RISK MANAGEMENT FOR FINANCIAL PLANNERS
2nd Edition
Outline
CHAPTER 1: General Principles of Risk and Insurance
A. Definitions and Concepts
B. Peril, Hazard and Risk
C. The Concept of “Indemnity”
D. Insurance versus Gambling
E. Review of Definitions
F. Other Non-Insurance Responses to Risk
G. Voluntary and Social Insurance
CHAPTER 2: Legal Aspects of Insurance and Risk Management
A. The Nature of the Insurance Policy
B. The Principle of Indemnity
C. Replacement Cost versus ACV
D. Insurable Interest
E. Other Insurance Contract Characteristics
F. Insurance Regulation and Contract Requirements
G. Insurance Policy Characteristics
H. Evolving Coverages
I. Insurance Policy Analysis
CHAPTER 3: Insurance Policy Selection
A. What Is It?
1. Policy Term
2. Length of Time Required
3. Risk Tolerance
B. Business and Personal Uses
C. Advantages
D. Disadvantages
E. Design Features
1. Types of Insurance Producers
a. Independent Agents
b. Exclusive Agents
c. Employee Agents
d. Direct-Writing Agents
e. Brokers
f. Consultants
g. Surplus Lines Brokers
2. Design Features
a. General Rule
B. Parts of the Insurance Policy
1. Declarations Page
2. Coverage Parts
3. Use of Deductibles
4. Coinsurance
C. Where Can I Find Out More About It?
CHAPTER 4: Insurance Company Selection
A. What Is It?
1. Stock and Mutual Companies
2. Reciprocal Exchanges
3. Lloyd’s Associations
4. Risk Retention Groups
B. Regulation: Federal and State Law
C. Design Features
1. Types of Insurance Arrangements
a. Admitted and Nonadmitted Insurers
2. Financial Strength
a. Risk-Based Capital
b. Insurance Regulatory Information System (IRIS)
