Chapter 2 Flashcards
Key Term: An independent business operation given authority by a number of insurance companies to solicit business on behalf of such companies. Responsibilities include recruiting, training, and supervising agents.
Managing General Agent (MGA)
Key Term: Any party, other than the original named insured, identified as an insured in the policy declarations. An additional named insured has more rights under the policy than does an additional insured but also more responsibilities.
Additional Named Insured
Key Term: A fact that would affect a contract of insurance enough to influence and insurers decision regarding whether to accept or reject the risk or the premium to be set. Material facts must be disclosed by the applicant if asked about.
Material Fact
Key Term: Incorrect or missing information about a material fact that is offered or not by an applicant or insured with or without the intent to mislead.
Misrepresentation
Key Term: 1. In Law, a limitation of time within which legal action can be taken by a claimant
2. In insurance, the period of time in which a claim may be brought by the policyholder.
Prescription
Key Term: A civil court proceeding where each party must provide (i) all their knowledge, remembrance, information and belief concerning the matter in question; and (ii) the production of all documents in their possession or power relating to such matter.
Examination for discover
Key Term: A situation in which one party- for example, an employer- is held partly responsible for the unlawful actions of a third party, an employee. Vicarious liability can arise in situations where one party is supposed to be responsible for (and have control over) a third party, and is negligent in carrying out that responsibility and exercising that control
Vicarious Liability
Key Term: A provision in some insurance and reinsurance contracts covering only claims made during the term of the contract
Claims-Made Basis
Key Term: Insurance that does not participate until all other similar insurance on the same subject is exhausted, or until the loss exceeds a previously agreed-upon amount. Where there are two policies on a risk and both contain a provision that they are “excess to all other insurance,” the problem is resolved by the general “guiding principles”. This is usually interpreted so that each insurer contributes pro rata to the loss
Excess Insurance
Key Term: An agreed specified amount that the insured must pay on a claim before the insurance company will cover the rest of the claim. This amount is agreed upon by both the insurer and the insured.
Deductible
