Basic Principles of Insurance Flashcards
Actuarial Department
The actuarial department calculates policy rates, reserves, and dividends.
Insurance Reserve
An insurance reserve is an estimate of what an individual claim will cost, and that amount of money is set aside(or reserved) in order to pay that claim.
Dividends
“Return of Premium” means that if your insurer had an overall good year, it will give you back part of your premium you paid for your insurance policy.
Alien Insurer
An Alien Insurer is when a company provides insurance to a country other than its own country of domicile (dwelling place).
Admitted Insurer
An admitted insurer is when an insurer has been approved by that state’s department to conduct insurance business in that state.
Broker
A Broker represents themselves and the insured (i.e. client or customer)
Captive Insurer
A Captive Insurer is an insurance company set up by the business owner to insure his/her own business
Certificate of Authority
Is a license given to the insurer by the department of insurance, which authorizes that company to conduct insurance business in that state.
Claims Department
The Claims Department is responsible for processing, investigating, and paying the claims.
Divisible Surplus
Divisible Surplus is the amount of earnings given to the policyholders as dividends after the insurance company sets asides funds to cover reserves, operating expenses and general business purposes.
Policyholder
A Policyholder is a person or group whose name is on the insurance policy
Insurance Policy
An Insurance Policy is a contract between the insurer and the insured. The policy could be coverages such as: (Life, Health etc.) , the restrictions that apply, and the deductibles and premiums.
Domestic Insurer
Domestic Insurer is an insurance company that of which the home office is in the state where it is authorized.
Foreign Insurer
Foreign Insurer is an insurance company where the home office is located in one state, but also provides insurance to another state.
Claim
A Claim is made after an incident occurs. Usually when you make a claim, property has been damaged or you have been injured. You can only make a claim that is caused by one of the perils listed on your policy.
