Chapter 1 General Insurance Flashcards
What is another name for Insurance Companies?
Insurers and Carriers
captive or independent organizations that recruit, contract with, train, and support insurance producers
Insurance Agencies
licensed individuals representing and appoint by an insurance company when transacting insurance business
Insurance Producers
person or entity that is covered by the insurer which covers losses due to loss of life, health, property, or liability
Insured
not necessarily the insured under the policy but who is responsible for paying the premium
Owner
National Association of Insurance Commissioners
NAIC
How is the insurance industry regulated?
Primarily on the state level
Who writes the state insurance laws?
Legislative Branch
Who is responsible for interpreting insurance laws?
Judicial Branch
Who enforces insurance laws?
Executive Branch
Owned by stockholders or shareholders. Directors and officers, which are elected by stockholders manage to carry out company mission. Policy Holders are NOT entitled to receive any dividends
Stock Insurance Company
Owned by policy holders. Board of trustees or directors are elected by policyholders to manage company mission. Policy holders MAY receive non taxable dividends if any surplus
Mutual Insurance Company
Group owned insurer whose main activity is risk sharing, they are unincorporated, formed by individuals, firms, and business corporations that exchange insurance on one another
Reciprocal Insurance Company
NOT an insurance company but consists of groups of underwriters called syndicates that each specialize in insuring a particular risk.
Lloyd’s of London
Primarily non-profit social organizations that engage in charitable and benevolent activities that provide life and health insurance to their members. Membership typically consists of members of a given faith, lodge, order, or society.
Fraternal Benefit Societies
Group owned insurer who primarily assume and spread liability-related risks of its members. Owned by policy holders, and are licensed in at least one state. Must have sufficient liquid assets to meet loss obligation.
IE: theme parks, go-cart tracks, or water slides
Risk Retention Groups (RRG)
Assume all financial risk faced without transferring that risk to an insurer. Generally an option only for large companies who may limit their risk by only self-insuring up to a certain dollar amount of risk and then acquiring insurance for dollar amounts in excess of that amount
Self Insurers
Minimizing the chance of a loss without eliminating the risk altogether is called _________.
Risk Reduction.
The ____ or _______ is the one looking to transfer some or all of the financial risk of loss it faces over to a reinsurer.
Ceding or Primary company
_________ is the intentional withholding of material facts pertinent to policy issue or rating, and may result in denial of coverage or void the policy.
Concealment
Refers to the jurisdiction (state or country) where and insurer is formed or incorporated
Domicile
An insurer organized under the laws of the state
IE: An insurer incorporated in Ohio is considered _____ to Ohio.
Domestic Insurer
An insurer organized under the laws of any other state, possession, territory, or the District of Columbia of the US.
IE: An insurer incorporated in Ohio is considered ______ to Kansas
Foreign Insurer
An insurer organized under the laws of any jurisdiction outside the US
IE: An insurer incorporated in Ontario, Canada, is considered _______ to Ohio.
Alien Insurer
