Insurers Flashcards
INSURER TYPE: Stock Companies
Owned by shareholders; Commercial insurer; writes HEALTH, LIFE, CASUALTY and/or PROPERTY.
INSURER TYPE: Mutual Companies
Owned by policyholders; dividends are unused premiums; can write HEALTH, LIFE, CASUALTY, and/or PROPERTY
INSURER TYPE: Fraternal Benefit Societies
Social nonprofits; voluntarily provide insurance only for their members; religious organizations and lodges (FOP)
INSURER TYPE: Reciprocal Insurers
Unincorporated groups of individuals pooling their money and paying out as needed. Controlled by an administrator or attorney.
INSURER TYPE: Lloyd’s
Individual underwriters who accept or reject risks offered to them. They invest money and risks that cannot get insurance in normal markets. i.e. Tina Turner‘s legs.
INSURER TYPE: Risk Retention group
Hospitals, manufacturers and municipalities insurance against commercial casualty. Alternative risk financing mechanism.
What is a PURCHASING GROUP
Entities that bundle similar businesses with similar exposures and buy insurance for them. Usually usually limited by state.
What defines a government plan?
Tax funded; serve, national, state, and social needs. Flood insurance.
Domestic, foreign, and alien insurer?
DOMESTIC: in state conducting business
FOREIGN: incorporated in one state, working in another
ALIEN: Incorporated outside of the USA
Name three rating services for insurance
AM Best
Moody’s
S&P
Fitch
Weiss
DISTRO: Agency Method
Indies agent sells multiple insurers
DISTRO: Exclusive/Captive Agent
Reps only one insurance company.
Commission paid
DISTRO: General/Managing General agent
EXCLUSIVE who trains and managers OTHERS in a geographic area.
DISTRO: Mass Marketing
Direct mail; vending; franchise; TV; internet; phone
DISTRO: Franchise Marketing
Coverages for employees of a small firm.
Not quite “group” but not quite “individual” policies issued to these people.
