Agency Management Systems & Operations Flashcards
7 cards from real ACE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Agency Management Systems & Operations flashcards as text
What is the key difference between an 'endorsed' and a 'rewritten' policy in an agency management system?
Answer: An endorsement modifies an existing policy mid-term; a rewrite issues a new policy replacing the old one
An endorsement amends specific terms of an in-force policy without issuing a new policy number, while a rewrite cancels the existing policy and issues a brand-new one with a new policy number.
In an agency management system, what does 'applied' mean in the context of premium accounting?
Answer: Premium that has been recorded against a specific policy or invoice in the agency's records
In AMS accounting, 'applied' refers to premium that has been allocated and posted to a specific policy or invoice, reconciling it within the agency's trust or operating account.
Which ACORD standard is most commonly used for life and health insurance data exchange between carriers and distributors?
Answer: ACORD XML Life Transactions (ALIFE)
ACORD XML Life Transactions (ALIFE) is the ACORD standard designed for life and annuity data exchange, covering new business, in-force policy data, and financial transactions between life carriers and distributors.
What does an agency's 'aged receivables' report indicate?
Answer: Outstanding premium balances owed to the agency, categorized by how long they have been unpaid
Aged receivables reports show unpaid balances owed to the agency, bucketed by aging periods (30, 60, 90+ days), helping management identify collection risk and cash flow issues.
Which ACORD form serves as the standard evidence of property insurance for mortgagees and lenders?
Answer: ACORD 27
ACORD 27 (Evidence of Property Insurance) is the standard form used to provide mortgagees, lenders, and other interested parties with evidence of property insurance coverage.
What is the purpose of an 'activity log' or 'diary' function in an agency management system?
Answer: To record all interactions, tasks, and follow-up actions related to a client or policy
The activity log or diary function creates a chronological audit trail of all communications, tasks, and follow-ups related to clients and policies, supporting E&O documentation and workflow management.
In agency operations, what does 'direct bill' mean relative to 'agency bill'?
Answer: Direct bill means the carrier invoices and collects premium directly from the insured; agency bill means the agency collects and remits premium to the carrier
In direct bill arrangements the carrier handles all premium billing and collection directly with the insured, while in agency bill the agency invoices the client and is responsible for remitting net premium to the carrier.