Types of Insurers and Marketing Systems
Part 1
What is the meaning of the term reinsurance?
Explain the reasons for reinsurance.
Explain the term secularization of risk.
Part 2
What unfair trade practices are each of the following insurance agents violating? Explain the terms that you use.
Agent Jones offers a client to pay a portion of the premium if the client purchases a policy.
Agent Peterson convinces a client to replace a life insurance policy with a new policy that adds little value.
Part 3
Julia owns a building worth $800,000. She insures the building for $300,000 with Company A, $400,000 with Company B, and $100,000 with Company C. There is a fire, and the building sustains $100,000 in damage.
How much will Julia collect in insurance?
How much will each company pay?
What insurance term describes this situation?
What is its purpose?
