INSURANCE OCCUPATIONS

-Answer Questions-

Assignment submitted to

Sir Irshad Ahmed

Group members Ghana durani Fatima haider Fazeela Rasheed Abran Ishtiaq Aqsa Butt

INSURANCE OCCUPATIONS

Question 1
What duties do principles owe their agents? What duties do agents owe their principals?
The law defines several duties that agents owe their principals. Among these are the: DUTY OF LOYALTY Agents must not further their own interest at their principals expense DUTY OF CARE The duty of not to be negligent DUTY TO OBEY IN INSTRUCTIONS The duties that agents owe their principals are: ACTUAL AUTHORITY EXPRESS AUTHORITY INCIDENTIAL AUTHORITY

Question 2
What areas of the law should be familiar to property insurance agents know? What areas of the law should a life insurance agents know? How does knowledge of the law assist the loss adjuster?
Property insurance agents must be familiar to Real estate law and very familiar to Property values. The life insurance agents must be familiar with Social security and Other Government Benefits.

Question 3
Explain the basis for conflict between the insurance agents and the home-office under writer. In practice why are such conflicts often not a problem?

Insurance agent
An Insurance Agent is a state-licensed professional who represents an insurance company in selling and servicing policies. In most states, insurance agents are required to undergo approximately 40 hours of passing classroom education for the type of insurance they are qualifying for to be approved to take the state insurance exam. After successfully completing the state exam an insurance agent will need to take continuing education classes to keep her/his insurance license current. Only insurance agents are allowed to sell and service insurance policies and only in the states they are licensed in.

Home office underwriters

Among the career paths in insurance, insurance underwriters analyze insurance applications, determining whether they should be accepted or rejected. They may be employed either by insurance carriers (insurance companies), or by independent insurance brokerage firms. While they normally fill a back-office

role in support of insurance sales agents (insurance agents), they sometimes accompany the latter on sales calls to clients or prospective clients.

Question 4
Describe the differences between an insurance agent and an insurance broker. Are these differences important to the insurance consumer?
An insurance agent is a person authorized to act for another person. The agent may create, perform, terminates a contract for another person. An insurance broker is an agent with the limited authority to find an insurance company willing to accept a transfer of an insurance applicants exposure to loss. The differences between insurance agent and an insurance broker are important to the insurer consumer because broker helps to bring these two parties together to complete a transaction.

Question 5
Why do life insurance agents and property insurance agents have different grant of authority?
An important distinction between the life and property insurance agents activity is the limitation on the life insurance agents authority. Although the property agent can and often does have the legal authority to bind a principal to an

insurance contract, the life insurance agent has never this authority. The reason for this difference in authority is that property insurance contract typically may be cancelled by the insurer at any time after a short notice period. Life insurance companies cannot contracts after a brief initial period except for nonpayment for premiums.

Question 6
What factor should the consumer consider in choosing a property insurance agent? A life insurance agent?
Factors that a consumer should consider in choosing a property insurance agent are that the agents must provide information about related areas. For example the life insurance agent must know about and be able to explain certain aspects of the federal income tax and the unified transfer (gift and estate) tax laws. The life insurance agents also must be familiar with social security and other government benefits. The property insurance agents also must be familiar with certain aspects of real estate law and very familiar with property values.

Question 7
Explain the differences between waiver and estoppel. How can the doctrines of waiver and estoppel result in an insurance company paying for a claim it otherwise might deny? Waiver
Is the international abandonment of a known right.

ESTOPPEL
Is a court action preventing a person from asserting his or her rights because the

court found the persons conduct inconsistent with asserting the right. When either of the doctrine is applied in a particular case, an insurer may find it must pay claims it otherwise might not have had to pay. For example an insurance policy might contain a right for the insurer to receive a complete inventory from the insured within 60 days after a loss. Such a right could be waived by an insurer. If such a right is waived, the insurer no longer can deny the claim because the insured is failed to deliver the inventory when specified in the contract.

Question 8
What purpose does a reservation of rights letter serve?
These letters informing that the insurer is reserving certain rights are not denials of coverage. They represent notice from the insurer to the insured that the insurer is not certain that coverage exists but that the insurer plans to proceed with the loss adjustment and perhaps the legal defense as if the coverage existed.

Question 9

Should a good job of loss adjusting always involve the claims adjustor negotiating the lowest possible dollar amount of claims settlement? What rights do insureds have if they feel the proposed loss adjustment is unfair?
The loss adjustors work begins once a claim for payment reaches the insurer period the adjustor must investigate the claim, report the findings to the insurer, and sometimes negotiate affair settlement period.

Question 10
What incentive does the insurer have to settle claims fairly?
The incentive does the insurer have to settled claims fairly is the method of loss adjustor. It will help the insurer to manage all the losses. Insurer makes no payment for potential losses and pay full amount due after receiving property notification of insureds death.

Question 11
Why do insurance companies hire independent loss adjustment bureaus?
Insurance companies often used loss adjustors who are not their own employees; instead, they hire the services of an independent adjustor or an independent adjustment bureau. This is because it would be impractical for every automatic insurance companies to keep an adjustor near the scene of every possible automobile accident in the country or to send its adjustors all over the country to investigate claims.

Question 12
Why must the under-writer be concerned about adverse selection?

Under-writer must be concerned about adverse selection so that he could select rate applications for insurance. He must be constantly alert to the possibility of people more likely than average to experience a loss applying for insurance at standard rates. The results of such adverse selection are losses greater than the insurance company anticipated when rates were formulated.

Question 13
What kind of information could the property insurance agent or the life insurance agent get from a credit bureau that would be helpful in making insurance underwriting decisions?
Property insurance agent or life insurance agent gets information from a credit bureau about life insurance applicants. Today information about applicants is primarily medical including blood pressure. The more accurate the information the insurer has, the fairer the premium charges are. Previously, non-medical information relating to an applicants moral habits was recorded.