General Insurance (CH 2)

Question 1

Reciprocal organization;

Assessment insurer

Answer 1

an unincorporated group of individuals with each party insuring the other members.
Each member is known as a subscriber.

Question 2

Risk retention groups

Answer 2

usually set up by its members to only provide certain types of liability insurance protection, specifically for individuals who engages in similar activities or businesses.

Question 3

Fraternal benefit societies

Answer 3

• Life insurance companies that exist as social organizations.
• Distinguished by the fact that their membership is usually drawn from those who are members of the lodge or fraternal organization.
• Sell participating policies just as mutual companies, pay insurance dividends to the policyowner.
• Different than stock or mutual companies in that fraternal society may be assessed additional funds if there is not enough money available to pay claims.

Question 4

Reinsurance

Answer 4

A form of insurance between insurers.

Two types:
Treaty- pre-negotiated agreement
Facultative- case-by-case basis

Question 5

Lloyd’s Associations

Answer 5

groups of individuals whop band together to assume risks in the area of surplus lines.
-Each person is responsible for the share of the risk he agrees to assume.

Question 6

Government Insurers

Answer 6

a form of social insurance provided to those who would otherwise be unable to afford it.

Question 7

Four parts of a contract:

Answer 7

• Consideration
• Offer
• Acceptance of the Offer
• Legal Purpose and Legal Capacity