Unverified Domain 1: Insurance Company Functions and Organization
Official IC-90 domain names are unverified; this section covers insurance company functions and organization, a standard topic in insurance operations exams. ### Line and staff functions Insurers divide work into line functions that directly generate or manage risk-product development, underwriting, claims, actuarial, marketing, sales, and investments-and staff functions that support them, including finance, IT, human resources, legal, and compliance. Underwriting and claims should sit in separate reporting lines to preserve checks and balances; combining them can create incentives to deny valid claims or accept poor risks. Centralization improves consistency and scale for routine work; decentralization improves speed and local knowledge for complex or niche business. ### Worked example A mid-sized insurer wants to launch a cyber endorsement in 90 days. Product development drafts the form; actuarial prices the risk and sets reserves; underwriting writes guidelines and authority limits; claims builds settlement protocols; legal and compliance file the form and check unfair trade practice rules; IT updates policy administration; marketing prepares distribution materials. Missing any function delays launch or creates a compliance breach. The reasoning: each function owns a control point in the product lifecycle, so handoffs must be sequenced. ### Traps Candidates confuse line and staff roles, assume underwriting reports to claims, or ignore regulatory filing. Another trap is treating centralization as always better; it is not for niche products. ### Key points - Line functions produce or manage risk; staff functions support them. - Keep underwriting and claims in separate reporting lines. - Centralize routine work; decentralize complex or local work. - Product launches require sequenced handoffs across actuarial, legal, IT, and claims.