Chapter 3- Insurance Co Organization/Regulation Flashcards
MUTUAL COMPANY
Insureds are also owners of the company. Can elect management/profits returned in form of dividends.
MUTUAL COMPANY-
Nonassessable premiums
Required to set money aside in case claims are higher than expected.
MUTUAL COMPANY-
Assessments
Primarily fire and windstorm. Charge members pro rata share of losses at end of each policy period.
RECIPROCAL
Member agrees to share with other members. They insure each other and share in losses. Managed by attorney in fact.
LLOYDS ASSOCIATION
Not insurance company.
Voluntary association of individuals or groups who agree to insure a certain percentage.
FRATERNAL BENEFIT SOCIETY
No capital stock Operated on lodge system Solely for members Not for profit Mainly life and health insurance
RISK RETENTION GROUPS
Manufacturers that establish group self insurance programs
Not allowed to write workers comp and personal lines
SELF INSURE
Risk of loss is borne without the benefit of insurance backing
Large companies can do this if they have the resources to back a loss
PRIVATE GOVERNMENT INSURERS
Covers things private insurers typically don’t:
Crops, war risk, nuclear energy, flood
Also called residual market insurance.
State level can provide unemployment and workers comp.
TYPES OF PROPERTY INSURANCE
dwelling Homeowners Commercial Property Inland Marine Ocean Marine Crime
TYPES OF CASUALTY INSURANCE
Aviation
Auto
Workers Comp
Surety bonds
LIABILITY RISK
Suffer financial lost as a result of our actions towards others.
Part of casualty insurance.
INSURANCE AGENT
Selling insurance
Issuing and countersigning policies
Collecting premiums
Link between insured and carrier
FIELD UNDERWRITING
Using pre-established criteria to seek out the type of business that is likely to be acceptable to the company.
SUSPENSE/DIARY SYSTEM
Alerts agent when it’s time to reassess risks for renewal.
