Chapter 1 Flashcards

1
Q

Actuarial department:

A

The actuarial department calculates policy rates, reserves, and dividends.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Alien Insurer:

A

An Alien Insurer in the United States is an insurer whose principal office and domiciled location is outside the country.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Admitted Insurer:

A

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.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Broker:

A

A Broker represents themselves and the insured (i.e., the client or customer). They work for customer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Captive Insurer:

A

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)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Certificate of Authority:

A

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.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Claims Department:

A

The claims department is responsible for processing, investigating, and paying claims.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Divisible Surplus:

A

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.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Domestic Insurer:

A

A Domestic Insurer is an insurer with its principal or home office in a state where it is authorized.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Foreign Insurer:

A

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.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Fraternal Benefit Society:

A

Fraternal Benefit Societies are nonprofit benevolent organizations that provide insurance to its members.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Industrial Insurer:

A

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.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Insurance:

A

The transfer of risk through the pooling or accumulation of funds.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Multi-line Insurer:

A

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.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Mutual Insurance Company AKA Participating:

A

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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Non-admitted Insurer:

A

A non-admitted or unauthorized insurer is 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.

16
Q

Nonparticipating policy:

A

A nonparticipating insurance policy, typically issued by stock companies, do not allow policyowners to participate in dividends or electing the board of directors.

17
Q

Participating Plan:

A

A participating plan is 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.

18
Q

Private (Commercial) Insurer:

A

Private or commercial insurance companies are companies owned by private citizens or groups that offer one or more insurance lines. Commercial insurers are NOT government-owned

19
Q

Reinsurance:

A

Reinsurance is 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 coverage.

20
Q

Risk Retention Group:

A

RRGs allow businesses with similar insurance needs to pool their risks and form an insurance company that they operate under state regulated guidelines

21
Q

Self-Insurers:

A

A self-insurer establishes a self-funded plan to cover potential losses instead of transferring the risk to an insurance company.

22
Q

Stock Insurance Company:

A

A stock company is 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.

23
Q

Surplus Lines Insurance

A

Surplus Lines Insurance is nontraditional insurance only available from a surplus lines insurer. They offer coverage for substandard or unusual risks not available through private or commercial carriers

24
Q

Underwriting Department:

A

The underwriting department is the department within an insurance company responsible for reviewing applications, approving or declining applications, and assigning risk classifications

25
Q

Death Benefit, AKA…

A

Face Amount