unit3-7,8 Flashcards
3 ways underwriters assign rates
judgement, manual, experience
judgment rating
no set rates, based upon underwriters experience
the premium is determined by considering the individual risk using only the judgment and experience of the underwriter
Manual rating
set rates for specific risk classes
a.k.a. class rating. uses company rates for a particular state or area that are contained in a manual
rate per unit * number of units = premium
experience rating most commonly associated with what
based on insured’s claim history.
worker’s compensation
modification factor based on loss experience
increases or decreases a premium
usually a three year period
actual loss experience
compared to historical loss data for a particular rating class
retrospective rating
premium based on losses incurred during the policy
schedule rating
system of debits or credits
outside company used for claims data to estimate claim cost on different types. of risk
Insurance service organization (ISO)
loss costs
the amount the company thinks they will have to pay when a claim is made
a.k.a pure claims data
no operating expenses included
no profits included
factors that determine premium rates
- loss cost
- cost of handling claims
- operating expenses
- profits
insurance companies employ actuaries to calculate the rates
Fair credit reporting penalty
max 5,000 and or 1yr in prison
TRIPRA
terrorism risk insurance program reauthorization act of 2015
limits exposure of insurers in case of another terrorist attack.
federal government shares the risk up to 100 billion
GLBA
Gramm-Leach-Bliley Act
allow financial holding companies to engage in any activities that are financial in nature
based on activity not company
protects confidentiality of personal information
consumer vs customer
consumer- anyone whom a company collects information
customer- consumer who has an ongoing relationship with the financial institution
how to opt out GLBA
must be offered financial institutions when an account is established and annually thereafter
