Unit 1: General Insurance Terms and Related Concepts | Chapter 1-6: Oregon Insurance Guaranty Association Flashcards
A Board member receives modest compensation for services as a Board member
a) True
b) False
A Board member receives modest compensation for services as a Board member
False
False. Board members are not compensated. They may be reimbursed for expenses incurred on behalf of the Association only
At the end of any calendar year, the Association (OIGA) may do which of the following tasks if money held by the Association exceeds current claims and expenses plus estimated liabilities for the coming year?
a) Refund equally to member insurers
b) Transfer unneeded funds to the general revenue fund of the state
c) Hold the funds until used
d) Refund proportionately to member insurers.
At the end of any calendar year, the Association (OIGA) may do which of the following tasks if money held by the Association exceeds current claims and expenses plus estimated liabilities for the coming year?
Refund proportionately to member insurers.
If the Association has excess funds, they will refund proportionately to member insurers.
The Association (OIGA) consists of a nine member Board of Directors selected by member insurers, subject to approval by the Director of DCBS. The primary function of board member approval is to ensure:
a) the board member is self-sufficient financially
b) the board member agrees to the amount of compensation offered
c) member insurers are fairly represented by the board
d) the board member can serve successive terms if requested to do so.
The Association (OIGA) consists of a nine member Board of Directors selected by member insurers, subject to approval by the Director of DCBS. The primary function of board member approval is to ensure:
member insurers are fairly represented by the board
The Director must determine that all member insurers are being fairly represented by the Board of Directors. Board members serve a term not exceeding four years and are not compensated by the Association; they are reimbursed for expenses incurred only.
All of the following are primary purposes of the Oregon Insurance Guaranty Association, EXCEPT:
a) To avoid excessive delay of payment and to avoid financial loss to claimants and policyholders
b) To provide for payment of covered claims under all outstanding policies of the insolvent insurer
c) Assist in the detection and prevention of insurer insolvency
d) To assist in the liquidation of the insolvent insurer.
All of the following are primary purposes of the Oregon Insurance Guaranty Association, EXCEPT:
To provide for payment of covered claims under all outstanding policies of the insolvent insurer
- The Association provides coverage for payment of covered claims for “certain” outstanding policies, not “all.” The Association does not provide coverage for contracts (or portions of contracts) not guaranteed by the insurer.*
- In addition, one of the primary functions of the Association is to assist in the detection and prevention of insurer insolvency, however, in the event of insolvency, the Association will assist in the orderly liquidation of that insurer.*
The Oregon Insurance Guaranty Association applies to:
a) property and casualty insurers
b) health insurers
c) life insurers
d) commercial insurers.
The Oregon Insurance Guaranty Association applies to:
property and casualty insurers
- The Oregon Insurance Guaranty Association is applicable to property and casualty insurers, which includes both personal lines and commercial insurers.*
- Property and casualty (liability) are two separate lines of insurance. We buy property insurance to protect ourselves against loss or damage to our own property, and we buy liability insurance to protect ourselves against loss or damage to others (bodily injury, property damage, or both) that we may be held liable for.*
An insolvent insurer is an insurer placed in final order of __________
a) Negotiation
b) Liquidation
c) Recoupment
d) transaction
An insolvent insurer is an insurer placed in final order of __________
Liquidation
An insolvent (bankrupt) company’s assets are sold off to pay whatever debt they can, referred to as final order of liquidation.
One of the major functions of the Oregon Insurance Guaranty Association is to assist in the detection and prevention of insurer insolvency. To provide this protection, member insurers are subject to:
a) premium sharing
b) reimbursement
c) assessment
d) Association fees
One of the major functions of the Oregon Insurance Guaranty Association is to assist in the detection and prevention of insurer insolvency. To provide this protection, member insurers are subject to:
assessment
- Member insurers are subject to assessment by the Association for the purpose of carrying out its duties.*
- The assessment is based on a stated percentage of the insurer’s net direct premium written in this state. The assessment imposed by the Association will not exceed 2% of the insurer’s net direct premium.*
As a condition of an insurer’s “Certificate of Authority”, an insurer _______ belong to the Association(s).
a) may
b) must
As a condition of an insurer’s “Certificate of Authority”, an insurer _______ belong to the Association(s).
must
An insurer authorized to do business in this state is required to belong to one if not both Associations, dependent on the lines of insurance written in this state.
A member insurer is allowed to recoup the amount of its assessment from the member insurer’s individual policyholders, referred to as the OIGA __________
a) adjustment payment
b) repayment fee
c) net premium reimbursement
d) assessment recoupment
A member insurer is allowed to recoup the amount of its assessment from the member insurer’s individual policyholders, referred to as the OIGA __________
assessment recoupment
An additional fee has been added to an insured’s premium, which is the OIGA assessment that is proportionately paid by all of the insurer’s policyholders, referred to as the OIGA assessment recoupment.
A covered claim does not include any amount due to any _________, insurer, insurance pool, or underwriting association as subrogated recoveries or otherwise.
a) guaranty association
b) actuary
c) insured
d) reinsurer
A covered claim does not include any amount due to any _________, insurer, insurance pool, or underwriting association as subrogated recoveries or otherwise.
reinsurer
- A covered claim does not include:*
- 1) Any amount in excess of the applicable limits of liability provided by the insurance policy, or*
- 2) Any amount due to any reinsurer, insurer, insurance pool, or underwriting association as subrogated recoveries or otherwise*.
The Oregon Insurance Guaranty Association is required to pay covered claims existing at the time of an insurer’s insolvency or that arise within _______ days of insolvency.
a) 10 (ten)
b) 20 (twenty)
c) 30 (thirty)
d) 45 (forty-five)
The Oregon Insurance Guaranty Association is required to pay covered claims existing at the time of an insurer’s insolvency or that arise within _______ days of insolvency.
30 (thirty)
The Association is obligated to pay covered claims that exist at the time of insurer insolvency or that arise within 30 days of insolvency.
Net direct premium is direct gross premium less returned premiums and __________ paid or credited to policyholders.
a) Assessments
b) borrowed funds
c) dividends
d) claims
Net direct premium is direct gross premium less returned premiums and __________ paid or credited to policyholders.
dividends
Net Direct Premium Written: Direct gross premium less return premiums and dividends paid or credited to policyholders. “Net Direct Premium” does not include premiums on contracts between insurers or reinsurers.
A covered claim does not include any amount __________ the applicable limits of liability provided by the policy.
a) Below
b) equal to
c) in excess of
d) that is 75% or less than
A covered claim does not include any amount __________ the applicable limits of liability provided by the policy.
in excess of
A “Covered Claim” does not include any amount in excess of the applicable limits of liability provided by the insurance policy, or any amount due any reinsurer, insurer, insurance pool, or underwriting association, as subrogated recoveries or otherwise.
Oregon has _______ insurance guaranty associations.
a) 1 (one)
b) 2 (two)
c) 3 (three)
d) 4 (four)
Oregon has _______ insurance guaranty associations.
2 (two)
There are two associations, one for life and health insurers and one for property and casualty insurers.
With the exception of Workers’ Compensation claims, what is the maximum Association (OIGA) obligation per covered claim relative to an insolvent insurer?
a) $100,000
b) $300,000
c) $500,000
d) $1,000,000
With the exception of Workers’ Compensation claims, what is the maximum Association (OIGA) obligation per covered claim relative to an insolvent insurer?
$300,000
The maximum obligation assumed by the Association per covered claim on behalf of an insolvent insurer is $300,000.
