Friday, November 27, 2015

The Law of AGENCY

9:15 PM Posted by Miyadom No comments
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...

INSURANCE SALES

9:15 PM Posted by Miyadom No comments
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

2:02 PM Posted by Miyadom No comments
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

2:01 PM Posted by Miyadom No comments
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

1:58 PM Posted by Miyadom No comments
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

1:56 PM Posted by Miyadom 1 comment
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

1:54 PM Posted by Miyadom No comments
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

1:17 PM Posted by Miyadom No comments
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

1:16 PM Posted by Miyadom No comments
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

1:14 PM Posted by Miyadom No comments
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...