Essential Skills for the
Insurance Broker and Agent
Welcome to my virtual
class!
Essential Skills for the
Insurance Broker and
Agent
C130
Instructor: Leanne Taylor
Fall 2016
Agenda
Introductions
Housekeeping
Timeline & Course structure
Roles and responsibilities
Introduction to the virtual classroom
Chapter #1 review
Chapter #1 quiz
Next steps
Welcome!
Introductions
My name is Leanne Taylor
I have been in the Insurance Industry for 24+ yrs
working with ICBC
22 years in the Claims Division, now I work in the
Insurance Division
Earned my CIP designation in 2010
Facilitator of Learning since 2011 in C110, C111
& C130
Welcome!
Introductions Your Turn!
In the chat room
Years of experience in the
Insurance Industry & type of
insurance
Number of CIP courses you have
completed
Housekeeping
Examination
Timeline
Course Structure
The Insurance Intermediary
Broker Skills
Foundational
Information
Analyzing Risk
Applying for Insurance
From Quote to Policy
Midterm
Friday
November 4
9:30 11:00
am
Property
Insurance
Automobile
Insurance
Renewals,
Endorsements ,
Premiums &
Cancellations
Liability
Insurance
Claims
Roles and Responsibilities
Roles and Responsibilities
Roles and Responsibilities
Introduction to the virtual classroom
Introduction to the virtual classroom
This is how you
get into the
virtual
classrooms
Monday nights
6pm
Taking a quiz two ways!
Taking a Quiz two ways!
Taking a Quiz lets practice
Maximum 10 minutes
Dont get confused..
Finally the poll questions.
End of Housekeeping
Any Questions?
Essential Skills for the
Insurance Broker and
Agent
C130
Chapter #1
Chapter #1
5 Learning Objectives
23 pages
Topics:
Defining Insurance
Intermediaries
Roles & functions
Licensing & regulating authorities
Professionalism
Chapter #1
Defining
Insurance
Risk - its all
around us.
Assume
Transfer
Accept
Insurance
Social
Life & Health
General
(P&C)
Manage
Prevention/Risk
Control
Chapter #1
Social
Basic coverage BC MSP
Excess through private or group plans
Life & Health
Life, accident, sickness, disability insurance
General Insurance (P&C)
Personal (property & liability)
Commercial (business & auto used for
business)
Chapter #1
The Insurance Intermediary
Agents & Brokers (Page 4-8)
Agen
Sell for single
insurer t
Insurer provides:
-sales support
training/educatio
n
-product
knowledge
-office set up
support
-employed by
Insurer OR
independent
Chapter #1
-work directly for insurers
-these insurers knowns as direct
insurers as sell insurance to the public
Employed
-paid a salary, salary/bonus, or
Agent
salary/commission
-can be single proprietorship, partnership
or incorporated company
-business and client list belongs to insurer
-insurer issues/services policies, invoices,
collects premiums
-entrepreneurial style
Independent -separate office from the one insurer they
Agent
deal with
-agencies pay their own expenses
-agents are paid by commission,
salary/commission
-business & client list belong to insurer
-higher commission paid for new business
Agents & Brokers (Page 4-8)
Agen
t
General
Agent
Chapter #1
-also known as managing agent
-operated in entrepreneurial style
-authority from insurer to work
business in a large territory (one-more
provinces)
-authorized to appoint agents
-settlement of claims
Agents & Brokers (Page 4-8)
Broker
Broker
-Sells for more
than 1 insurer
-will select
clients
-will select
products
-builds strategic
marketing plan
to attract
business
Wholesale
Broker
Chapter #1
-independent business people working for
brokerages
-can be single proprietorship, partnership
or incorporated company
-paid a commission for each policy issued
to clients
(or salary, salary/commission, straight
commission)
-Broker owns business & client list
--provide
market
access
for hard to place
-Broker
may
cancel
a contract/arrangement
risks/nonstandard
risks not placeand
move to
another insurer
able by agents/brokers
-will identify the need then negotiate with
insurer(s) to place the risk
-insurers give them wide latitude
(underwrite, issue a policy, pay claims)
-can act as middleman in large
markets/hard to place classes (no
underwriting, not binding)
Chapter #1
Who are
they?
