Chapter 1 Flashcards
Actuarial department:
The actuarial department calculates policy rates, reserves, and dividends.
Alien Insurer:
An Alien Insurer in the United States is an insurer whose principal office and domiciled location is outside the country.
Admitted Insurer:
An admitted or 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:
A Broker represents themselves and the insured (i.e., the client or customer). They work for customer
Captive Insurer:
A Captive Insurer is an issuer established and owned by a parent firm for the purpose of insuring the parent firm’s loss exposure. (Similar to RRG but for various types of risks)
Certificate of Authority:
A Certificate of Authority is a license issued to an insurer by a department of insurance (or equivalent state agency), which authorizes that company to conduct insurance business in that particular state.
Claims Department:
The claims department is responsible for processing, investigating, and paying claims.
Divisible Surplus:
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 purposes.
Domestic Insurer:
A Domestic Insurer is an insurer with its principal or home office in a state where it is authorized.
Foreign Insurer:
A Foreign Insurer is an insurer with its principal office or domicile location in a state different from the state it is transacting insurance business.
Fraternal Benefit Society:
Fraternal Benefit Societies are nonprofit benevolent organizations that provide insurance to its members.
Industrial Insurer:
Industrial Insurers make up a specialized branch of the industry, primarily providing policies with small face amounts (usually $1000 to $2000) with weekly premiums. Other names for industrial insurers include home service or debit insurers.
Insurance:
The transfer of risk through the pooling or accumulation of funds.
Multi-line Insurer:
A multi-line insurer is an insurance company or independent agent that provides a one-stop-shop for businesses or individuals seeking coverage for all their insurance needs. For example, many large insurers offer individual policies for automobile, homeowner, long-term care, life, and health insurance needs.
Mutual Insurance Company AKA Participating:
Mutual Insurance Companies are insurance companies characterized by having no capital stock, being owned by its policy owners, and usually issue participating insurance.
