Assignment task: Tom who lives in Alberta recently won $8 million in a lottery. He has worked in a managerial capacity for the past 10 years with a small independent broker with 15 employees.
Tom is very enthusiastic about owning his own insurance brokerage company. He has excellent general business knowledge, together with very good insurance technical knowledge. He is also an avid skier, and is well connected with the ski resort Association of Alberta and British Columbia.
After acquiring a small brokerage that was up for sale, Tom starts exploring the possibility of expanding his operation. He contacts Avalanche Insurance company for a contract in order to place his business with them. Avalanche insures many ski resorts and other ski related facilities.
Avalanche's management meet with Tom to discuss his interest in placing business with them.
i) Describe and give reasons for two types of intermediary delivery systems, or types of agents that would be a suitable fit for Tom to adopt.
ii) Explain the type of contract Avalanche would expect Tom to sign.
iii) Assuming Avalanche agrees to have a contract with Tom, what sort of intermediary responsibilities would be laid out in the agreement for Tom to follow?
iv) Tom wants Avalanche to give him binding authority on risks, if in agreement, outline some of the guidelines Avalanche is likely to impose on Tom, and describe the procedures Tom would have to follow.