duties are based on Three Criteria - Answer- Peer Standards
Oral and Written Agreements
Statues
Peer Standards - Answer- require a person's duties be performed in a manner similar to
others in the same position.
Not typically written, but rather associated with generally accepted practice in a specific
field
Common Claims brought against Agents by Insureds - Answer- Failure to Obtain Proper
Coverage
Failure to place coverage after binding it
Failure to give proper advice
,Failure to promptly advise insured of rejection or lack of Coverage
Failure to maintain or renew coverage
Failure to service Policies
Failure to place coverage on best terms and conditions available
Misrepresentation of Facts
Placing coverage with an insolvent insurer or unauthorized insurer
Modifying established service to customers
Making a Clerical Error
Common causes of Claims brought against Agents by Insurance Companies - Answer-
Exceeding Binding Authority
Failure to properly Process a claim
Failure to notify carrier of Material Change in Risk
Misrepresenting the risk to the carrier
Professional - Answer- an adjective used to describe appearance, attitude, or actions
Acting Ethically and Professionally - Answer- you put the needs of your clients above
your own
Ethics - Answer- a system or set of moral principles or practice
a set of rules or standards based on a set of principles or values we accept as truths
and that govern our behavior
Factors that influence ethics - Answer- Friends, Society, Media, Belief Systems,
Educational Institution, Legal Restraints, Family
Benefits of Being Ethical - Answer- 1. Public Trust and Confidence Gained
2. Government regulation avoided
3. Enhanced Credibility Earned
Public Trust and Confidence Gained - Answer- it is difficult to criticize that person's
behavior or motives
Government Regulation Avoided - Answer- acting in an ethical manner avoids this
Enhanced Credibility Earned - Answer- it allows people to regard you and your business
as a reliable and trusted resource
Conducting Business in an Unethical Manner - Answer- always puts the customer
secondary
Examples of Bending the Rules in Insurance - Answer- Vehicle Usage
Protection Class
Property Values
Other Residents in the Household
, Young drivers in the household
Rate Basis, Classification, or Garaging Address
Signing for an insured
Contemplating the Ethical Response - Answer- Ask questions to clear blurey lines in
situations
Contracts (Oral and Written Agreements) - Answer- an agreement between two or more
parties wich creates an obligation to do or to not do something
Statues - Answer- written laws open to little interpretation
Actual or Expressed Authourity - Answer- expressly given to the agency by the
insurance company. It is granted in the agency contract (agreement).
Implied Authority - Answer- describes a situation in which the authority of the agent is
not specifically expressed or communicated, but it still is consistent with the agent fully
exercising the expressed authority granted by the company
Apparent Authority - Answer- authority the agent appears to have based on
circumstances surrounding that belief. Insurance agencies can be held legally liable
under apparent authority for things that are not expressed
Estoppel - Answer- the principle which prevents a person from asserting something
contrary to what is implied by a previous action or statement of that person or by a
previous pertinent judicial determination.
The insurance company is stopped from denying the agent's authority when it has
allowed that same activity in the past without taking any corrective action
No Authority - Answer- Agency cannot generate a quote or conduct business tin that
insurance company
Care owed to their Insurance Companies - Answer- Loyalty
Good faith
Reasonable Care
Contractual Duties
Loyalty - Answer- Act for the benefit of the insurance company regarding matters
associated with the agency contract
Good Faith - Answer- Being honest throughout the entire insurance transaction and
acting in the best interest of the insurance company
Reasonable Care - Answer- When one exercises care and concern for the safety of his
or herself and others regarding business conducted with the insurance company
WITH COMPLETE SOLUTIONS
Two ways insurance agencies can monitor their companies - Answer- 1. Check with the
appropriate state or jurisdiction's insurance department to see if they have taken any
action as the result of the company's financial condition.
