Terms 1

Question 1

Calculates policy rates, reserves, and dividends

Answer 1

Actuarial Department

Question 2

An insurer whose principal office and domiciled location is outside the country

Answer 2

Alien Insurer

Question 3

An insurer who has received a certificate of authority from a states department of insurance authorizing them to conduct business in that state

Answer 3

Admitted/authorized Insurer

Question 4

Represents themselves and the insured

Answer 4

Broker

Question 5

An insurer established and owned by a parent firm for the purpose of insuring the parent firms less exposure

Answer 5

Captive Insurer

Question 6

A license issued to the insurer by a department of insurance, which authorizes that company to conduct insurance business in that particular state

Answer 6

Certificate of Authority

Question 7

Responsible for processing investigating, and paying claims

Answer 7

Claims Department

Question 8

The mount of earnings paid to policy owners as dividends after the insurance company set aside funds required to cover reserves, operating expenses, an general business purposes

Answer 8

Divisible surplus

Question 9

An insurer with its principle or home office in a state where it is authorized

Answer 9

Domestic Insurer

Question 10

An insurer with it principal office or domicile location in a different state from the state it is transacting business

Answer 10

Foreign Insurer

Question 11

Nonprofit benevolent organizations that provide insurance to its members

Answer 11

Fraternal Benefit Society

Question 12

Make up a specialized branch of the industry, primarily providing policies with small face amounts with weekly premiums. Also known as home service or debit insurers

Answer 12

Industrial Insurer

Question 13

The transfer of risk through the pooling or accumulation of funds

Answer 13

Insurance

Question 14

The customer receiving insurance protection under an insurance policy

Answer 14

Insured

Question 15

The insurance company

Answer 15

Insurer

Question 16

Not an insurer; but a group of individuals and companies that underwrite unusual insurance

Answer 16

Lloyds of London

Question 17

An insurance company or independent agent that provides a one stop shop for businesses of individuals seeking coverage for all their insurance needs

Answer 17

Multi Line Insurer

Question 18

Characterized by having no capital stock, being owned by its policy owners, and usually issue participating insurance

Answer 18

Mutual Insurance Company

Question 19

An insurer who has not received a certificate of authority from a states department of insurance authorizing them to conduct business in that state

Answer 19

Nonadmitted/unauthorized Insurer

Question 20

Typically issued by stock companies, do not allow policy owners to participate in dividends or electing the board of directors

Answer 20

Nonparticipating Policy

Question 21

An insurance policy under which the policy owners share in he company’s earnings through receipt or dividends and also elect the company’s board of directors

Answer 21

Participating Plan

Question 22

Companies owned by private citizens or groups that offer one or more insurance lines. Not government owned.

Answer 22

Private/Commercial Insurer

Question 23

An unincorporated organization in which all members insure one another

Answer 23

Reciprocal Insurer

Question 24

The acceptance by one or more insurers, called reinsurers, of a portion of the risk underwritten by another insurer who has contracted for the entire coverage

Answer 24

Reinsurance

Question 25

A company that provides financial protection to insurance companies. They handle risks that are too large for insurance companies to handle

Answer 25

Reinsurer

Question 26

A group owned liability insurer which assumes and spread product liability and other forms of commercial liability risk among its members

Answer 26

Risk Retention Group

Question 27

Establishes a self funded plan to cover potential loses instead if transferring the risk to an insurance company

Answer 27

Self Insurer

Question 28

An insurance company owned and controlled by a group of stock holders whose investments in the company provides the safety margin necessary in the issuance of guaranteed, fixed premium, non participating policies

Answer 28

Stock Insurance Company

Question 29

Nontraditional insurance only available through private or commercial carriers

Answer 29

Surplus Lines Insurance

Question 30

The department within an insurance company responsible for reviewing applications, approving or declining applications, and assigning risk classifications

Answer 30

Underwriting Department

Question 31

The policies restore insureds to the financial position they enjoyed before the insured loss

Answer 31

Indemnify

Question 32

What is the primary purpose of a rating service company

Answer 32

To determine the rated company’s financial strength

Question 33

Th accounting measurement of an insurers future obligations to its policy holders

Answer 33

Reserves

Question 34

Indicates a company’s ability to make unpredictable payouts to policy owners

Answer 34

Liquidity

Question 35

Policy assignment under which the assignee receives full control over the policy and full rights to its benefits

Answer 35

Absolute assignment