CISR PACKAGE DEAL ACTUAL EXAMS QUESTIONS AND
CORRECT DETAILED ANSWERS|AGRADE
One engaged in an occupation requiring a high level of training and proficiency -
ANSWER: Professional
What are the benefits of being ethical? - ANSWER: To be recognized as
knowledgeable, gain public trust, avoid government regulation, enhance credibility
Is this example an ethical issue? Rating a vehicle using the wrong classification -
ANSWER: True
Are you allowed to sign for the insured even if the insured gave permission? -
ANSWER: No
Legal duties are based on three criteria: - ANSWER: peer standards, Contracts (oral &
written agreements), statutes
This requires a person's duty be performed in a manner similar to others in the same
position. They are not written. - ANSWER: Peer standards
An agreement between two or more parties that creates an obligation to do or not
to do a particular thing. - ANSWER: Contracts (oral and written agreements)
Written laws and open to little interpretation. - ANSWER: Statutes
Authority that is expressly given to the agency as found in the contract. - ANSWER:
Actual/Expressed Authority
This authority the insurance company has allowed the agent to have the appearance
of authority either through custom and usage or estoppel - ANSWER: Implied
Authority
Company is stopped from denying the agent's authority when it has allowed the
same activity in the past without taking any corrective action - ANSWER: Estoppel
The appearance or the assumption of authority based on the actions, words, or
deeds of the principal or because of circumstances the principal created. - ANSWER:
Apparent authority
What are the standards of care agents owe to their insurance companies? -
ANSWER: Loyalty, good faith, reasonable care, contractual duties
What are the standards of care owed to the customers? - ANSWER: adequate
coverage, proper coverage, coverage placed in best interest, prompt
communication, coverage with financially sound company
, Insurance agency revenue typically falls into these four categories: - ANSWER:
Commission, fee based, profit sharing, investment income
This is typically the largest source of income and is the percentage of the premium
that the agency earns - ANSWER: Comission
Agencies may offer additional services for which they may be able to legally charge a
fee (consulting, loss control) - ANSWER: Fee based
This is a bonus that insurance companies may pay to agencies to reward the
agencies' growth - ANSWER: Contingent/Profit sharing
Generated from the investment of the agencies' assests - ANSWER: Investment
income
Agencies divide their personnel into two major categories: - ANSWER: Sales & service
Comprised of agents or brokers with the responsibility to identify prospects, make
sales calls, determine prospects needs, present solutions and secure buying decision
- ANSWER: Sales staff
If the individual is placing insurance coverage with a company for which the
individual does not have a contract, they are acting as a _______ - ANSWER: Broker
If the individual is placing insurance coverage with a company for which the
individual has a contract, they are acting as a _______ - ANSWER: Agent
T/F. A broker does not have binding authority - ANSWER: True
Brokers act on behalf of the ______ - ANSWER: customer
Agents act on behalf of the _____ - ANSWER: insurance company
What is another name for an agent/broker - ANSWER: Producer
Agencies with few employees operate this way. Staff will report directly to the owner
- ANSWER: Horizontal structure
Larger agencies operate this way. Division of job functions and responsibilities are
well defined - ANSWER: Vertical structure
What are the steps of risk management? - ANSWER: Identification, analysis, control,
finance, administration
This is the most important step in the risk management process - ANSWER: Risk
Identification
CORRECT DETAILED ANSWERS|AGRADE
One engaged in an occupation requiring a high level of training and proficiency -
ANSWER: Professional
What are the benefits of being ethical? - ANSWER: To be recognized as
knowledgeable, gain public trust, avoid government regulation, enhance credibility
Is this example an ethical issue? Rating a vehicle using the wrong classification -
ANSWER: True
Are you allowed to sign for the insured even if the insured gave permission? -
ANSWER: No
Legal duties are based on three criteria: - ANSWER: peer standards, Contracts (oral &
written agreements), statutes
This requires a person's duty be performed in a manner similar to others in the same
position. They are not written. - ANSWER: Peer standards
An agreement between two or more parties that creates an obligation to do or not
to do a particular thing. - ANSWER: Contracts (oral and written agreements)
Written laws and open to little interpretation. - ANSWER: Statutes
Authority that is expressly given to the agency as found in the contract. - ANSWER:
Actual/Expressed Authority
This authority the insurance company has allowed the agent to have the appearance
of authority either through custom and usage or estoppel - ANSWER: Implied
Authority
Company is stopped from denying the agent's authority when it has allowed the
same activity in the past without taking any corrective action - ANSWER: Estoppel
The appearance or the assumption of authority based on the actions, words, or
deeds of the principal or because of circumstances the principal created. - ANSWER:
Apparent authority
What are the standards of care agents owe to their insurance companies? -
ANSWER: Loyalty, good faith, reasonable care, contractual duties
What are the standards of care owed to the customers? - ANSWER: adequate
coverage, proper coverage, coverage placed in best interest, prompt
communication, coverage with financially sound company
, Insurance agency revenue typically falls into these four categories: - ANSWER:
Commission, fee based, profit sharing, investment income
This is typically the largest source of income and is the percentage of the premium
that the agency earns - ANSWER: Comission
Agencies may offer additional services for which they may be able to legally charge a
fee (consulting, loss control) - ANSWER: Fee based
This is a bonus that insurance companies may pay to agencies to reward the
agencies' growth - ANSWER: Contingent/Profit sharing
Generated from the investment of the agencies' assests - ANSWER: Investment
income
Agencies divide their personnel into two major categories: - ANSWER: Sales & service
Comprised of agents or brokers with the responsibility to identify prospects, make
sales calls, determine prospects needs, present solutions and secure buying decision
- ANSWER: Sales staff
If the individual is placing insurance coverage with a company for which the
individual does not have a contract, they are acting as a _______ - ANSWER: Broker
If the individual is placing insurance coverage with a company for which the
individual has a contract, they are acting as a _______ - ANSWER: Agent
T/F. A broker does not have binding authority - ANSWER: True
Brokers act on behalf of the ______ - ANSWER: customer
Agents act on behalf of the _____ - ANSWER: insurance company
What is another name for an agent/broker - ANSWER: Producer
Agencies with few employees operate this way. Staff will report directly to the owner
- ANSWER: Horizontal structure
Larger agencies operate this way. Division of job functions and responsibilities are
well defined - ANSWER: Vertical structure
What are the steps of risk management? - ANSWER: Identification, analysis, control,
finance, administration
This is the most important step in the risk management process - ANSWER: Risk
Identification
