Overview of Insurance Operations Flashcards
Proprietary insurer
Insurer formed for the purpose of earning a profit for its owners
Mutual insurer
An insurer that is owned by its policyholders and formed as a corporation for the purpose of providing insurance to them
Reciprocal insurance exchange (interinsurance exchange)
An insurer owned by its policyholders, formed as an unincorporated association for the purpose of providing insurance covereate to its members (called subscribers), and managed by an attorney-in-fact. Members agree to mutually insure each other, and they share profits and losses in the same proportion as the amount of insurance purchased from the exchange by that member
Fair Acces to Insurance Requirements (FAIR) plans
An insurance pool through which private insurers collectively address an unmet need for property insurance on urban properties, especially those susceptible to loss by riot or civil commotion
Residual market
The term referring collectively to insurers and other organizations that make insurance available through a shared risk mechanism to those who cannot obtain coverage in the admitted market
Surplus lines broker
A person or firm that places business with insurers not licensed (non admitted) in the state in which the transaction occurs but that is permitted to write insurance because coverage is not available through standard market insurers
Independent agency and brokerage marketing system
An insurance marketing system under which producers (agents or brokers), who are independent contractors, sell insurance, usually as representatives of several unrelated insurers
Direct writer marketing system
An insurance marketing system that uses sales agents (or sales representatives) who are direct employees of the insurer
Exclusive agency marketing system
An insurance marketing system under which agents contract to sell insurance exclusively for one insurer (or for an associated group of insurers)
Distribution channel
The channel used by the producer of a product or service to transfer that product or service to the ultimate customer
