Basics Flashcards
To be an Insurable Risk…(5)
-Large # of similar expo
-Significant in scope
-Measurable
-Accidental
-Non-Catastrophic
Requirements for a legal contract (4)
- Age & Mental Capacity
-Legal Purpose
-Offer & Acceptance
-Consideration
Insurance Contract Special Elements (3)
-Unilateral
-Conditional
-Good Faith
Stock Insurance Company
Capital Stock
Mutual Insurance Company
Owned by policyholders
Reciprocal Insurance Exchange
Each member (subscriber) of association insures other members *USAA
Reciprocal Insurance- Attorney-in-fact
Solicit new members, pay losses, invest funds, assess premiums
Lloyd’s of London
Insure unusual and even speculative risk *Kim K body
Self-Insurers
Reserves to cover losses
Reinsurers
Insurance company “back up”
Automatic (Treaty) Reinsurance
ceding company is contractually bound to cede % of risk
Facultative Reinsurance
Reinsuring company decides weather to insure or reject
Excessive Loss Reinsurance
Primary insurer pays amount of each claim for each risk up to a limit determined in advance
Quota Share Reinsurance
primary insurer will pay when claim is over a certain amount
Domestic Insurer
Formed under the laws of NC
Foreign Insurer
Formed under another states laws
Alien Insurer
Formed under another countries laws
Admitted Insurer
Offered a Certificate of Authority from NCDOI to operate in NC
Indemnity Contract
Promises to pay amount = loss covered under policy
Reimbursement Contract
Reimburses expenses
Valued Contract
(State Value) insurer agrees to pay a specific amount no matter the loss
Adverse Selection
Risk has a greater than average chance of producing a loss
Estoppel
Party denies the consequences of its own actions
Libel
Form of personal injury communicated through material that cannot be seen
Pro-rata
Insurance company must return any advanced unused premium paid