Quebec
Agen
t
Common Law
Principal and Agent Relationship (page
8-9)
Someone who is authorized to act
on behalf of another
Employed to secure contracts or
act for Employers in contractual
matter
Employees or Independent
Business People
Mandate - contract
Mandator the principal
Mandatary - the agent
Chapter #1
Principal and Agent Relationship (Page
8-9)
Insurance
Client
Agent/Bro
ker
Acting for the Client:
-Providing advice
-Carrying out tasks requested
by client
-Increasing coverage
-Monitoring their needs
Duty to the client:
ensure all exposures
are covered
Insurer
Acting for the Insurer:
-solicit insurance applications
-describes types of coverage
-interpreting policy provisions
-enter contract with client on behalf of
insurer
Duty to the insurer: act
Law of
within authority granted &
Agency &
place coverage on
Case Law
acceptable risks as per the
Agreement (contract)
Chapter #1
Agency/Brokerage Contract (page 9)
Agreement between insurer & agency/broker
Legally binding contract
Sets the terms and conditions for market access
Provides details such as
Authority
Obligations
Rights
Duties
Influenced by provincial law (Insurance Act)
Brokers may have various agreements with multiple
insurers
Agents usually only contract with one company
Chapter #1
Agency/Brokerage Contract (page
9)
SAMPLE
Chapter #1
Duty of Care (page 10-11)
Legal duty owed to another
Standard of Care - as prescribed
Degree of Care reasonableness / competency
Fines Flowers Ltd vs General Accident Assurance Co
(1977)
Use of the word stringent (step higher than ordinary)
When the duty shifts
Rights of consumers are protected above
insurers
Utmost good faith & high ethical standard
Chapter #1
Roles & Functions of the Intermediary
(page 12-16)
Prospect for new clients
Qualify the client
Advise the client
Facilitate the application process
Obtain instructions
Negotiate insurance
Facilitate the claims process
You may need
to answer this
learning
objective for
the mid-term
examination
Chapter #1
Prospect for potential clients
Source of new business
Target marketing
Market segmentation
Advertising
Cold-calling
Referrals
Renewals / returning clients
Chapter #1
Qualify the client
Determine if client meets targeted market
segment
Series of questions
Maintaining confidentiality & discretion
Build a trusting environment
Can you/do you want to assist this client?
Chapter #1
Advise the client
Based on the clients needs, provide advice
on the best option(s) available for
coverage on exposures
Identify and quantify exposures (aka risk
analysis)
Recommend insurance even if beyond
scope/availability
Provide risk management advice
Chapter #1
Facilitate the Application Process
Support the client to complete the correct
forms properly then submit to the insurer
Clarify the information requested, and why
Emphasize full disclosure requirements
Client completes the application process
Do not provide legal advice
Chapter #1
Obtain instructions
After providing recommendations to the
client, you will seek instructions from the
client
Written instructions are recommended for
cancellations, deletions, reduction in
coverage
Chapter #1
Negotiate Insurance
Providing the agent/broker:
Pre-qualified client according to underwriting
rules/guidelines
Within authority granted as per the contract
Negotiate with the insurer
Terms and conditions
New policies, endorsements, renewals
Chapter #1
Negotiate Insurance also includes:
Review clients portfolio
Solicit information from the client
Offer options to improve coverage
Carry out instructions
Arrange for coverage
Arrange changes to existing coverage
Arrange for cancellation or lapsing
coverage
Chapter #1
Facilitate the Claims Process when a
loss occurs
Reassurance, assistance & advice
Outline general claims process &
expectations
Do not jeopardize insurers claims handling
Do no confirm coverage
Notify insurer immediately
Follow up with client along the way
Chapter #1
Licensing and Regulatory Authorities (page 1618)
Follow laws as any other business
Regulations as per the Insurance Acts of each
province
Insurance brokers and agents must be licensed
Ensures qualifications & minimum standards are met
Restricted / progressive licensing options
Regulatory authorities for brokers/agents
Some provinces - Government department
Agents Government department
Brokers Insurance council
Chapter #1
Professionalism in Insurance (Page 18-21)
Reputation in industry to ensure consumer
trust & confidence
Well informed (education & research
Comply with law
Act utmost good faith
Ethics:
minimum standards outlined in Insurance Acts
Each provincial Council will have their own
Insurance Institute of Canada
Chapter #1
Professionalism in Insurance (Page 1821)
What are the duties owed by brokers/agents
to the clients?
