Keywords/Basic Principles of Insurance Flashcards
calculates policy rates, reserves, and dividends
Actuarial Department
this insurer in the US is an insurer whose principal office and domiciled location is outside of the country
Alien Insurer
AKA Authorized insurer is an insurer who has received a certificate of authority from a state’s department of insurance authorizing them to conduct insurance business in that state
Admitted Insurer
represents themselves and the insured
Broker
an issuer established and owned by a parent firm for the purpose of insuring the parent firm’s loss exposure
Captive Insurer
a license issued to an insurer by a department of insurance (or equivalent state agency), which authorizes that company to conduct insurance business in that particular state
Certificate of Authority
Responsible for processing, investigating, and paying claims
Claims Department
the amount of earnings paid to policy owners as dividends after the insurance company sets aside funds required to cover reserves, operating expenses, and general business purposes
Divisible Surplus
an insurer with its principal or home office in a state where it is authorized
Domestic Insurer
an insurer with its principal office or domicile location in a state different from the state it is transacting insurance business
Foreign Insurer
nonprofit benevolent organizations that provide insurance to its members
Fraternal Benefit Society
Make up a specialized branch of the industry, primarily providing policies with small face amounts with weekly premiums. Other names for this include home service or debt insurers
Industrial Insurer
the transfer of risk through the pooling or accumulation of funds
Insurance
the customer receiving insurance protection under an insurance policy
Insured
the insurance company
Insurer
NOT an insurer, but a group of individuals and companies that underwrite unusual insurance
Lloyd’s of London
an insurance company or independent agent that provides a one-stop-shop for businesses or individuals seeking coverage for al their insurance needs. For example, many large insurers offer individual policies for automobile, home owner, long-term care, life, and health insurance needs
Multi-Line Insurer
insurance companies characterized by having no capital stock, being owned by its policy owners, and usually issue participating insurance
Mutual insurance company
AKA an unauthorized insurer is an insurer who has not received a certificate of authority from a state’s department of insurance authorizing them to conduct insurance business in that state
non-admitted insurer
typically issued by stock companies, do not allow policy owners to participate in dividends or electing the board of directors
non-participating policy
an insurance policy under which the policy owners share in the company’s earnings through receipt of dividends and also elect the company’s board of directors
participating plan
these companies are companies owned by private citizens or groups that offer one or more insurance lines. commercial insurers are NOT government-owned
private (commercial) insurer
an unincorporated organization in which all members insure one another
reciprocal insurer
the acceptance by one or more insurers of a portion of the risk underwritten by another insurer who has contracted for the entire coverage
reinsurance
a company that provides financial protection to insurance companies. these handle risks that are too large for insurance companies to handle on their own and make it possible for insurers to obtain more business than they would otherwise be able to
Reinsurer
a group-owned liability insurer which assumes and spread product liability and other forms of commercial liability risks among its members
risk retention group
establishes a self-funded plan to cover potential losses instead of transferring the risk to an insurance company
self insurers
an insurance company owned and controlled by a group of stockholders (or shareholders) whose investment in the company provides the safety margin necessary in the issuance of guaranteed fixed premium, non participating policies
stock insurance company
nontraditional insurance only available from a surplus lines insurer. They offer coverage for substandard or unusual risks not available through private or commercial carriers
Surplus Lines Insurance
the department within an insurance company responsible for reviewing applications, approving or declining applications, and assigning risk classifications
Underwriting department
