Basic Principles Flashcards
Mutal insurance company
Participating, policyholders participate in dividends
Divisible surplus
Earnings paid to policuownets as dividends after covering reserves, operating expenses and general business purposes
Pute assessment mutual Co.
Operates on the basis of loss sharing
Risk retention group
Or risk purchasing group only needs lic in One state but can insure members in any state
Fraternal benefit society
Must be nonprofit, have a lodge system, ritualistic, maintain a government consistent of elected representative officers
Lloyd’s of London
Not an insurance company; underwriting syndicate
Ceding company
Transfers risk to the reinsurer
Treaty. Reinsurance
Automatic sharing of risk
Captive insurer
An insurer established and owned by a parent firm for the purpose of insuring the parent firm’s loss exposure
Surplus lines
Non traditional insurance market.
1868 Paul v virginia
Attemp to regulate an ins. Co domiciled in another state
Carrer agencies
Branches of stock and mutual companies acontracted to rep an insurer in a specific area
1944 us v SE underwriters SEUA
Ins.industry is is subj to fed laws which conflict state…now interstate thus federal govt
1945 mccarran Ferguson act
State still regulates because. Pub intrst. Anti trust fed law not reg by state
1958 ftc intervention
Disallowing ftc
1958 sec
Fed sec laws still apply sec regs var. Life insurance
1970 fair cred rep act
Req fair and accurate reporting about consumers. Insurers must disclose investigations made after completion of application
1994 US Code Sections 1033 and 1054
No felonies conduct insurance business unless written authority by state of residence
1999 fin. Serv
Modernization act
Repealls glass steagall act. Commercial banks, inv. Banks, retail brokerages, and ins
Cos. Can now enter each other’s lines of business
2001 uniting and strengthening America by providing. Appropriate tools req. To intercept and obstruct terrorism act
Patriot actammends secrecy act. Efforts anti money laundering bank, fin, investment community
2003 do not call
Allows consumers telemarketing cant call
2010 patient protect act affordable care PPACA
Overhaul regulations and expansion of health insurance
Agent
Acts for another reg. Contracts
Apparently authority
The appearance or assumption of authority based on the principal’s actions words or deeds.
Rating service
Fin. Strength of insurers
Ferguson fine
10000
Fair credit fine
5000
