CISR - Agency Operations Exam Study Question with Verified Answers

CISR - Agency Operations Exam Study Question with Verified Answers 1. Factors that affect how an agency distributes its product and provides customer service - ANSWER a. # of employees b. Single or multiple locations c. Local, regional, international operation d. Areas of specialization e. Use of service centers 2. Agent/Producer - ANSWER Acts on behalf of insurance company 3. Broker - ANSWER Acts on behalf of the customer 4. 5-Step Risk Management Process - ANSWER a. Risk Identification (most important: an unknown exposure is unable to be analyzed, controlled or financed) b. Risk Analysis c. Risk Control d. Risk Finance e. Risk Administration 5. Four major classes of exposures - ANSWER Property 6. Four major classes of exposures - ANSWER Liability 7. Four major classes of exposures - ANSWER Loss of income/loss of use 8. Four major classes of exposures - ANSWER Human exposure 9. Risk identification methods - ANSWER Interview 10. Risk identification methods - ANSWER Checklist, survey, questionnaire 11. Risk identification methods - ANSWER Physical inspection 12. Risk identification methods - ANSWER Activity analysis 13. Risk identification methods - ANSWER Advertising/Website 14. Risk identification methods - ANSWER Document review 15. Risk Control Techniques: Avoidance - ANSWER Choose not to own certain property or engage in activity (not always practical) 16. Risk Control Techniques: Loss prevention - ANSWER Reduce frequency of loss occurring (alarm system, safety training) 17. Risk Control Techniques: Loss reduction - ANSWER Reduce severity (safety equipment, seat belt) 18. Risk Control Techniques: Duplication/Separation - ANSWER Reduces severity (Back up disks off site, parking fleet in separate lots) 19. Risk Control Techniques: Combination - ANSWER more than one technique 20. Active retention - ANSWER When customer knows before the loss that they are financially responsible for some or all of the loss 21. Passive retention - ANSWER When customer finds out after the loss that they are financially response (whoops) 22. Stakeholders of Insurance Agency - ANSWER a. Board of directors b. Managers and employees c. Customers d. Insurers e. Vendors f. Government g. Industry associations 23. How Insurance Companies are Regulated - ANSWER By states or jurisdictions where they do business 24. Other positions - ANSWER In addition to sales and service, positions in an agency may include administration and management as well as employees in accounting, claims, loss control or risk management departments. 25. Standard of care an agent owes its insurance companies - ANSWER Loyalty, Good Faith, Reasonable Care, Contractual Duties, 26. Loyalty - ANSWER Remaining faithful to the company/agency relationship 27. Good Faith - ANSWER Being honest throughout the entire insurance transaction and acting in the best interest of the insurance company. 28. Reasonable Care - ANSWER Using reasonable care in selecting the insureds that meet or exceed the insurance companies' underwriting requirements rather than submitting business that the agency knows does not qualify 29. Contractual Duties - ANSWER Staying within the authority as granted in the agency agreement. For example, staying within the insurance companies' binding authority with regard to both limits of coverage and types of coverage; or uploading policy information within the required time frame; or submitting the application, endorsement or binder within the required time frame. 30. agency agreement (also referred to as the agency contract) - ANSWER sets the foundation of the agency's relationship with the company. It defines duties and responsibilities of both parties as well as authorizing certain activities.