CE-Ethic
Ross is an agent for XYZ insurance company. Ross refuses to complete an auto insurance application because of a person's nationality. If a suit is filed because of the refusal, who is likely to be named in a lawsuit?
Both Ross and XYZ insurance because the acts of an agent are the acts of the principal.
which of the following best describes a fiduciary?
One whole position and responsibilities involve a high degree of trust and confidence.
Which of the following scenarios might indicate that Paul should NOT be considered an insurance professional?
Paul only offers policies that generate the most premium income for his agency.
ABC insurance company aims to be the premier writer of auto insurance in southeast texas. Its founders work to create a mission statement that will express the company's vision. Which of the following is NOT likely to be found in ABC's mission statement?
ABC insurance company will deliver promptly all quotes, policies, endorsements, and renewals.
Sarah resprests the abc insurance company for all types of life and health insurance policies. ABC, whose policies are usually superior to other companies' policies, currently has a promotion: sell $1 million of whole life insurance in the first quarter and earn a trip to Hawaii. By the last week of the quarter, Sarah has sold and placed $750,000 of whole life insurance. The final $250,000 is in sight. Sarah knows that her brother-in-law has $500,000 of whole life insurance placed through a competitor. Selling a replacement policy to him would probably be a snap, whether warrancted or not. What should Sarah do? sell the policy to her brother-in-law.
By pointing out the cash value differences in ABC's policy versus the existing policy
What is the term describing the concept that an independent agent has a relationship with both the insurer and the customer?
Dual agency
Paul, an agent, has received a policy down payment and issued a binder of insurance for a house near his office. Paul. has known his client for 15 years, and their sons are best friends. When he stops at the location to take a picture for the application, he is shocked at the state of disrepair. The insurer will not want this risk, but Paul could stall the rejection by sending the application with out the picture . To whom does Paul owe his greatest loyalty?
His insurer, who requires full disclosure.
Your insurer rejects an application for a homeowner's policy based on the condition of the property. The client's is your mother's friend and has known you since you were a child. Which of the following choices is your ethical responsibility as producer?
Review the reason for the rejection and promptly notify the applicant of the company's decisions
you are completing an application for life insurance. Your client has already smoked foru cigarettes during the application process. when you advise him that he premium is substantially higher for smokers, he tells you he will try to quit smoking if you will indicate on the application that he is a nonsmoker. As an ethical insurance producer, what should you do?
Tell the client your responsibilities to the insurer and your agency require you to be truthful.
During your agency's weekly meeting, your supervisor introduces a new insurance producer who will be assisting you with your book of business. Unfortunately, you worked with her at another agency where there was talk of fraud and misrepresentation on applications. If you are not sure whether the accusations are true, what should you do?
Tell your supervisor about the rumors so he can determine whether they are true.
Douglas is just beginning his career as an insurance professional, and he is determined to be successful in providing for his family, as well as earning a respected professional reputation in his community. What are the primary requirements Douglas will have to possess in order to effectively meet the needs of clients.
The necessary product knowledge and skills and a commitment to educating his clients.
Within the concept of agency, which of the following is the maker of the agency contract and the first party to the contract?
The principal
Thomas, branch manager at xyz insurance brokers, discovers that his office knowingly sells financial products that are inappropriate for many customers, sometimes resulting in the financial ruin of clients who have placed their trust in the brokerage. Which of the following lines of reasoning will allow thomas to reach the correct decision about how to best deal with this situation?
Thomas should bring the matter to his supervisor and to the texas department of insurance (tdi ), if necessary.
which of the following statements best describes the concept of agency?
agency is the relationship between two parties, in which one party (principal) authorizes the second party (agent) to perform certain legally binding acts on the principal's behalf.
In order to generate business, Diane charges that XYZ agency has been selling inappropriate policies to some of hits customers. Diane's plan works, and she begins acquiring ZYZ's clients. When XYZ decides to pursue a lawsuit how is Diane's agency involved, it had no knowledge of her scheme?
by virtue of the agency relationship, Diane's agency may be help accountable for her actions.
A primary purpose for establishing a code of conduct within an organization is to
define the organization's purpose, what is hopes to accomplish, and its plans to achieve its goals.
while reviewing a commercial liability policy issued by the home office, you notice that the premium is substantially higher that you ordinally quoted to the client. There is additional coverage that you did not request. Your client is expecting yo to deliver his policy in tow hours what should you do?
explain the situation to the client and return the policy to the home office for recalculation
Agent Aaron learns that an accounting error has resulted in overpayment of commissions to him and underpayment to a fellow agent. The other agent doesn't notice, and Aaron struggles with the moral dilemma of reporting the mistake. What is the term that describes Aaron's inner belief that humans should behave honorably toward others? golden rule double standard ethical standard moral decision
golden rule
Richard has met with a new client, bound homeowners coverage, and accepted te premium. As he is leaving the client's house, the client casually remarks that he's happy to be with Richard's company because his previous insurer had formally accused him of fraud. What is Richards's responsibility to the insurance company
he must advise the company of his client's remarks.
Bob is an insurance producer who sometimes underquotes an actual policy premium to make a sale. When the policy comes in, Bob explains to the client that the insurer must have made a mistake, but that he'll probably be able to get the premium reduced. From past experience, Bob has discovered that most clients forget about the amount of the original quotation and keep the policy. Based on this information, bob is acting. illegally and unethically legally but slightly unethically ethically but legally ethically but illegally
illegally and unethically
Marc is a texas producer in a small agency with a limited operating budget. Marc routinely deposit his client's payments into a premium fund trust account (PFTA) and uses the funds to pay his monthly bills. Marc sends the appropriate premiums to his insurer each month. Marc is acting.
illegally and unethically by commingling funds
charlie represents three insurance companies with substantially the same coverage and service. The real difference amount the insurers is premium. Best company's premium is always about 15% more than the other two. When charlie knows his client is wealthy, he provides a quote from BEST. When he is unsure about his client's financial status, he quotes all three companies. Which of the following statements about Charlie's ethical principles and practices is NOT correct? it is charlie's responsibility to serve his clients. is is legal but not ethical for charlie to quote the highest premium. it is charlies' duty to act in the best interest of the insurer. it is moral and ethical for charlie to quote only the highest premium.
it is moral and ethical for charlie to quote only the highest premium
The word "ethics" is derived from two greek words that mean values and belief moral and character principles and standards ethics and honesty.
moral and character
Rhonda is new in her job of selling life insurance for ABC insurance company. In her enthusiasm for her products, Rhonda mistakenly tells clients that a certain policy provides coverage that it does not. Based on Rhonda's description of the policy coverage, the clients purchase the policies. Later, when Rhonda has had the benefit of more experience, she realizes her mistake. What does this situation say about Rhonda's power and authority to act for the insurer she represents?
the clients may be entitled to the coverage because Rhonda has been given the power and express authority to act for the insurer.
thomas is an insurance producer who has scheduled a seminar to discuss estate planning. One of the scheduled speakers is unavailable so he invites his friend, Robert, to speak. Robert is an independent tax preparer, but Thomas introduces him as an "IRS professional." in this case, Thomas is acting. ethically because it is his duty to educate his clients. unethically because robert is not an income tax expert or an IRS professional unethically because he is not presenting the original speaker legally because Robert is familiar with IRS rules and regulations.
unethically because robert is not an income tax expert or an IRS professional
