Chapter 1 Flashcards
Actuarial Department
This is the department that calculates policy rates, reserves, and dividends.
Adjuster
This is the person who investigates claims and arranges for them to be settled or denied.
What is an Alien Insurer?
An insurer whose principal office and domicile location is outside of the United States.
What is an Admitted Insurer?
An insurer who has received a certificate of authority from a state’s Department of Insurance which authorizes them to conduct insurance business in that state.
What is an Agent in insurance?
An individual or organization that’s authorized to solicit, sell, and transact (bind) coverage for specific insurance providers under the terms of one or more agent contracts.
What is an Authorized Insurer?
An admitted insurer.
What is a Broker?
A person who represents himself and the insured (i.e., the client or customer) and cannot bind coverage on behalf of an insurance carrier.
What is a Captive Insurer?
An insurer that’s established and owned by a parent firm for the purpose of ensuring the parent firm’s loss exposure.
What is a Certificate of Authority?
A license that’s issued to an insurer by an insurance department (or equivalent state agency) that authorizes that company to conduct insurance business in that particular state.
What is the Claims Department?
The department that’s responsible for processing, investigating, and paying claims.
What is Divisible Surplus?
The amount of earnings that are paid to policy owners as dividends after the insurance company sets aside funds required to cover reserves, operating expenses, and general business purposes.
What is a Domestic Insurer?
An insurer with its principal or Home Office in the state in which it’s authorized.
What is a Foreign Insurer?
An insurer whose principal office or domicile location is in a state that’s different from the state in which it’s transacting insurance business.
What is a Fraternal Benefit Society?
A non-profit benevolent organization that provides insurance to its members.
What is an Independent Insurance Agency?
An agency that represents any number of insurance companies through contractual agreements.
What is Insurance?
The transfer of risk through the pooling or accumulation of funds.
Who is the Insured?
The customer who receives insurance protection under an insurance policy.
What is an Insurer?
An insurance company.
What is Lloyds of London?
A group of individuals and companies that underwrite unusual insurance policies, not an insurer.
What is the Marketing Division?
The division responsible for acquiring prospective applicants through various advertising media.
What is a Monoline Insurer?
An insurance carrier that only sells one line of insurance.
What is a Multi-line Insurer?
An insurance company or independent agent that provides a ‘one-stop-shop’ for businesses or individuals seeking coverage for all insurance needs.
Large insurers often provide individual policies for automobile, homeowner’s, long-term care, life, and health insurance needs.
What is a Mutual Insurance Company?
An insurance company characterized by having no capital stock, being owned by their policy owners, and typically issuing participating insurance.
What is a Non-Admitted (Unauthorized) Insurer?
An insurer that has not received a certificate of authority from a State’s Department of Insurance to conduct insurance business in that state.
What is a Nonparticipating Policy?
A policy typically issued by stock companies that doesn’t allow policy owners to participate in dividends or elect the board of directors.
What is a Participating Policy?
An insurance policy that pays policy dividends to policy owners, allowing them to share in the company’s divisible surplus and elect the company’s board of directors.
What is a Personal Producing General Agency (PPGA)?
An agency that represents one or more specific insurers. A PPGA does not recruit, train, or supervise career agents.
Who is the Policy Owner?
The person responsible for the payment of premiums and who possesses all ownership rights of the contract. Typically, the policy owner is also the insured.
What is a Private (Commercial) Insurer?
An insurer owned by private citizens or groups that offers one or more insurance lines. Commercial insurers are not government-owned.
Who is a Producer?
An individual licensed by one or more states to sell, solicit, or transact insurance in a given state.
Who is the Proposed Insured?
The person whose life will be covered by an insurance policy.
What is a Public Adjuster?
A person who acts on behalf of a consumer settling an insurance claim.
What is a Reciprocal Insurer?
An unincorporated organization in which all members insure one another, managed by an attorney-in-fact.
What is Reinsurance?
The acceptance by one or more insurers (reinsurers) of a portion of the risk being underwritten by another insurer that has contracted with a consumer.
What is a Reinsurer?
A company that provides financial protection to insurance companies, handling risks that are too large for them to cover on their own.
What is a Risk Retention Group?
A group-owned liability insurer that assumes and spreads product liability and other forms of commercial liability risks among its members.
What does the Sales Department do?
Acquires clients through one-on-one meetings in which consumers complete applications.
What is a Self-Insurer?
A company that establishes a self-funded plan to cover potential losses instead of transferring the risk to an insurance company.
Who are Service Representatives?
Customer service employees who are not required to obtain a license because they neither sell nor solicit coverage, and they don’t bind coverage.
What are solicitors?
These are the individuals who solicit and schedule sales meetings between consumers and the producers for whom they work.
Some states separately licensed these individuals.
What is a Stock Insurance Company?
This is an insurance company that’s owned and controlled by a group of stockholders (or shareholders) whose investment in the company provides the safety margin necessary in the insurance of guaranteed, fixed premium, nonparticipating policies.
What is Surplus Lines Insurance?
This is non-traditional insurance that’s only available from a surplus lines insurer.
This type of insurance provides coverage for substandard or unusual risks and is not available through private or commercial carriers.
What is an Unauthorized Insurer?
This is a non-admitted insurer.
What is the Underwriting Department?
This is the department within an insurance company that’s responsible for reviewing applications, approving or declining applications, and assigning risk classifications.
