Quick notes 3 Flashcards
California Insurance Code
- body of laws governing insurance business in this state
Commissioner
- Enforces the law.
Legislature
- Makes the law.
Key Person =
vice president
Policy + Application =
Entire contract
Peril –
Chance of loss occurring
Pure Risk –
Insurable, chance of loss without possibility of gain
Speculative Risk –
Uninsurable, chance of loss / gain (example: Casino)
Peril –
cause of loss
Hazard –
Increase chance of loss
Moral Hazard –
Mental attitude / behavior (example: dishonest, fraudulent)
Morale Hazard –
human carelessness, irresponsibility, or reckless
Physical Hazard -
smoking
Deferred Annuity (2 stages)
- AccumulationPeriod(payin)
- Annuity(payout)
Indemnity –
Make as whole again, restore financial status to the position they were in prior loss
Fiduciary –
handling money
Legal -
Based on court decision
Group insurance –
no medical needed
Individual –
Insurance
requires medical information.
Law of larger #s –
the larger the # the more predictable the loss
- Used to predict losses to establish rates
- Benefits the insured
- Mortality & Morbidity tables are based
Mortality –
life expectancy
Morbidity –
Illness or disability
MGA –
5% POLICYHOLDER SURPLUS
Balancing preferred & poor risk –
profitable distribution of exposures
Aleatory –
benefit paid contingent upon a future claim
ESOP Employee Stock Ownership Plan
– pension plan, company stocks to employees
Representation –
Statements made at time of application
Consideration =
Exchange of values, applicant money, company offer life insurance
Transacting Insurance:
NETS (Negotiations, Execution, Transaction, Solicitation)
Term:
offers protection only, no cash value.
TSA (403b)-
taxable upon withdrawal
Tax Sheltered Annuities-
before tax contribution. Offered to public teachers, non-profit organization.
Traditional IRA-
contribution/interest earned are TAXABLE.
Roth Ira-
withdrawal prior age 59 1⁄2 is not taxed nor penalty. May withdraw at any time.
Keogh Plan –
for self employed, soleprop,
Conditional receipt –
obligates ins company to pay death claims. 3 conditions met: 1st premium, lab work is done, and all statements in the application are true and correct.
Binding Receipt-
guarantees coverage after initial premium is paid
Endowment –
Life ins. plan where insured receives face amount if they live until the end of the specified period, if die prematurely beneficiaries receives the face amount.
Life license 24 hrs CE course;
Health – 24 hrs CE; Life & Health – 24 hrs
Annuity CE Req
8 hrs initially; 4 hrs renewal
3 branches of gov’t:
Legislative – enacts laws
Judicial – makes decisions
Executive – makes rulings; exercises judicial powers
Classification of Insurers:
- Admitted complied with all requirements by DOI; receives certificate of authority for every class of insurance, can be domestic, foreign, or alien
Non-admitted – has not applies, denied
- Domestic, Foreign or alien
Domestic – organized under the laws of State of CA, can be admitted or non- admitted
Foreign – another State, can be admitted or non-admitted
Alien – Outside the US
Blanket Policy:
insured are not individually identified on the policy; rather it insures the entire class (Blanket Health Insurance Coverage).
Types of Insurers:
1.Stock Insurance (Nonparticipating) - making profit for the stockholders. Stock co. sells shares to raise money, later company will share profit thru dividends to
stock holders not policy holders thus nonparticipating
2. Mutual Insurance – No stockholders, instead owners are the policyholders, this type is participating, company pay policy dividends
3. Fraternal Ins. Co. Known for their social, charitable activities. Sells insurance to members only
4. Captive Insurer, group of affiliated org. forms
CLHIGA –
protection policyholders of life health annuities
Basic coverage benefits:
80%, 250k per life and up to 100k cash value
Discontinuance of Group Life & Disability
Discontinuance of Group Life & Disability
CHLIGA-
Life & Health
CIGA –
Prop & Casualty
ACCIDENT & HEALTH REVIEW
Social Insurance System-Old, Age, Survivor, Disability, & Health Ins(OASDHI)
1) Retirementbenefitsfortheelderly
2) Survivorshipbenfordepof deceased workers
3) Disability
4) Medbenefitforelderly-medicare
Classification of Status:
- FullyInsured:1QCage21until61or yr before you die or yr before disability
- Disability Ins: 20 QC during last 10 yrs and you’re fully insured
- CurrentlyIns:Atleast6SScredits during last 13 qtr ending calendar qtr she died, entitles disability or retirement benefits
Blackout Period:
Widow/Widower receives income until youngest reaches age 16, then benefit ceases (blackout period) Until widow reach age 60
Widow will recd full retirement at age 65
OASDHI Benefits
- Retirement
- SurvivorBenefits
- Disability Benefits: Total & Permanent. Waiting Period 5 months, Check will be on the 6th month
- Medicare: Helps cost of health care, does not cover all med expenses or LTC
Part A paid FICA payroll tax 1.45+1.45
Medicare 4 Parts
Part A-Hosp patient care, hospital insurance, SNF, some HH and Hospice. SS credits 40 calendar quarters-fully insured.
Part B- Pays Doctor services such as: outpatient or urgent care, outpatient physical/speech therapies, ambulance, medical equipment/supplies, and medical services not paid from Part A. Optional, everyone must pay monthly premium
Part C- Managed Care. Must continue to pay Part B to enroll Managed Care, provided by commercial companies
Part D- Medications prescribe for treatments is optional and pays premium.
Part A-
Hosp patient care, hospital insurance, SNF, some HH and Hospice. SS credits 40 calendar quarters-fully insured.
Part B-
Pays Doctor services such as: outpatient or urgent care, outpatient physical/speech therapies, ambulance, medical equipment/supplies, and medical services not paid from Part A. Optional, everyone must pay monthly premium
Part C-
Part C- Managed Care. Must continue to pay Part B to enroll Managed Care, provided by commercial companies
Part D-
Part D- Medications prescribe for treatments is optional and pays premium.
Worker’s Comp
Part I:
Part II:
Part I: coverage
Part II: Employers liability
DOI
claim, agent must reply within 10 days
Estoppel.-
given up right, cant get it back
HMO
- specialists Cannot act as gatekeeper.
Maternity Leave
- 12 weeks per FMLA policy (unpaid
WorkersComp
- covers occupational, job related injury or sickness
- 24 hours coverage including ER services
Medicare
- covers medical expenses, not disability income.
Specified Disease Policy (example: cancer) -
Dread disease or limited policy
