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Insurance > Vocabulary > Flashcards

Vocabulary Flashcards

1
Q

Actuarial department

A

The actuarial department calculates policy rates, reserves, and dividends.

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2
Q

Alien Insurer

A

An Alien Insurer in the United States is an insurer whose principal office and domiciled location is outside the country.

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3
Q

Admitted Insurer

A

An admitted or authorized insurer is an insurer who has received a certificate of authority from a state’s department of insurance authorizing them to conduct insurance business in that state.

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4
Q

Broker

A

A Broker represents themselves and the insured (i.e., the client or customer).

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5
Q

Captive Insurer

A

A Captive Insurer is an issuer established and owned by a parent firm for the purpose of insuring the parent firm’s loss exposure.

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6
Q

Certificate of Authority

A

A Certificate of Authority is a license issued to an insurer by a department of insurance (or equivalent state agency), which authorizes that company to conduct insurance business in that particular state.

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7
Q

Claims Department

A

The claims department is responsible for processing, investigating, and paying claims.

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8
Q

Divisible Surplus

A

Divisible surplus is the amount of earnings paid to policyowners as dividends after the insurance company sets aside funds required to cover reserves, operating expenses, and general business purposes.

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9
Q

Domestic Insurer

A

A Domestic Insurer is an insurer with its principal or home office in a state where it is authorized.

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10
Q

Foreign Insurer

A

A Foreign Insurer is an insurer with its principal office or domicile location in a state different from the state it is transacting insurance business.

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11
Q

Fraternal Benefit Society

A

Fraternal Benefit Societies are nonprofit benevolent organizations that provide insurance to its members.

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12
Q

Industrial Insurer

A

Industrial Insurers make up a specialized branch of the industry, primarily providing policies with small face amounts with weekly premiums. Other names for industrial insurers include home service or debit insurers.

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13
Q

Insurance

A

The transfer of risk through the pooling or accumulation of funds.

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14
Q

Insured

A

The insured is the customer receiving insurance protection under an insurance policy.

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15
Q

Insurer

A

The insurer is the insurance company.

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16
Q

Lloyds of London

A

Lloyds of London is NOT an insurer, but a group of individuals and companies that underwrite unusual insurance.

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17
Q

Multi-line Insurer

A

A multi-line insurer is an insurance company or independent agent that provides a one-stop-shop for businesses or individuals seeking coverage for all their insurance needs. For example, many large insurers offer individual policies for automobile, homeowner, long-term care, life, and health insurance needs.

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18
Q

Mutual Insurance Company

A

Mutual Insurance Companies are insurance companies characterized by having no capital stock, being owned by its policy owners, and usually issue participating insurance.

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19
Q

Non-admitted Insurer

A

A non-admitted or unauthorized insurer is an insurer who has not received a certificate of authority from a state’s department of insurance authorizing them to conduct insurance business in that state.

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20
Q

Nonparticipating policy

A

A nonparticipating insurance policy, typically issued by stock companies, do not allow policyowners to participate in dividends or electing the board of directors.

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21
Q

Participating Plan

A

A participating plan is an insurance policy under which the policyowners share in the company’s earnings through receipt of dividends and also elect the company’s board of directors.

22
Q

Private (Commercial) Insurer

A

Private or commercial insurance companies are companies owned by private citizens or groups that offer one or more insurance lines. Commercial insurers are NOT government-owned.

23
Q

Reciprocal Insurer

A

A Reciprocal Insurer is an unincorporated organization in which all members insure one another.

24
Q

Reinsurance

A

Reinsurance is 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.

25
Q

Reinsurer

A

A reinsurer is a company that provides financial protection to insurance companies. Reinsurers handle risks that are too large for insurance companies to handle on their own and make it possible for insurers to obtain more business than they would otherwise be able to.

26
Q

Risk Retention Group

A

A Risk Retention Group is a group-owned liability insurer which assumes and spread product liability and other forms of commercial liability risks among its members.

27
Q

Self-Insurers

A

A self-insurer establishes a self-funded plan to cover potential losses instead of transferring the risk to an insurance company.

28
Q

Stock Insurance Company

A

A stock company is an insurance company owned and controlled by a group of stockholders (or shareholders) whose investment in the company provides the safety margin necessary in the issuance of guaranteed, fixed premium, nonparticipating policies.

29
Q

Surplus Lines Insurance

A

Surplus Lines Insurance is nontraditional insurance only available from a surplus lines insurer. They offer coverage for substandard or unusual risks not available through private or commercial carriers.

30
Q

Underwriting Department

A

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

31
Q

pure assessment mutual company

A

operates on the basis of loss-sharing by group members.

32
Q

Reciprocal insurers

A

organized on the basis of ownership by their policyholders.

33
Q

ceding company

A

The company transferring the risk

34
Q

reinsurer

A

The company assuming the risk

35
Q

primary insurer.

A

In a reinsurance agreement, the insurance company that transfers its loss exposure to another insurer

36
Q

The most common reinsurance contract between two insurance companies is called __________, which involves an automatic sharing of the risks assumed.

A

treaty reinsurance

37
Q

An insurer established and owned by a parent firm for the purpose of insuring the parent firm’s loss exposure is known as a

A

captive insurer.

38
Q

Surplus lines

A

refer to the nontraditional insurance market.

39
Q

___________ is characterized by relatively small face amounts with premiums paid weekly.

A

Industrial insurance

40
Q

Agents are also classified as___ or _____

A

captive or career agents and independent agents.

41
Q

_________ are branches of major stock and mutual insurance companies that are contracted to represent an insurer in a specific area.

A

Career agencies

42
Q

_________ authority is the authority a principal deliberately gives to its agent.

A

Express

43
Q

___________ authority is the unwritten authority that is not expressly granted, but which the agent is assumed to have in order to transact the business of the principal.

A

Implied

44
Q

_________ authority is the appearance or assumption of authority based on the principal’s actions, words, or deeds.

A

Apparent

45
Q

Mutual companies can convert to stock companies through a process called ______.

A

demutualization

46
Q

A stock company may be converted into a mutual company through a process called __________.

A

mutualization

47
Q

A stock insurance company issuing both participating and nonparticipating policies is referred to as using a _________.

A

mixed plan

48
Q

Service Providers

A

Health Maintenance Organizations (HMO) and Preferred Provider Organizations (PPO).

49
Q

In a reinsurance agreement, the insurance company that transfers its loss exposure to another insurer is called the ________.

A

primary insurer

50
Q

Examples of government insurance programs

A

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)

Insurance (5 decks)

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