CISR Agency Operations Study Guide 2026
Question and Answer | Final Review Pack |
Grade A+
• Types of Stakeholders -✓✓managers and employees
customers
insurers
vendors
industry associations
government
• Transfer -✓✓Insurance: transfer of financial consequence to an
insurance company
Non Insurance: when a customer transfers financial consequences to
another by contract or agreement
• Retention -✓✓Active: when a customer knows before the loss that
they are responsible for all or part of the loss
Passive: Whoops! when a client finds out after a loss occurs that they are
responsible
• What is NOT one of the four benefits of ethical behavior? -✓✓Ethical
behavior encourages governmental action
• Describe the standard of care an insurance agency owes to an insurance
company -✓✓loyalty
good faith
reasonable care
contractual duty
• Describe actual authority -✓✓when the agency is expressly given the
authority in the agency contract
,• Describe a contract -✓✓Oral or written agreements between two
parties that creates an obligation to do or not do a particular thing
• What are the four benefits of ethical behavior? -✓✓To be recognized
as a knowledgeable insurance professional within the community
To gain public trust and confidence
To avoid government regulation
To enhance credibility with customers and companies
• What is the risk management process? -✓✓Risk Identification
Risk analysis
Risk control
Risk finance
Risk administration
• Explain the five steps of risk management -✓✓Risk identification:
identify the customers exposure to loss
Risk analysis: determine frequency or severity of the exposure. How
much could a loss actually cost the customer
Risk control: understand what methods can be implemented to eliminate
or reduce cost associated with exposure
Risk finance: fund losses by user either internal or external dollars
Risk administration: Implement and monitor the customers risk
management program
• Stakeholders -✓✓People who have the potential to be affected by any
action taken by an organization. Any group or individual who is affected
by the achievements of a firm's objectives
• Risk Control Methods -✓✓Avoid: not always practical
Prevent: reduces frequency
Reduce: reduces severity
Segregation: includes separation or duplication
Transfer: can be physical transfer or contractual transfer
, • What is the difference between a broker and an agent/producer? -
✓✓Brokers do not have binding authority
• How would you best describe an agency stakeholder? -✓✓The
primary stakeholders are any group or individual who is affected by the
achievement of a firm's objective
• Which source of revenue is typically the largest source of income for
an insurance agency? -✓✓Commission
• What does a large number of locations mean for how an agency
operates? -✓✓It may mean some features of the agency are centralized
• List the four major classes of exposure to loss -✓✓Property
Human Resources
Liability
Net Income
• What are the methods of identifying loss exposures? -✓✓Interview
Checklist
Physical inspection
Activity analysis
Document review
Advertising/website
Flow charts
Loss history
Financial statements
• Why is insurance regulated? -✓✓To protect the consumer
Question and Answer | Final Review Pack |
Grade A+
• Types of Stakeholders -✓✓managers and employees
customers
insurers
vendors
industry associations
government
• Transfer -✓✓Insurance: transfer of financial consequence to an
insurance company
Non Insurance: when a customer transfers financial consequences to
another by contract or agreement
• Retention -✓✓Active: when a customer knows before the loss that
they are responsible for all or part of the loss
Passive: Whoops! when a client finds out after a loss occurs that they are
responsible
• What is NOT one of the four benefits of ethical behavior? -✓✓Ethical
behavior encourages governmental action
• Describe the standard of care an insurance agency owes to an insurance
company -✓✓loyalty
good faith
reasonable care
contractual duty
• Describe actual authority -✓✓when the agency is expressly given the
authority in the agency contract
,• Describe a contract -✓✓Oral or written agreements between two
parties that creates an obligation to do or not do a particular thing
• What are the four benefits of ethical behavior? -✓✓To be recognized
as a knowledgeable insurance professional within the community
To gain public trust and confidence
To avoid government regulation
To enhance credibility with customers and companies
• What is the risk management process? -✓✓Risk Identification
Risk analysis
Risk control
Risk finance
Risk administration
• Explain the five steps of risk management -✓✓Risk identification:
identify the customers exposure to loss
Risk analysis: determine frequency or severity of the exposure. How
much could a loss actually cost the customer
Risk control: understand what methods can be implemented to eliminate
or reduce cost associated with exposure
Risk finance: fund losses by user either internal or external dollars
Risk administration: Implement and monitor the customers risk
management program
• Stakeholders -✓✓People who have the potential to be affected by any
action taken by an organization. Any group or individual who is affected
by the achievements of a firm's objectives
• Risk Control Methods -✓✓Avoid: not always practical
Prevent: reduces frequency
Reduce: reduces severity
Segregation: includes separation or duplication
Transfer: can be physical transfer or contractual transfer
, • What is the difference between a broker and an agent/producer? -
✓✓Brokers do not have binding authority
• How would you best describe an agency stakeholder? -✓✓The
primary stakeholders are any group or individual who is affected by the
achievement of a firm's objective
• Which source of revenue is typically the largest source of income for
an insurance agency? -✓✓Commission
• What does a large number of locations mean for how an agency
operates? -✓✓It may mean some features of the agency are centralized
• List the four major classes of exposure to loss -✓✓Property
Human Resources
Liability
Net Income
• What are the methods of identifying loss exposures? -✓✓Interview
Checklist
Physical inspection
Activity analysis
Document review
Advertising/website
Flow charts
Loss history
Financial statements
• Why is insurance regulated? -✓✓To protect the consumer
