Chapter 1 and 2 LIGHTENING Flashcards
Who protects the insuring population by regulating all insurers and professionals doing business in the state?
State Commissioner, supervisor or director of insurance
What is a stock insurance company??
- Issues non participating policies
- owned by stockholders who received taxable corporate dividends as a return of profit
what type policy does a mutual insurance company issue? who owns it?
- issues participating policies
- owned by policyholders who receive non-taxable dividends as a return of unused premium
What is reinsurance??
Transfer of risk between insurance companies. reinsurer assumes some or all of the risk of the primary company
Domestic insurer organized under ???
Resident State
Foreign insurer organized under??
Laws of another state within the US
Alien insurer is organized by?
laws of a country outside the US
What can an admitted insurer do?
authorized to do insurance business in the state and is issued certificate of authority by state’s dept of insurance
Responsibilities of underwriting department
Responsible for selection of risks, to insure and determine rates to be charged
Whats an agent/producer do?
Can be employee of insurance company that owns the agent’s book of business or indpeendent agent that enters into agreements with more than one company. indepdent agent retains ownership of their books of business
What is express authority?
written into producer’s agency contract
what is implied authority?
public assumes the agent possess authority
what is apparent authority?
created when the agent exceeds express authority and the insurer does not respond
What does the Fair Credit Reporting Act do?
protects consumer privacy!! ensures any data collected remains confidential and is accurate and used for proper and specific purpose
What is the definition of RISK
uncertainty of a loss
what is the peril?
The cause of loss
What is a hazard?
something that increases the probability of loss
what are the three types of hazard?
physical, moral and morale
What is the principle of indemnity?
Does not allow insured to not profit from a loss! It restores the insured to same financial condition that existed prior to loss
When must insurable interest exist?
insurable interest in casualty and property insurance must exist at the time of loss
INSURANCE CONTRACT of adhesion!
one party prepares the contract and presents it to the second party who must accept it on a take it or a leave it basis
What’s the point of underwriting factors??
Used to determine premium! include nature of risk, hazards, claims history and other factors
What is an occurrence?
AN ACCIDENT! includes continuous or repeated exposure to the same general harmful conditions
Refund policy?
If an insurer cancels insurance policy before its expiration date, refund is made on a PRO RATE basis?