2. Check with rating organizations that can provide information about the financial
stability of a specific company
Admitted Insurance companies - Answer- the standard market which have been
licensed by the state. Their forms rules and rates and regulated and their financial
condition is monitored by the insurance departments of the states in which they are
licensed or domiciled
Guaranty Fund - Answer- protects business written and will step in to make payments
on claims as necessary
Six Steps to Ethical Decision Making - Answer- 1. Define the Problem
2. Seek Out Resources
3. Brainstorm a List of Potential Solutions
4. Evaluate those Alternatives
5. Make Your Decision and Implement It
6. Evaluate the Decision
Unethical Decision effects on the Agency's Profitability - Answer- Incorrect Rating =
Unprofitable Agency
Legal Duties are based on Three Criteria - Answer- Peer Standards
Oral and Written Agreements
Statues
Peer Standards - Answer- require a person's duties be performed in a manner similar to
others in the same position.
Not typically written, but rather associated with generally accepted practice in a specific
field
Common Claims brought against Agents by Insureds - Answer- Failure to Obtain Proper
Coverage
Failure to place coverage after binding it
Failure to give proper advice
,Failure to promptly advise insured of rejection or lack of Coverage
Failure to maintain or renew coverage
Failure to service Policies
Failure to place coverage on best terms and conditions available
Misrepresentation of Facts
Placing coverage with an insolvent insurer or unauthorized insurer
Modifying established service to customers
Making a Clerical Error
Common causes of Claims brought against Agents by Insurance Companies - Answer-
Exceeding Binding Authority
Failure to properly Process a claim
Failure to notify carrier of Material Change in Risk
Misrepresenting the risk to the carrier
Professional - Answer- an adjective used to describe appearance, attitude, or actions
Acting Ethically and Professionally - Answer- you put the needs of your clients above
your own
Ethics - Answer- a system or set of moral principles or practice
a set of rules or standards based on a set of principles or values we accept as truths
and that govern our behavior
Factors that influence ethics - Answer- Friends, Society, Media, Belief Systems,
Educational Institution, Legal Restraints, Family
Benefits of Being Ethical - Answer- 1. Public Trust and Confidence Gained
2. Government regulation avoided
3. Enhanced Credibility Earned
Public Trust and Confidence Gained - Answer- it is difficult to criticize that person's
behavior or motives
Government Regulation Avoided - Answer- acting in an ethical manner avoids this
Enhanced Credibility Earned - Answer- it allows people to regard you and your business
as a reliable and trusted resource
Conducting Business in an Unethical Manner - Answer- always puts the customer
secondary
Examples of Bending the Rules in Insurance - Answer- Vehicle Usage
Protection Class
Property Values
Other Residents in the Household
, Young drivers in the household
Rate Basis, Classification, or Garaging Address
Signing for an insured
Contemplating the Ethical Response - Answer- Ask questions to clear blurey lines in
situations
Contracts (Oral and Written Agreements) - Answer- an agreement between two or more
parties wich creates an obligation to do or to not do something
Statues - Answer- written laws open to little interpretation
Actual or Expressed Authourity - Answer- expressly given to the agency by the
insurance company. It is granted in the agency contract (agreement).
Implied Authority - Answer- describes a situation in which the authority of the agent is
not specifically expressed or communicated, but it still is consistent with the agent fully
exercising the expressed authority granted by the company
Apparent Authority - Answer- authority the agent appears to have based on
circumstances surrounding that belief. Insurance agencies can be held legally liable
under apparent authority for things that are not expressed
Estoppel - Answer- the principle which prevents a person from asserting something
contrary to what is implied by a previous action or statement of that person or by a
previous pertinent judicial determination.
The insurance company is stopped from denying the agent's authority when it has
allowed that same activity in the past without taking any corrective action
No Authority - Answer- Agency cannot generate a quote or conduct business tin that
insurance company
Care owed to their Insurance Companies - Answer- Loyalty
Good faith
Reasonable Care
Contractual Duties
Loyalty - Answer- Act for the benefit of the insurance company regarding matters
associated with the agency contract
Good Faith - Answer- Being honest throughout the entire insurance transaction and
acting in the best interest of the insurance company
Reasonable Care - Answer- When one exercises care and concern for the safety of his
or herself and others regarding business conducted with the insurance company
