Unit 1 Review- Types of Insurers Flashcards
Who owns private insurance companies and what do they offer?
Private citizens or groups own private (commercial) insurance companies. They offer individual, group, industrial, or blanket insurance policies.
Who owns and operates government insurers? and what do they offer (give examples)?
A Federal or State entity.
They may either:
~write insurance to cover perils that are not insurable by commercial insurers (i.e., war, flood, a nuclear reaction); or
~write insurance on insurable risks and thus compete with the commercial marketplace (i.e., Social Insurance such as Workers’ Compensation).
Government insurers generally write insurance to cover or protect what?
o Government insurers generally write insurance to cover catastrophic perils (i.e., flood) or to protect a segment of society (i.e., the elderly) against catastrophic medical costs (i.e., Medicare).
What are some examples ofgovernment insurance programs ?
National Flood Insurance Program, and Federal Crop Insurance Corporation
Social Security, Medicare, and Medicaid
Serviceman’s Group Life Insurance (SGLI) and Veteran’s Group Life Insurance (VGLI)
Where does a domestic insurer have its principal home office and how is it chartered? Give an example
*They may use the word Domicile- its means home or place of residence (this is in the Insurer Classification According To Domicile section)
A domestic insurer has its principal or home office in a state where it is authorized.
o Is chartered in or formed under the laws of the state where it is authorized.
o Nationwide Insurance Company of Columbus, Ohio, operates as a domestic insurer in the State of Ohio.
Where is a foreign insurer authorized and where is its charter or principal office? Give an example
- A foreign insurer is authorized in one state, but its charter or principal office is in another State.
o Nationwide Insurance Company is also licensed or authorized in the State of Illinois as a foreign insurer.
Where are alien insurers authorized? Give an example
In any state within the U.S., whose principal office is located outside this country.
o Nippon Life of Tokyo, Japan, or Sun Financial Services of Toronto, Canada, are examples of alien insurers.
What is an authorized or admitted insurer and what are they issued?
(This is in the Insurer Classification According To Authorization section)
An insurer that is allowed or authorized to conduct insurance business in a particular state
o Authorized (admitted) insurers are issued a certificate of authority.
An unauthorized insurer is also called what, and what are they not permitted to do?
A non-admitted company and they are not permitted nor allowed to conduct insurance operations in a particular State.
Do unauthorized insurers have a certificate of authority and can they offer surplus lines insurance? Why?
They do not have a certificate of authority.
o In some states they may still offer surplus lines insurance without a certificate of authority if no authorized insurer in the market is available or willing to take the risk.
