Section 2.2 Flashcards
What is a risk retention group?
an insurer formed for the sole purpose of providing liability insurance for its policyholders.
What is a risk purchasing group?
purchase the insurance on behalf of their members, businesses from the same industry that join together to buy liability insurance from an insurance company
True or False: Stock Insurance
Dividends never go to policy holders
True, dividends are distributed to stockholders, they are never guaranteed, and are taxable.
True or False: Mutual insurance is owned by stockholders
FALSE, mutual insurance is owned by policy owners
True or False: Mutal Insurance
Policy dividends may be distributed to policy owners
True
What is a Fraternal Benefit Society?
Offers insurance as a benefit of membership. Not for profit, typically formed based on common religion or ethnicities
What is Lloyd’s Associations?
an international marketing association. provides a hub for the exchange of information among underwriters who transact insurance.
insures unusual risks.
What is provided at State vs Federal level of insurance?
- War risk
-Nuclear Energy
- Flood Insurance
- Federal Crop Insurance
- Unemployment
- Workers Compensation
Unemployment and Workers Compensation are provided at state level.
Domestic, Foreign, and Alien Insurers
Domestic - Home state
Foreign - Another state / US territory
Alien - Another country
What is a certificate of authority?
A state license for an insurer
An authorized insurer :
sells, places, and services insurance contracts
An unauthorized insurer:
sells surplus lines insurance products
Agents represent
the insurer
Brokers represent
the insured
