Cpcu 520 - Assignment 3

Front 1

Name the two types of authority in agent-principle relationships under agency law

Back 1

1. Apparent authority: authority arising from the reasonable belief of a third party based on appearances created by a principal indicating an agent has the authority to act on the principal's behalf
2. Actual authority: authority, either implied or expressed, conferred on an agent by a principal through an agency contract

Front 2

Highlight

Back 2

Producers primarily represent insurers; however, the law requires producers to perform certain duties for customers, too, depending upon the relationship between producer and the customer

Front 3

Name the two duties owed to a customer when a producer agrees to provide one or more specific policies to the customer

Back 3

1.Provide the policies agreed upon
2.Place agreed-upon policies with an insurer that is solvent

Front 4

Highlight

Back 4

Any business selling a service or a product must have a marketing system strategy and a distribution channel strategy to succesffuly execute the business' marketing plan and deliver services or products to customers

Front 5

A distribution channel is the method a service's or product's producer uses to transfer the service or product to the end customer. Give four examples of distribution channels

Back 5

1.Direct mail
2.Internet access
3.Media advertising
4.Telemarketing

Front 6

List four items typically included in an insurance service or product marketing plan

Back 6

1.Proposal of a product and goals for sales: summarizes the new product's operation and includes a description of unmet needs to be filled by the product with a summary of projected sales
2.Situational analysis: a SWOT analysis is conducted for the marketplace and the competition; critical success factors; required technology; training, and resources; and the current regulatory and legal environments are assessed
3.Goals for marketing: proposed target market is outlined with detailed sales projections and methods for measuring success
4.Strategies for marketing: proposals and plans for developing, pricing, promoting, and selling the product, including a determination of the best distribution channels for the product

Front 7

Excess and surplus lines brokers are subject to the following six regulatory responsibilities

Back 7

1.Report filing and tax collection
2.Document maintenance
3.Property-casualty licensing
4.Notice to insured
5.Bonding
6.Diligent search or effort

Front 8

Highlight

Back 8

Alternative distribution channels are channels of distribution used by insurers electing not to use an agency force to obtain and manage customers. The channels are often technology driven and used in combination with traditional channels of distribution.

Front 9

List five alternative distribution channels

Back 9

1.Call centers
2.Direct response distribution channel
3.Financial institutions
4.Group marketing
5.Internet

Front 10

Name four reasons insurers view financial institutions as benefical strategic partners

Back 10

1.Efficient use of technology for mining databases to target particular services and products
2.Predisposition to cross-selling services and products
3.Strength in transaction processing
4.Strong customer base

Front 11

Highlight

Back 11

The Gramm-Leach-Bliley Act (GLB Act) raised the restrictions on bank holding companies that had precluded bank holding companies from becoming affiliated with insurers, securities firms, and other providers of financial services.

Front 12

Highlight

Back 12

GLB Act, also called the FInancial Services Modernization Act, created momentum in the trend toward several distribution channels.

Front 13

Highlight

Back 13

A major result of the GLB Act is the entry of banking institutions into the insurance industry as product distributors and sellers.

Front 14

Highlight

Back 14

The banking and insurance industries have responded to the passage of teh GLB Act by forming collaborations and alliances.

Front 15

List four methods used by banks and financial services companies to expand into the insurance industry

Back 15

1.Merger or acquisition
2.Organic growth
3.Outsourcing
4.Combined methods (1) through (3)

Front 16

Actual authority

Back 16

Authority, either implied or express, conferred on an agent by a principal through an agency contract

Front 17

Affinity marketing

Back 17

A kind of group marketing targeting groups based on

Front 18

Agency bill

Back 18

A procedure for payment in which a producer sends bills for premiums to the insured, collects the premiums from the insureds, deducts applicable producer commissions, and sends the remaining net premiums to the insurer

Front 19

Alternative distribution channels

Back 19

Channels of distribution used by insurers electing not to use an agency force to obtain and manage custoemrs; the channels are often technology driven and used in combination wtih traditional channels of distribution

Front 20

Apparent authority

Back 20

Authority arising from the reasonable belief of a third party based on appearances created by a principal indicating an agent has the authority to act on the principal's behalf

Front 21

Cold canvass

Back 21

Also called cold calling; a sales technique in insurance that involves soliciting insurance prospects without prior appointment in person or by telephone

Front 22

Direct bill

Back 22

A procedure for payment in which an insurer sends premium bills to the insured, collects the premium from the insured, and pays the producer any commission payable on the collected premium

Front 23

Direct response distribution channel

Back 23

An insurance distribution channel directly marketing to the customer through channels of distribution such as the Internet, mail, or telephone

Front 24

Direct writer marketing system

Back 24

A system of insurance marketing using sales agents or representatives who are the insurer's direct employees

Front 25

Distribution channel

Back 25

The method a service's or product's producer used to transfer the service or product to the end customer

Front 26

Excess and surplus lines (E&S) brokers

Back 26

Individuals or organizations placing business with insurers not licensed in the state in which a transaction takes place but who are allowed to write insurance because of a lack of availability of standard market insurers

Front 27

Exclusive agency marketing system

Back 27

A system of insurance marketing through which agents contract to exclusively sell insurance for a single insurer or associated group of insurers

Front 28

Group marketing

Back 28

Includes mass marketing or mass merchandising, affinity marketing, and worksite marketing or payroll deduction

Front 29

Independent agency and brokerage marketing system

Back 29

A marketing system of insruance under which agents or brokers, acting as independent contractors, sell insurance as representatives of several insruers that are unrelated

Front 30

Managing gernal agents (MGAs)

Back 30

Independent business organizations functioning like branch offices for one or more insurer, appointing and supervising independent brokers and agents for insurers participating in the independent agency and brokerage marketing system

Front 31

Marketing system

Back 31

A systemt facilitating and directing the development, desing, sale, and support of a service or product

Front 32

Prospecting

Back 32

Involves finding individuals, businesses, and entities that may want to purchase insurance services and products the producer's principal offers