FIN 3610 Assignment 3 Name_______________________
Chapter 5
Please remember that you must do your own work. Any plagiarism will result in a grade of zero for all students involved. Please use your own words even if you are using the textbook for answers. Always provide a citation when a reference is used.
- Describe the basic characteristics of the following types of insurance:
- Stock insurers:
- Mutual insurers:
- Loyd’s of London:
- Reciprocal exchange:
- Explain the legal distinction between an agent and a broker.
- Briefly describe and explain the key features of the following distribution systems in the marketing of property and casualty insurance.
- Independent agency system:
- Exclusive agency system:
- Direct writer:
- Direct response system:
- Multiple distribution systems:
- Who owns the policy expirations or the renewal rights to the business under the independent agency system, and who owns these under the exclusive system?
- The number of life insurers has declined sharply during the past decade because of the increase in company mergers and acquisitions, demutualization of insurers, and formation of mutual holding companies.
- Why have mergers and acquisitions among insurers increased over time?
- What is demutualization?
- Briefly explain the advantages of demutualization of a mutual life insurer.
- What is a mutual holding company?
……………..Answer Preview…………….
- (a) Stock insurers
A stock insurer is basically a publicly-traded insurance company that is owned by a group of stockholders, who also control it. This type of insurer is basically characterized by a number of features. These include:
-the stockholders have the mandate of electing the board of directors
-the stockholders stand to bear all the losses in the case of losses
-the stockholder with the majority of stock controls the company
-the company earns profit…
APA
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