Exam 5: Types of Insurers and Marketing Systems

Which of the following statements about the managerial system of marketing life insurance is (are)true? I.It uses branch offices run by independent agents who represent several companies. II.The branch manager is an employee of the insurer who has the responsibility for hiring and training new agents.

Which of the following statements is (are)true about savings bank life insurance (SBLI)? I.Each depositor at the savings bank receives life insurance equal to his or her savings account balance. II.The goal of SBLI is to provide low-cost life insurance to consumers.

All of the following statements about the general agency system used for selling life insurance are true EXCEPT

Which of the following statements about Lloyd's of London is true?

The corporate structure of mutual insurers is changing rapidly.All of the following are current trends EXCEPT

Which of the following statements about the exclusive agency system for marketing property and liability insurance is true?

Which of the following is characteristic of a typical mass merchandising plan?

A personal lines insurance company initiating banking and investment services for its policyowners demonstrates which financial services industry trend?

Jim would like to start a business raising thoroughbred racehorses.The business would be the first of its kind in the state where he lives.Obtaining insurance on the horses is a key concern,and he was dismayed to learn that none of the insurers authorized to operate in his state offer this specialty insurance.What is the name of the intermediary which Jack can use to place this coverage with an insurer not admitted to his state?

Sarah owns a property and liability insurance agency.She is authorized to represent several insurance companies and she is compensated by commissions.Sarah's agency owns the expiration rights to the business she sells.Sarah is a(n)

David has always been successful in sales.Recently,he was approached by a life insurer interested in hiring him.Initially,David was not interested in the job because he feared it would require a lot of administrative work."You're a super salesperson,David," he was told,"We're hiring you to do one thing and one thing only-SELL!" David accepted the position.David is a(n)

Under one life insurance marketing system,an insurer sells its products through established agents who are already engaged in life insurance sales.Under this system,an insurer enters into contracts with successful agents who agree to sell the insurer's products.This life insurance marketing system is called the

Brian is a life insurance agent.He is licensed to represent one company and has been assigned a territory.In addition to marketing life insurance products in the territory,Brian is also responsible for recruiting,training,and motivating new agents for the company in his territory.Brian is a(n)

ABC Insurance has always used the exclusive agency system to market coverages.ABC,however,cannot afford full-time agents in sparsely-populated areas.To reach customers in these areas,ABC enters into agreements with local independent agents.Using more than one marketing system is called employing a

ABC Life Insurance Company uses an interesting marketing system.The company locates life insurance agents who are already successful and signs the agents to sell ABC life insurance products.ABC does not ask their agents to recruit new agents.The type of marketing system that ABC Life Insurance Company uses is called the

All of the following are reasons why mutual insurance companies convert to stock insurance companies EXCEPT

Big Mutual Insurance Company would like to take advantage of financial services deregulation by acquiring a bank and a stock brokerage firm.Big Mutual,however,would have trouble raising the funds needed to make these acquisitions under the mutual form of organization.Big Mutual is planning to switch from the mutual form of organization to the stock form,and to issue shares of common stock to raise capital.This change in organizational structure is called

Which of the following statements about brokers is (are)true? I.They legally represent the insured rather than the insurance company. II.They are prohibited from being licensed as agents.

Neil needs insurance that is unavailable in the state where he lives.To obtain insurance from a nonadmitted insurer,Neil should contact a

R.I.P.Company manufactures herbicide and pesticide.The company had difficulty finding affordable liability insurance.R.I.P.established its own insurance company based in Bermuda for the purpose of insuring R.I.P.'s loss exposures.The company that R.I.P.formed is called a