Study 4 Flashcards
What is a claim reported but not yet paid out?
Outstanding loss revenues
Incurred =
Happened
What are two ways stock companies make money?
- Underwriting gain/profit
2. Interest on investment
What are founded on the principal of mutual aid?
Assessment or premium note mutuals
Insurance companies of the mutual type that specialize in industrial risks and in loss prevention, specifically fire
Factory mutuals
Which provinces are engaged in writing compulsory automobile insurance?
Saskatchewan, Manitoba, British Columbia and Quebec
Where did insurance begin?
Lloyds of London
Funds that are set aside by an insurance company for the purpose of meeting obligations as they fall due
Reserve
An amount carried as a liability in an insurance balance sheet
Loss reserve
One who specializes in the mathematics of insurance morality rates and the like
Actuary
The process of compiling and analyzing data to establish rates that accurately reflect the level of risk, usually performed by actuaries
Rate making
Three main departments of any company are…..
- Administration
- Marketing
- Accounting and finance
Three main departments of an insurance company
- Underwriting
- Claims
- Actuarial
To insure. More commonly to scrutinize a risk then decide on its eligibility for insurance
Underwrite
One who adjusts losses on behalf of the insurance companies but is not employed by any one insurance company
Independent adjuster
Insurance purchased by an insurance company from another insurance company
Reinsurance
An insurer’s transferal or signing over part of an insurance risk to re-insure
Cede
That which is ceded, for example: A re-insurance term
Cession
The portion of the risk that is kept by the insurer while the remainder is ceded to a reinsurer
Retain brackets retention
An insurance company that reinsures primary insurance companies
Reinsurer
To cede part of the risk to another insurer or reinsurer
Retrocede (retrocession)
The re-insurance company that accepts a retrocession from another company
Retrocessionaire
Two main types of actuaries are….
- Pricing actuaries- responsible for calculating pricing
2. Reserving actuaries- determine the amount of money to be held in bulk claims reserves. (IBNR)
What are the two methods of reinsurance?
- Propertional reinsurance (pro rata reinsurance)
2. Non-proportional reinsurance
A type of reinsurance where the company share loss payments in the same proportion that it shares premium and policy amounts
Proportional reinsurance
Two types of reinsurance are…..
- Treaty (automatic)
2. Faculative (case-by-case basis)
