Basic Principles Of Life & Health Insurance & Annuities

Question 1

Calculates policy rates, reserves, and dividends

Answer 1

Actuarial Department

Question 2

An insurer whose principal office and domiciled location is outside the country

Answer 2

Alien Insurer

Question 3

(AKA authorized issurer) who has received a certificate of authority from a state’s department of insurance authorizing them to conduct insurance business in that state

Answer 3

Admitted Insurer

Question 4

Represents themselves and the insured

Answer 4

Broker

Question 5

An insurer established and owned by a parent firm for the purpose of insuring the parent firm’s loss exposure

Answer 5

Captive Insurer

Question 6

A license issued to an insurer by a department of insurance, which authorizes that company to conduct insurance business in that particular state

Answer 6

Certificate of Authority

Question 7

Responsible for processing, investigating, and paying claims

Answer 7

Claims Department

Question 8

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 purposes

Answer 8

Divisible Surplus

Question 9

An insurer with its principal office or domicile location in a state different from the state it is transacting insurance business

Answer 9

Foreign Insurer

Question 10

Nonprofit benevolent organizations that provide insurance to its members

Answer 10

Fraternal Benefit Society

Question 11

Make up a specialized branch of the industry, primarily provided in policies with small face amounts with weekly premiums. (AKA home service and debit insurance)

Answer 11

Industrial Insurer

Question 12

The transfer of risk through the pooling or accumulation of funds

Answer 12

Insurance

Question 13

The customer receiving insurance protection under insurance policy

Answer 13

Insured

Question 14

The insurance company

Answer 14

Insurer

Question 15

NOT an insurer, but a group of individuals and companies that underwrite unusual insurance

Answer 15

Lloyd’s of London

Question 16

An insurance company or independent agent that provides a one-stop-shop for businesses or individuals seeking coverage for all their insurance needs.

Answer 16

Multi-Line Insurer

Question 17

Insurance companies characterized by having no capital stock, being owned by its policy owners, and usually issue participating insurance

Answer 17

Mutual Insurance Company

Question 18

(AKA unauthorized Insurer) An insurer who has not received a certificate of authority from a state’s department of insurance authorizing them to conduct insurance business in that state

Answer 18

Non-Admitted Insurer

Question 19

Typically issued by stock companies and do not allow policyowners to participate in dividends or electing the board of directors

Answer 19

Nonparticipating Policy

Question 20

An insurance policy under which the policyowners share in the company’s earnings through receipt of dividends and also elect the company’s board of directors

Answer 20

Participating Plan

Question 21

Companies owned by private citizens or groups that offer one or more insurance lines. NOT government owned

Answer 21

Private (Commercial) Insurer

Question 22

An unincorporated organization in which all members ensure one another

Answer 22

Reciprocal Insurer

Question 23

The acceptance by one or more insurers, called reinsurers, of a portion of the risk underwritten by another insurer who has contracted for the entire converage

Answer 23

Reinsurance

Question 24

A company that provides financial protection to insurance companies. They 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

Answer 24

Reinsurer

Question 25

A group-owned liability insurer that assumes and spreads product liability and other forms of commercial liability risks among its members

Answer 25

Risk Retention Group

Question 26

Establishes a self-funded plan to cover potential losses instead of transferring the risk to an insurance company

Answer 26

Self-Insurers

Question 27

An insurance company owned and controlled by a group of stockholders (or shareholders) whose investment in the company provides the safety margin necessary in the issuance of guaranteed, fixed premium, nonparticipating policies

Answer 27

Stock Insurance Company

Question 28

Non-traditional insurance only available from a surplus lines insurer. They offer coverage for substandard or unusual risks not available through private or commercial carriers

Answer 28

Surplus Lines Insurance

Question 29

The department within an insurance company responsible for reviewing applications, approving or declining applications,andd assigning risk classifications

Answer 29

Underwriting Department

Question 30

An insurer with its principal home office in a state where it is authorized

Answer 30

Domestic Insurer