Principles Of Insurance Flashcards
The transfer of risk through the pooling or accumulation of funds
Insurance
The customer receiving insurance protection under an insurance policy
Insured
Insurer
The insurance company
A group of individuals and companies that underwrite unusual insurance
Lloyds of London
In the business of selling insurance for a profit
Commercial insurers
These companies are called nonparticipating insurers
Stock companies
These companies are called participating insurers and they are owned by their policyholders
Mutual companies
The federal government will not exercise its right to regulate the insurance industry if it’s being effectively and adequately regulated on the state level
1945 McCarran Ferguson Act
Provides individuals privacy protection and requires insurance companies to notify applicants of investigations
1970 Fair Credit Reporting Act
Should an insurer be financially unable to pay its claims, the _____ will step in and cover the consumers’ unpaid claims up to a specific amount
State Guaranty Association
The financial strength and stability of an insurance company
Solvency
Dividends from a stock insurer are subject to _____ because they are considered profit
Taxation
Dividends from a mutual insurer are _____ because they are considered to be a return of premium
Not subject to taxation