3. Size
4. Claims-Paying Philosophy
5. Support Services
6. Investments and Insurance Companies
D. Reinsurance
1. Treaty Reinsurance
a. Pro Rata Treaties
b. Excess of Loss Treaties
2. Facultative Reinsurance
3. Reinsurance Pools
E. Underwriting
F. Where Can I Find Out More About It?
CHAPTER 5: Liability and Contract Issues
A. What Is It?
B. Liability
C. Defenses Against Liability
D. Liability Insurance
E. Tort-Related Term and Definitions
F. Professional Liability
1. Agency Relationships
G. Contracts
H. Where Can I Find Out More About It?
CHAPTER 6: Automobile and Recreational Vehicle Insurance
A. What Is It?
B. The Auto Policy
1. Liability
2. Uninsured and Underinsured Motorist Coverage
3. Medical Payments Coverage
a. Personal Injury Protection
4. Physical Damage Coverage
5. Recreational Vehicle Coverage
6. Boatowners Coverage
D. Where Can I Find Out More About It?
E. Questions and Answers
CHAPTER 7: Personal Property Insurance
A. What Is It?
B. The Homeowners Policy
1. Who Is An Insured?
2. Homeowners Section I Coverages
3. Named and Special Perils Coverage
4. Exclusions
5. Loss Settlement Provisions
6. Homeowners Section II Coverages
C. Miscellaneous Property Coverages
D. Where Can I Find Out More About It?
E. Questions and Answers
CHAPTER 8: Personal Umbrella Coverage
A. What Is It?
B. What Do Umbrellas Have in Common?
C. What Don’t Umbrellas Have in Common?
D. Underwriting and Umbrellas
E. Where Can I Find Out More About It?
F. Questions and Answers
CHAPTER 9: Business and Business Activity Insurance
A. What Is It?
B. The Personal Auto Policy and Business Use
C. The Homeowners Policy and Business Activities
D. Home-Based Businesses
E. Where Can I Find Out More About It?
F. Questions and Answers
CHAPTER 10: Overview of Property Insurance
A. Insurance Needs and Rationale Analysis
B. Evaluation of Real and Personal Property Exposures
C. Evaluation of Auto Risk Exposures
D. Questions and Answers
CHAPTER 11: Commercial Property Insurance
A. What is it?
B. Business Uses
C. Advantages
D. Disadvantages
E. Design Features
1. Building and Personal Property Coverage
2. Methods of Insuring Commercial Property
3. Policy Structure
4. What’s Covered?
a. Buildings
b. Business Personal Property
5. Property Not Covered
6. Additional Coverages
7. Coverage Extensions
8. How Losses Are Settled
a. Limit of Insurance
b. Deductibles
9. Valuation
10. Perils Insured Against
11. Coverage Limitations and Exclusions
a. Doctrine of Concurrent Causation
b. Other Exclusions
12. Business Income Coverage
13. Boiler and Machinery
14. Builders Risk
15. Condominium Association
16. Flood Insurance
17. Inland Marine
18. Businessowners
F. Where Can I Find Out More About It?
G. Questions and Answers
CHAPTER 12: Business Automobile Insurance
A. What Is It?
1. Liability Protection
2. Physical Damage Protection
B. Business Uses
C. Advantages
D. Disadvantages
E. Design Features
1. Policy Structure
a. Declarations Form
b. Liability Coverage
c. Physical Damage Coverage
d. Conditions
e. Definitions
2. Endorsements
F. Legal Aspects
1. Fiscal Responsibility and Compulsory Insurance Laws
a. Financial Responsibility Laws
b. Compulsory Insurance Laws
c. Unsatisfied Judgments
d. Judgments and the Laws
e. Uninsured Motorists Coverage Laws
f. No-Fault Automobile Laws
g. Insurance Policies and the Laws
G. Where Can I Find Out More About It?
H. Questions and Answers
CHAPTER 13: Business Liability Issues in Insurance
A. What Is It?
B. Advantages
C. Disadvantages
D. Business Liability Insurance
E. Limitations and Exclusions
F. Other Types of Insurance for Business Liability Risks
G. Where Can I Find Out More About It?
H. Questions and Answers
CHAPTER 14: Professional Liability Insurance
A. What Is It?
B. Basis for Products/Completed Operations Liability Claim
C. The Products/Completed Operations Coverage Form
D. Advantages
E. Disadvantages
F. Questions and Answers
CHAPTER 15: Commercial Umbrella Liability Insurance
A. Usual Features and Provisions
1. Introduction
2. Variety in Umbrella Forms
3. Insuring Agreement
4. Persons Insured
5. Limits of Insurance
6. Definitions
7. Exclusions
8. Conditions
B. Advantages
C. Disadvantages
D. Where Can I Find Out More About It?
E. Questions and Answers
CHAPTER 16: Workers Compensation
A. What Is It?
1. Exclusive Remedy
B. Advantages
C. Disadvantages
D. Design Features
1. The Workers Compensation Policy
a. Part One: Workers Compensation
b. Part Two: Employers Liability Section
c. Part Three: Other States Insurance
2. Employer Duties
3. Other Considerations
E. Where Can I Find Out More About It?
CHAPTER 17: Professional Liability Errors & Omissions Insurance
A. What Is It?
B. Business Uses
C. Advantages
D. Disadvantages
E. Design Features
1. Occurrence or Claims-Made Forms
2. Types of Injury and Damages
F. Where Can I Find Out More About It?
CHAPTER 18: Directors and Officers Liability Insurance
A. What Is It?
1. Types of Entities Needing D&O Coverage
2. Responsibilities of Directors and Officers
3. General Categories of Exposures
a. Varieties of Shareholder and Corporate Claims
b. Other Categories of Claims
B. Business Uses
1. Corporate Indemnification
a. So Why Buy D&O Insurance?
C. Advantages
D. Disadvantages
E. Design Features
1. General Attributes of Most D&O Policies
a. Coverage Grants
b. Aggregate Limit of Liability
c. Claims-Made Coverage
d. Claims-Made Versus Occurrence Comparison
e. Claims-Reporting Requirements
f. Circumstances That May Result in a Claim
g. Definitions
h. Exclusions
i. Limit of Liability
j. Control of Defense
k. Panel Counsel
l. Discovery Provisions
m. Changes in the Organization
2. Other Insuring Agreements
a. Not-for-Profit Entity Coverage
b. Publicly Traded Entity Coverage
c. The Allocation Issue
d. Coverage for Claims Arising from Initial Public Offerings (IPOs)
