Types of Insurance companies

Question 1

Commercial Insurers

Answer 1

AKA Private insurance companies. Selling insurance for profit ^^^. Offer many lines. Company selling more than one line is known as a multi-line insurer.

Question 2

Stock Companies

Answer 2

Incorporated under state laws for the purpose of making a profit for stockholders and shareholders. Stock dividends are paid to stockholders.

Question 3

nonparticipating insurers

Answer 3

Stock insurers typically referred as this because policy holders do not participate in receiving dividends or electing the board of directors unless they are also a stockholder int he company.

Question 4

Mutualization

Answer 4

Transformation of stock insurer into mutual insurer

Question 5

demutualization

Answer 5

transformation of mutual insurer into stock insurer.

Question 6

Mutual Companies

Answer 6

are owned by their policy owners. known as Participating insurers because they receive dividends and elect board of directors. dividends are paid to the policy holders. Not subject to taxation dividends are considered return of premium. If you lets funds sit and collect this could be taxed.

Question 7

Strong Assessment Mutual Companies

Answer 7

Are classified by the way they charge premiums.

Question 8

A pure assessment mutual company

Answer 8

Operates based of loss-sharing by group members. no premium is payable in advance. each member is assessed an individual portion of losses that occur.

Question 9

An advance premium assessment mutual

Answer 9

charges a premium at the beginning of the policy period. policy receive dividends if premiums exceed operating expenses/losses. If premium doesn’t cover additional assessments are levied against the members.

Question 10

Fraternal benefit societies

Answer 10

Special type of mutual companies non-profit religious, ethnic or chartable organization that provide insurance solely to their members

Question 11

Risk Retention groups

Answer 11

Mutual companies formed by a group of people in the same industry or profession. examples include pharmacists, dentists, engineers

Question 12

Service providers

Answer 12

Offer benefits to subscribers in return for the payments of a premium. There services are packaged in various plans . People who purchase plans are known as subscribers. Examples are Health Maintenance Organizations(HMO) and Preferred Provider Organization (PPO)

Question 13

Reciprocal insurers

Answer 13

are unincorporated groups of individual members that provide insurance for other members through indemnity contracts. Each member acts as both insurer and insured and are managed by attorney in fact

Question 14

reinsurers

Answer 14

Make arrangements with other insurance companies to transfer a portion of their risk to the reinsurer. The company transferring the risk is called the Ceding company and the company assuming the risk is the Reinsurer.

Question 15

Captive Insurer

Answer 15

is an insurer established and owned by the parent company to insure the the parent company’s loss exposure

Question 16

Home Service Insurers

Answer 16

AKA industrial insurance is sold by home service or debt life insurance companies. Face amounts are small; usually $1000 to $2000 and premiums are paid weekly.

Question 17

Government insurance

Answer 17

Federal and state governments are also insurers. They provide social insurance programs to protect against universal risks by redistributing income to help people who cannot afford it. examples include social security (old age survivor disability insurance OASDI. Medicare for elderly Medicaid for financially needy SGLI and VGLI for for active or retired servicemen and tri-care is for military and family members.

Question 18

Self-insurers

Answer 18

retain risk and must have large number of similar risks and enough capitol to pay claims. establish thier own self-funded plan to cover potential losses

Question 19

Lloyds of London

Answer 19

Not an insurance company. Member’s of the association form syndicates to underwrite and issuer insurance-like coverage. This is a group of investors who share in unusual risk