Before we commence this section, it is very important to
realise that the law of agency is much wider than its application to insurance
agents (important as that is). Therefore, in the following paragraphs, do
not think only of insurance agents. The comments apply to every kind of agent
(a shipping agent, an estate agent, etc.), an explanation of which
immediately follows.
(a) An agent in this...
Friday, November 27, 2015
INSURANCE SALES
Very closely connected with marketing, there may
be considerable overlap of activity, if separate sections exist. The name,
however, indicates the functions, which specifically will include:
(a) Product liaison: it is vital that the closest
co-operation exists between Product Development, Marketing and Sales, for
obvious reasons. Poor communication between colleagues in this area could have
disastrous...
Sunday, February 22, 2015
ACCOUNTING AND INVESTMENT
The Accountant is another official with a vital role to
play in the running of any business enterprise, and particularly that of an
insurer. The functions of this department are fairly obvious, but for
completeness we note:
(a) Record keeping: financial records must be
accurate and reliable.
(b) Collections: ensuring that money receivable
by the insurer is in fact paid clearly affects the...
POLICY ADMINISTRATION
This is another departmental description that may
involve overlap with other sections or departments mentioned above or below.
The general areas of concern here may be:
(a) General or Life insurance? : this is a most
important question, since the policy document with each has a very different
significance. With general insurance, technically there need not be a policy
(although there almost...
MARKETING AND PROMOTION
Remembering the quotation above, this is a very
important area for the insurer.
The particular areas of responsibility include:
(a) Public Relations: as explained, this may
overlap to some extent with Customer Services, but the image of the company and
its perceived standing in the eyes of the public is of great significance. This
wide-ranging activity will include: (i) the co-ordination of...
CORE FUNCTIONS OF AN INSURANCE COMPANY
Whilst an insurance intermediary is unlikely to have close
contact with the internal organisation of insurance companies, it is good to
understand something of their infrastructure and to be aware of the various
departments and personnel behind the marketing process. These, in outline, are
considered below. Please remember, however, that there is no single system for
insurance companies to follow,...
SUBROGATION
Definition
Subornation is the exercise, for one’s own benefit, of
rights or remedies possessed by another against third parties. As a corollary
(i.e. a natural consequence of an established principle) of indemnity,
subornation allows proceeds of claim against third party be passed to insurers,
to the extent of their insurance payments. At common law, an insurer’s subornation
action must be conducted...
CONTRIBUTION
Equitable Doctrine of Contribution
This is a claims-related doctrine of equity which
applies as between insurers in the event of a double insurance, a situation
where two or more policies have been effected by or on behalf of the insured on
the same interest or any part thereof, and the aggregate of the sums insured
exceeds the indemnity legally allowed.
[Example: Suppose a husband and wife each...
Policy Provisions Providing More Than Indemnity
Indemnity is very logical and technically easy to
defend. However, in practice, most policyholders are ignorant of this and are
confused and offended when insurers ‘reduce’ their claims, by deducting
depreciation, wear and tear, etc. As a marketing or public relations exercise,
insurers sometimes offer or agree to grant property insurances which may be said
to give a commercial rather than a strict...
Policy Provisions Preventing Indemnity
While policies in some classes of business promise to indemnify
the insured, this has to be done subject to the express terms of the
policy, if any. Some of these terms mean that something less than indemnity is
payable. For example:
(a) Average: Most non-marine property insurances
are expressly subject to average. This means that the insurer expects
the insured property to be insured for its...