C16 Business of Insurance -Practice
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Describe blockchain and identify how it could be utilized in the
insurance industry. - CORRECT ANSWER -blockchain is a platform that
enables distributed ledger technology, where transactions and data
about those transactions is permanently recorded in a chain of blocks in
a way that it cannot be erased or tampered with. they can be public or
private, and transactions are handled using smart contracts that are
self-executing using an oracle that confirm the contract terms are met
and effect payment. This technology can be of use in insurance in order
to streamline and improve the trust between parties:
1. can be used to rapidly independently establish customer identity
2. can improve underwriting processes, by centralizing and validating
risk data, helping insurers with risk modelling and assessment
3. Can streamline and improve the reliability of claims processes by
allowing swift automatic validation of loss and processing of payment,
even the reporting of a loss can happen automatically.
4. Combating insurance fraud--it can identify false identities,
damage/injury reports. it can make it easier to detect multiple claims.
shared claims on the blockchain can be verified.
,5. Reinsurance is heavily data reliant and that data flows from insurer to
intermediary to reinsurer, with validation and reconciliation and
multiple entry points. blockchain could reduce costs and speed up
transactions.
6. Micro insurance, for low premiums and limited coverage in
developing nations, block chain can help confirm identity and minimize
policy and claim servicing costs and expenses in providing this type of
insurance.
7. Parametric insurance, blockchain can be used to validate when an
event meets the policy parameters, and then issue payment.
8. Real-time insurance, or usage based insurance that is responsive to
changing needs, such as insurance for intermittent or varying use of
property, where coverage is provided as needed, such as an A
Explain the due diligence process that insurers use when selecting
producers. - CORRECT ANSWER -In deciding which producer to do
business with, an insurer analyzes each potential candidate based on a
number of criteria, which usually include:
1. Network analysis--an examination of premium volume, average
account size, loss ratio, and profitability by answering such questions as,
a. is the producer aggressively looking to expand? b. is there room for it
to grow? c. Can it sell the insurers range of products? d. what is the
producer's mix of business? e. will there be support and collaboration
from the producer? f. what are the human resources practices of the
producer? well trained?engaged? g. are customers loyal and why? h.
, can the insurer have contact with the client in order to build a
relationship? i. can the producer support binding authority or
underwriting authority, etc?
2. Ownership: determining whether there insurer interest, and will that
create a conflict? Who has controlling interest and with they intervene
in management of the producer? Are there non-insurance owners who
do not understand the dynamics of insurance? Is it a branch or
subsidiary? Does the producer have significant obligations to the owner
that may create a conflict? Has it recently sold, and will new owners
change how it is run?
3. Financial Analysis: does producer have a strong capital base to
weather ups and downs and be a long term partner? does the producer
have higher than usual expenses? A producer who can generate a
healthy profit will improve sustainability.
4. Business plan, how has the producer grown in the past? Do they have
solid plans to grow in the future in a way that aligns with the insurer's
growth plans, and can it appropriately handle the growth? Can their
organizational structure easily by scaled up to handle the growth?
5. Business processes, are they efficient and do they effectively balance
authority structure an
A formally adopted statement of applied ethics is also known as what -
CORRECT ANSWER -Code of conduct: A code of conduct is a formally
adopted statement of applied ethics that has formally declares the
operating values and principles of the organization.
Exam Questions And 100% Verified
Answers Latest 2026 Update | Graded
A+ | 100% Success
Describe blockchain and identify how it could be utilized in the
insurance industry. - CORRECT ANSWER -blockchain is a platform that
enables distributed ledger technology, where transactions and data
about those transactions is permanently recorded in a chain of blocks in
a way that it cannot be erased or tampered with. they can be public or
private, and transactions are handled using smart contracts that are
self-executing using an oracle that confirm the contract terms are met
and effect payment. This technology can be of use in insurance in order
to streamline and improve the trust between parties:
1. can be used to rapidly independently establish customer identity
2. can improve underwriting processes, by centralizing and validating
risk data, helping insurers with risk modelling and assessment
3. Can streamline and improve the reliability of claims processes by
allowing swift automatic validation of loss and processing of payment,
even the reporting of a loss can happen automatically.
4. Combating insurance fraud--it can identify false identities,
damage/injury reports. it can make it easier to detect multiple claims.
shared claims on the blockchain can be verified.
,5. Reinsurance is heavily data reliant and that data flows from insurer to
intermediary to reinsurer, with validation and reconciliation and
multiple entry points. blockchain could reduce costs and speed up
transactions.
6. Micro insurance, for low premiums and limited coverage in
developing nations, block chain can help confirm identity and minimize
policy and claim servicing costs and expenses in providing this type of
insurance.
7. Parametric insurance, blockchain can be used to validate when an
event meets the policy parameters, and then issue payment.
8. Real-time insurance, or usage based insurance that is responsive to
changing needs, such as insurance for intermittent or varying use of
property, where coverage is provided as needed, such as an A
Explain the due diligence process that insurers use when selecting
producers. - CORRECT ANSWER -In deciding which producer to do
business with, an insurer analyzes each potential candidate based on a
number of criteria, which usually include:
1. Network analysis--an examination of premium volume, average
account size, loss ratio, and profitability by answering such questions as,
a. is the producer aggressively looking to expand? b. is there room for it
to grow? c. Can it sell the insurers range of products? d. what is the
producer's mix of business? e. will there be support and collaboration
from the producer? f. what are the human resources practices of the
producer? well trained?engaged? g. are customers loyal and why? h.
, can the insurer have contact with the client in order to build a
relationship? i. can the producer support binding authority or
underwriting authority, etc?
2. Ownership: determining whether there insurer interest, and will that
create a conflict? Who has controlling interest and with they intervene
in management of the producer? Are there non-insurance owners who
do not understand the dynamics of insurance? Is it a branch or
subsidiary? Does the producer have significant obligations to the owner
that may create a conflict? Has it recently sold, and will new owners
change how it is run?
3. Financial Analysis: does producer have a strong capital base to
weather ups and downs and be a long term partner? does the producer
have higher than usual expenses? A producer who can generate a
healthy profit will improve sustainability.
4. Business plan, how has the producer grown in the past? Do they have
solid plans to grow in the future in a way that aligns with the insurer's
growth plans, and can it appropriately handle the growth? Can their
organizational structure easily by scaled up to handle the growth?
5. Business processes, are they efficient and do they effectively balance
authority structure an
A formally adopted statement of applied ethics is also known as what -
CORRECT ANSWER -Code of conduct: A code of conduct is a formally
adopted statement of applied ethics that has formally declares the
operating values and principles of the organization.