1)
2)
3)
4)
5)
Chapter #1
Professionalism in Insurance (Page 18-21)
What are the duties owed by brokers/agents
to the clients?
1) provide best coverage suited to the clients
needs
2) not be swayed by remunerative gain
3) not take advantage of clients lack of
knowledge/inexperience
4) hold info in strict confidence
5) perform competently
Chapter #1
Professionalism in Insurance (Page 1821)
What are the duties owed by brokers/agents
to insurers?
1)
2)
3)
Chapter #1
Professionalism in Insurance (Page 1821)
What are the duties owed by brokers/agents
to insurers?
1) honest and trustworthy
2) stay within terms of broker agreement
3) disclose relevant facts even if makes placing
risk more difficult
Chapter #1
Professionalism in Insurance (Page 1821)
Utmost Good Faith applies to all parties
Operating with honesty and integrity
Full disclosure required from broker/agent to
insurer
Material facts often misunderstood by
clients
Chapter #1
Professionalism in Insurance (Page 18-21)
Privacy Laws
Access to a lot of confidential information
While discretion & respect for privacy are common
sense, privacy laws are in effect to protect
consumers
PIPEDA:
Governs collection, use and disclosure of personal
information
Information collected can only be used for its original
intended purpose unless approved by the client
One exception: _____________________________
Chapter #1
Errors & Omissions
How would an errors and omissions claim
arise?
Allegations of Error (doing something wrong)
An omission (failing to do something)
Due to an agent/brokers actions:
a client does not have coverage for a loss, or
An insurer is required to pay for a loss that it did not intend
to
What is the best defence to an E&O claim:
Documentation, Communication & acting within
scope of authority & competence
Chapter #1
Mitigating E&O Claims
Keeping adequate records & notes of
conversations
Communicate clearly; follow up in writing
Follow up on promises
Fulfill obligations
Stay within level of competence and
expertise
Advise when coverage unavailable
Chapter #1
Major causes of E&O Claims failure to:
Provide cover
Explain the effects of exclusions,
exemptions & restrictions
Place cover at all
Provide correct cover
Provide cover in time
What can you do to mitigate each one?
Chapter #1
End of Chapter #1 Insurance
Intermediary
Reviewed the entire Chapter
Emphasizing Learning Objectives
Define intermediary; discuss brokers vs agents
Principal and agent relationships
Roles and functions of brokers
Utmost good faith
Errors & Omissions
Recording of class available tomorrow
Chapter #1
Next Steps
Review the questions as outlined in the Student
Resource Guide for Chapter #1
Review the summary sheet & resources
Complete the on-line quiz as soon as possible
Timed quiz (60 minutes)
One chance to complete it once you start commit
to it!
The quicker you write it, the quicker I will mark it
Any quizzes completed this week will be marked by
next Mondays class
Chapter #1
Next Steps
Review for next week Chapter #2
Broker Skills
Prepare to complete quiz immediately
following the class (and every week
thereafter)
Pre-read Student Resource Guide Questions
Ask questions if you cannot find the answer
I may ask questions in class!
Homework assignments an update!