Basic Principles Flashcards
Actuarial department
Calculates policy rates, reserves, and dividends.
Alien Insurer
In the United States is an insurer whose principal office and domiciled location is outside the country.
Admitted Insurer/Authorized Insurer
Is an insurer who has received a certificate of authority from a state’s department of insurance authorizing them to conduct insurance business in that state.
Broker
Represents themselves and the insured.
Captive Insurer
Is an insurer established and owned by a parent firm for the purpose of insuring the parent firms loss exposure.
Certificate of Authority
Is a license issued to an insurer by a department of insurance, which authorizes that company to conduct insurance business in that particular state.
Claims Department
Is responsible for processing, investigating, and paying claims.
Divisible Surplus
Is the amount of earnings paid to policyowners as dividends after the insurance company sets aside funds required to cover reserves, operating expenses, and general business.
Domestic Insurer
Is an insurer with it’s principal or home office in a state where it is authorized.
Foreign Insurer
Is an insurer with its principal or home office in a different state where it is transacting business.
Fraternal Benefit Society
Are a non-profit benevolent organization that provide insurance to it’s memebers.
Industrial Insurer
Make up a specialized branch of industry, primarily providing policies with small face amounts with weekly premiums.
Lloyds of London
Is NOT an insurer, but a group of companies that underwrite unusual insurance.
Multi-line Insurer
Is an insurance company or independent agent that provides a one-stop-shop for business or individuals seeking coverage for all their insurance needs.
Mutual Insurance Company
Are insurance companies characterized by having no capital stock, being owned by it’s policy owners, and usually issue participating insurance.
Non-Admitted Insurer
Is an insurer who has not received a certificate of authority from a states department of insurance authorizing them to conduct insurance business in the state.
Nonparticipating Policy
Typically issued by stock companies, do not allow policy owners to participate in dividends or electing the board of directors.
Participating Plan
Is an insurance policy under which the policy owners share in the company’s share in the earnings through receipt of dividends and also elect the company’s board of directors.
Private Insurer
Are Companies owned by private citizens or groups that offer one or more insurance lines.
Reciprocal Insurer
Is an unincorporated organization in which all members insure one another.
Reinsurance
Is the acceptance by one or more insurers, called reinsurers, of a portions of the risk underwritten by another insurer who has contracted for the entire coverage.
Reinsurer
Is a company that provides financial protection to insurance companies. Reinsurers handle risks that are too large for insurance companies to handle on their own and make it possible for insurers to obtain more business they would other wise be able to
Risk Retention Group
Is a group-owned liability insurer which assumes and spread product liability and other forms of commercial liability risks among it’s members.
Self-Insurers
Are people who establishes a self-funded plan to cover potential losses instead of transferring the risk to an insurance company.
Stock Insurance Companies
Is an insurance company owned and controlled by a group of stock holders/share owners whose investment provides the safety margin necessary in the issuance of guaranteed, fixed premium, non-participating policies.
Surplus Lines Insurance
Is a nontraditional insurance only available from a surplus line insurer. They offer coverage for substandard or unusual risks available through private or commercial carriers.
Underwriting Department
Is the department within an insurance company responsible for reviewing applications, approving or declining applications and assigning risk classifications.