3. The Application
F. Where Can I Find Out More About It?
1. Corporate Governance in General
2. Directors & Officers Liability Exposures and Insurance
G. Questions and Answers
CHAPTER 19: Overview of Health-Related Insurance
A. What Is It?
B. When Is the Use of This Tool Indicated?
C. Business Uses
D. Advantages
E. Disadvantages
F. Tax Implications
G. Where Can I Find Out More About It?
CHAPTER 20: Types of Individual Health Insurance Coverage
A. What Is It?
B. When Is the Use of Such a Tool Indicated?
C. Tax Implications
D. Design Features
1. Hospital-Surgical Coverage
2. Major Medical Coverage
3. Traditional Indemnity
4. Health Maintenance Organization (HMO)
5. Preferred Provider Organization (PPO)
6. Point-of-Service Organization (POS)
7. Medicare Supplemental Insurance
E. Alternatives
F. Where Can I Find Out More About It?
G. Questions and Answers
CHAPTER 21: Taxation of Individual Health Insurance Coverage
A. What Is It?
B. Business Uses
C. Tax Implications
1. Taxation of Health Insurance Premiums Paid for Individually-Owned Policies
2. Taxation of Health Insurance Benefits from Individually-Owned Policies
3. Taxation of Group Health Insurance – Employees
4. Taxation of Group Health Insurance – Employer
5. Taxation of Domestic Partnership Benefits
D. Alternatives
E. Where Can I Find Out More About It?
F. Questions and Answers
CHAPTER 22: Standard Provisions of Individual Disability Income Insurance
A. What Is It?
B. When Is the Use of This Tool Indicated?
C. Advantages
D. Disadvantages
E. Tax Implications
F. Design Features – Standard Provisions
1. Occupational Definitions and Applications
2. Benefit Period
3. Elimination Period
4. Benefit Amount
5. Renewability
6. Riders
G. Alternatives
H. Where Can I Find Out More About It?
I. Questions and Answers
CHAPTER 23: Taxation of Individual Disability Income Insurance
A. What Is It?
B. When Is the Use of This Tool Indicated?
C. Business Uses
D. Advantages
E. Disadvantages
F. Tax Implications
1. Disability Income Premium Payments
2. Disability Income Benefit Payments
3. Tax Credit for the Elderly and the Permanently and Totally Disabled
4. Gift, Estate, and Generation-Skipping Transfer Taxation
G. Alternatives
H. Where Can I Find Out More About It?
I. Questions and Answers
CHAPTER 24: Business Overhead Expense (BOE) Insurance
A. What Is It?
B. When Is the Use of This Tool Indicated?
C. Tax Implications
D. Design Features
1. Benefit Periods
2. Waiting Period
3. Maximum Benefits
4. Covered Operating Expenses
E. Alternatives
F. Where Can I Find Out More About It?
G. Questions and Answers
CHAPTER 25: Determining Coverage Needs and Selecting a Long-Term Care Policy Coverage Policy
A. What Is It?
B. Advantages
C. Disadvantages
D. Tax Implications
E. When Is the Use of This Tool Indicated?
F. How Do I Select the Best of Its Type?
1. Appropriateness of Coverage
2. Comparing and Selecting Policies
G. Alternatives
H. Where Can I Find Out More About It?
I. Questions and Answers
CHAPTER 26: Standard Provisions of Long-Term Care Insurance
A. What Is It?
B. When Is the Use of This Tool Indicated?
C. Advantages
D. Disadvantages
E. Design Features – Standard Provisions
1. Eligibility
2. Benefit Amount
3. Benefit Period
4. Elimination Period
5. Inflation Period
6. Benefit Triggers
7. Other Benefit Provisions
F. Alternatives
G. Where Can I Find Out More About It?
H. Questions and Answers
CHAPTER 27: Taxation of Long-Term Care Insurance
A. What Is It?
1. The Definition of “Qualified” Long-Term Care Insurance Contract
2. Disclosure Requirements for a Qualified Long-Term Care Insurance Contract
3. Definition of “Qualified Long-Term Care Services”
4. Definition of “Chronically Ill Individual”
B. Business Uses
C. Tax Implications
1. Qualified vs. Nonqualified Long-Term Care Contracts
2. Long-Term Care Insurance Premiums
3. Long-Term Care Insurance Benefits
4. Exchange of Long-Term Care Insurance Policies
5. Long-Term Care Insurance Owned by Self-Employed Individuals
6. Gift Tax Consequences of Long-Term Care Insurance
7. Estate Tax Consequences of Long-Term Care Insurance
8. Generation Skipping Transfer Tax Consequences of Long-Term Care Insurance
D. Design Features
E. Questions and Answers