Basic principles of insurance Flashcards
actuarial department
calculates policy rates, reserves and dividends
alien insurer
principal office domiciled location outside country
admitted insurer
authorized insurer is an insurer who has received a cert of auth from the states department of insurance authing to conduct business in that state
broker
represents themselves and the insured
captive insurer
issue established and owned by a parent firm for the purpose of the insuring the parents firm’s loss exposure
certificate of authority
license issued to an insurer by a department of insurance, which authorizes that company to conduct insurance business in that particular state
claims department
responsible for processing, investigating and paying claims
divisible surplus
amount of earnings paid to policyowners as dividends after the insurance company sets aside funds required to cover reserves, operating expenses, and general business purposes
domestic insurer
principal home office in state where it is auth
foreign insurer
principal office or domicile location in a state different from the state it is transacting insurance business
fraternal benefit society
nonprofit benevolent organizations that provide insurance to it’s members
industrial insurer
special branch of industry, policies with small face amounts with weekly premiums. home service or debit insurers
insurance
the transfer of risk through the pooling or accumulation of funds
insured
the insured is the customer receiving insurance protection under an insurance policy
insurer
the insurer is the insurance company
lloyds of london
not an insurer but a group of individuals and company’s that that underwrite unusual insurance
multi-line insurer
independent agent that provides a one-stop-shop for a businesses or individuals seeking for all their insurance needs
mutual insurance company
no capital stock being owned by its policy owner, usually issue participating insurance
non admitted insurer
a non admitted or unauth insurer is an insurer who has not received a cert of auth from a state’s department of insurance authing them to conduct insurance business in that state
nonparticipating policy
issued by stock companies do not allow policymakers to participate in dividends or electing the board of directors
participating plan
under the policyowners share in the company’s earnings through receipt of dividends and also elect the company’s board of directors
private (commercial) insurer
companies owned by private citizens or groups that offer one or more insurance lines, not government-owned
reciprocal insurer
unincorporated organization in which all members insure one another
reinsurance
acceptance by one or more insurers of a portion of the risk underwritten by another insurer who has contracted for the entire coverage
reinsurer
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 than they would otherwise be able to
risk retention group
group owned liability insurer which assumes and spread product liability and other forms of commercial liability risks among its members
self-insurers
self funded plan to cover potential losses instead of transferring the risk to an insurance company
stock insurance company
owned and controlled by a group of stockholders whose investment in the company provides the safety margin necessary in the issuance of guaranteed, fixed premium, nonparticipating policies
surplus lines insurance
nontraditional insurance only available from surplus lines insurer. offer coverage for substandard or unusual risks not available through private or commercial carriers
underwriting department
department within an insurance company responsible for reviewing applications approving or declining applications, and assigning risk classifications
