INS Practice

AINS Practice Exam Review | 91 Question with 100 % correct answers | Verified& Updated 2024 Graded A+ One distinguishing feature between independent agency systems and other marketing systems is the... - agency expiration list Foreign Insurer - An insurer licensed to operate in a state but incorporated in another state Domestic Insurer - An insurer doing business in the jurisdiction in which it was incorporated Alien Insurer - An insurer domiciled in a country other than the US Direct Response Marketing System - Greatly reduces compensation costs but has higher advertising costs Agency Expiration List - An agency's most valuable asset (does not belong to insurer) Important consideration when selecting distribution channels - Does the channel capitalize on its core capabilities? Knowledge acquired by the agent is presumed to be.. - knowledge acquired by the insurer Premium collection method used for personal insurance and small commercial accounts - Direct Bill What specifies scope of authority of an agent? - Agency contract Agency Bill - Payment procedure in which a producer sends premium bills to the insured, collects the premium, and sends the premium to the insurer, less any commission Item Basis - Premium (less commission) is forwarded to the insurer when the producer collects it or when it comes due. Least complex method Statement Basis - Insurer sends statement to the producer showing the premiums due. Producer is obligated to pay the premiums as due. Account Current Basis - Producer periodically prepares a statement showing the premiums due to the insurer, after deducting appropriate commissions, and transmits the amount to the insurer. The agency contract will indicate how often the producer must submit the account current statement (usually monthly). Producer must pay when premium is due, even if policyholder hasn't paid. Purposes of underwriting - Develop and maintain a book of business, guard against adverse selection, ensure adequate policyholder's surplus and enforce underwriting guidelines