Chapter 1 Flashcards
Acts as a legal representative of the insurance company
Agent/producer
Representative of the insured, doesn’t represent the insurance company.
Broker
Policy holder
Insured
Insurance company
Insurer
Agent, legal representative of the insurance company
Producer
The concept of making whole after a loss
Identification
Transfer of risk
Insurance
Covers pure risk but not speculative risk
Insurance
Mathematical concept, easy to predict losses based on historical data
Law of numbers
The chance or uncertainty of loss
Risk
The combined chance of loss with possibility of gain.
Speculative risk
Gambling is an example of what type of risk?
Speculative
Are speculative risks insurable?
No
What type of risk is the chance of loss with no possibility of gain.
Pure risk
Insurance is designed to protect against what type of risk?
Pure risk
What theory states that losses are more predictable as the number of insured increases?
Law of averages
A _______________ represents the insured.
A ________________ represents the insurers.
Broker, producer
The purpose of insurance is to ________________ by making the insureds whole, not to have the come out ahead.
Indemnify
The insurance industry is regulated are:
A. State level
B. Federal level
State level
