RMIN Chapter 5 Flashcards
what are the major types of private insurers?
-stock insurers
-mutual insurers
-lloyds
what are stock insurers?
a corporation owned by stockholders
what is the objective of stock insurers?
to earn profit for stockholders by increasing the value of stock and paying dividends
what are mutual insurers?
a corporation owned by policyholders
how are profits distributed for mutual insurers?
distributed to policyholders by dividends or rate reductions
what are the types of mutual insurers?
-assessment mutual
-advance premium mutual
-fraternal insurer
what is an assessment mutual ?
insurer has the right to assess policyholders an additional amount if the insurer’s financial operations are unfavorable
what is advance premium mutual?
insurer does not issue assessable policies
what is fraternal issuer ?
provides life and health insurance to members of a social or religious organization
what is Lloyds?
worlds leading market that provides services and physical facilities for its members to write specialized lines of insurance
who is NOT an insurer?
Lloyd’s
who is a group who underwrites insurance for syndicates?
Lloyds
what do Lloyd’s brokers do?
represent policyholders to arrange coverage with syndicates
what do Lloyd’s syndicates do?
offer insurance contracts in the market
who are Lloyd’s syndicates?
members
managing agents
underwriters
who join together and provide capital to form syndicates, receiving profits or bearing losses?
Lloyd’s members
who manages the syndicates who typically specialize in certain lines?
Lloyd’s managing agents
who works for the syndicates to assess risks and determine premiums?
Lloyd’s underwriters
what are the marketing systems?
-insurance agents
-brokers
-surplus line brokers
-managing general agent
who legally represents the principal (insurance company) and has the authority to act on the principals behalf?
insurance agents
what is legally responsible for all acts of an agent when the agent is acting within the scope of authority ?
the principal
what is an agent binding authority ?
provide temporary insurance until the policy is actually written
who usually has no authority to issue binders?
life insurance agents
what is typically provided by property and casualty agents?
agent binding authority
who legally represents the insured and solicits applications and places coverage with the appropriate insurer?
brokers
who is paid commission from the insurer?
brokers
in general, who does NOT have authority to bind?
brokers
what is very important in Commercial Property and Casualty ?
Large Brokerage Firms
what are surplus line brokers?
are “wholesalers” who work with retail agents and brokers
who is licensed to place business with a “non admitted” insurer?
surplus line brokers
what are surplus lines?
refer to any type of insurance for which there is no available market in the state
what is a non admitted insurer?
an insurer not licensed to do business in the state
what is a managing general agent?
specialty producer that has underwriting authority from an insurer
what usually represents several unrelated insurers?
independent agency
what type of agency allows agents to be paid a commission which varies by the line of insurance ?
independent agency
agents may be authorized to adjust small claims and may provide loss control services to their insurers with what type of agency?
independent agency
what type of agency is where the agent represents only one insurer or group of insurers under common ownership?
exclusive agency system (captive agents)
what type of agency is does not let agents own the expirations or renewal rights to the policies?
exclusive agency system (captive agents)
what are the types of agents?
independent and exclusive/captive
who usually represents several unrelated insurers?
independent agents
who represents only one insurer or groups of insurers under common ownership?
exclusive/ captive
what are other distribution systems?
direct writer and direct response
what is a direct writer?
an insurer in which the salesperson is an employee of the insurer not an independent contractor
how are direct writers compensated?
“salary plus” arrangement
what is group insurance marketing?
methods to sell individual policies
who is group insurance marketing sold to?
-employer groups
-labor unions
-trade associations
-college and university alumni
who sells group insurance marketing products?
group representatives, employees who receive a salary and incentive payments based on sales
how do employees typically pay for group insurance marketing?
pay for insurance by payroll deduction
