Chapter 1 - Basic Principles of Life and Health Insurance Flashcards
What does the Actuarial Department do?
Calculates policy rates, reserves, and dividends.
Who is an Adjuster?
A person who investigates claims and arranges for them to be settled or denied.
Define Alien Insurer.
An insurer whose principal office and domicile location is outside the United States.
What is an Admitted Insurer?
An insurer that has received a certificate of authority from a state’s department of insurance.
What role does an Agent play?
Authorized to solicit, sell, and transact coverage for specific insurance providers.
What is another term for Authorized Insurer?
Admitted insurer.
What is the main function of a Broker?
Represents himself and the insured, cannot bind coverage on behalf of an insurance carrier.
Define Captive Insurer.
An insurer established and owned by a parent firm for insuring the parent firm’s loss exposure.
What is a Certificate of Authority?
A license issued to an insurer by an insurance department authorizing it to conduct business in a state.
What does the Claims Department do?
Responsible for processing, investigating, and paying claims.
What is Divisible Surplus?
The amount of earnings paid to policy owners as dividends after setting aside required funds.
Define Domestic Insurer.
An insurer with its principal or home office in the state where it is authorized.
What is a Foreign Insurer?
An insurer whose principal office is in a different state from where it transacts business.
What is a Fraternal Benefit Society?
A non-profit organization that provides insurance to its members.
What characterizes an Independent Insurance Agency?
Can represent multiple insurance companies through contractual agreements.
Fill in the blank: Insurance is the transfer of risk through the _______.
pooling or accumulation of funds.
Who is referred to as the Insured?
The customer who receives insurance protection under an insurance policy.
What is the role of an Insurer?
An insurance company.
What is Lloyds of London?
A group of individuals and companies that underwrite unusual insurance policies.
What does the Marketing Division do?
Responsible for acquiring prospective applicants through advertising media.
Define Monoline Insurer.
An insurance carrier that only sells one line of insurance.
What is a Multi-Line Insurer?
An insurance company providing coverage for various insurance needs.
What characterizes a Mutual Insurance Company?
Owned by policy owners, issues participating insurance, no capital stock.
Define Non-Admitted (Unauthorized) Insurer.
An insurer without a certificate of authority from a state’s department of insurance.
