General California Insurance Law

Front 1

Insurance policy

Back 1

Written instrument in which a contract of insurance is set forth.

Front 2

Warranty

Back 2

Written guarantee that the information provided is true and accurate.

Front 3

Rescission

Back 3

Revocation of a contract.

The act in which the insurer has the right to cancel a policy if an applicant intentionally failed to communicate information that the insurer needed and was discovered after the policy was issued.

Front 4

Material to

Back 4

When determining whether fraud has been committed consideration will be given to whether any false statement contains information which is relied on by the insurer in making their decision to issue the coverage.

Front 5

Concealment

Back 5

Intentional withholding of information of a material fact that is crucial in making a decision.

Failure to disclose known facts.

Front 6

Warranty

Back 6

Statement considered to be guaranteed to be true and becomes part of the contract

Front 7

Express warranty

Back 7

Statements in a policy.

Front 8

Implied warranty

Back 8

An unwritten or unspoken guarantee presumed to be made based on the circumstances of a transaction.

Front 9

Materiality

Back 9

The idea that all parties to a contract are entitled to all information necessary to make an informed decision about the quality or nature of contract.

Front 10

Representations

Back 10

Statement believed to be true to the best of my knowledge but they are not guaranteed to be true.

Ex: answers the insured gives the questions of insurance application.

Front 11

6 specific elements of a contract of insurance

Back 11

1. The parties to the contract.

2. The persons or property being insured.

3. A statement of the insurable interest that exist if the insured is not the owner.

4. The risk insured against.

5. The time period during which the policy will be in force or continue.

6. The stated annual, semiannual, quarterly, or monthly premium or a statement of the manner in which a premium rate and total premium or later be calculated, if it can only be determined by the termination or expiration of the contract.

Front 12

Producer

Back 12

A legal entity, either human or corporate, that acts on behalf of, or in the place of, its principle.

Front 13

Independent agent

Back 13

Has contracts with more than one ensure and, ideally, is then in an enhanced position to offer client a wide range of product options.

Front 14

Own the renewal

Own the expiration

Back 14

An independent agent can move the client to a different insurance for the renewal.

Front 15

Exclusive

Captive

Career agent

Back 15

Has a contract with only one company.

Front 16

Direct response marketing

Back 16

Mass marketing of insurance products through mail solicitation, print media advertisements, or television and radio in which the policies provided are generally low and benefits and low and premiums.

Direct response refers to the necessity of the potential client to take the initiative and respond to the advertisement through a telephone or mail contacts with ensure as directed in the ad.

Front 17

Home service insurance

Back 17

Opposite of direct response insurance.

With home service products, the agent Solis its and sells insurance in the home or business and returns to collect the premium in person.

Front 18

Insurance agent

Back 18

Person authorized to transact all classes of insurance on behalf of an admitted insurer other than life, disability, or health insurance.

Front 19

Life only agent

Back 19

Authorized to transact insurance on human lives including the following benefits:

Endowment

Annuities

Death or dismemberment by accident

Disability income

Front 20

Accident and health agent

Back 20

Authorized to transact the following types of insurance:

Sickness

Bodily injury

Accidental death

Disability income

24-hour coverage

Front 21

Property or casualty licensee

Back 21

Authorized to transact any of the following coverages:

Automobile insurance

Personal watercraft

Residential property (including Earthquake and flood)

Inland marine insurance

Umbrella or Access liability insurance

Front 22

Personal Lines agent

Back 22

I only transact personal automobile, inland marine for personal property, residential property, and umbrella or excess liability lines of insurance.

Front 23

Limited lines automobile insurance agent

Back 23

Authorized to transact auto insurance, including automobile liability coverage, physical damage coverage, and collision coverage.

Front 24

Surplus line broker

Back 24

Authorized to transact insurance with a non-admitted insurance only if a specific class of insurance can not be obtained from admitted insurers ( after proof of a diligent search).

Front 25

Unlawful insurance fraud

Back 25

Any person engaged in the business of insurance to willfully, with the intent to deceive, make any oral or written statement that contains either false statements or omissions of material fact.

Front 26

1033 Waiver

Back 26

Written consent from Insurance Regulatory officer ( director of insurance, Commissioner of Insurance, etc.) Granting an individual that has been convicted of a crime involving dishonesty, breach of trust or a violation of the violent crime control and Law Enforcement Act of 1994 to work in the business of insurance. For the purpose of 18 U. S. C. 1033.

The person who engages in conduct that is in violation of section 1033 may be subject to a civil penalty of not more than $50,000 for each violation or the amount of compensation the person received as a result of the prohibited conduct, whichever is greater.

Front 27

Agents vs brokers

Back 27

Agents legally represent the insurer. Their actions are considered to be made on behalf of the insurer. Brokers legally represent their clients. Negotiate contracts of insurance on their clients behalf.

Front 28

Insurance agent

Back 28

Person authorized to trans have to all classes of insurance on behalf of an admitted into other than life, disability, or health insurance.

Front 29

Insurance broker

Back 29

Licensee who, for compensation and on behalf of a person other than the insurance, transact insurance other than life, disability, or accident and health.

Front 30

Life licensee

Back 30

Person authorized to act as a life agent on behalf of a life insurance ability ensure to transact life insurance, accident and health insurance, or a combination of all three.

Front 31

Business of life settlement

Back 31

Any activity relating to the solicitation and sale of a life settlement contract to a third party who has no insurable interest in the insured.

Front 32

Life settlement

Back 32

Any financial transaction in which the owner of a life insurance policy sells a policy that is no longer needed to a third party for some form of compensation, usually cash.

Front 33

Owner

Back 33

Owner of the policy who Macy to enter into a Life Settlement contract.

Front 34

Insured

Back 34

Person covered under the policy that is considered for sell any life settlement contract.

Front 35

Qualified institutional buyer

Back 35

One that owns and invest at least 100 million insecurities and is allowed by the SEC to trade an unregistered securities. English settlement provider may sell, or in some other manner approved by the superintendent, transferred ownership of a settled policy to a qualified institutional buyer or other investment into the approved by the superintendent.

Front 36

Life expectancy

Back 36

Important concept in life settlement contracts. Refers to a calculation based on the average number of months the insurance is projected to live due to medical history and mortality factors (arithmetic mean).

Front 37

Life settlement contract

Back 37

Establishes the terms under which the life settlement provider will pay compensation to the policy owner, in return for the absolute assignment, transfer, sell, or release of any portion of any of the following:

The death benefit

Any beneficial interest

Policy ownershipAny beneficial interestInterest in a trust or any other entity that owns the policy.

Interest in a trust or any other entity that owns the policy.

Front 38

Life settlement broker

Back 38

A person who, for compensation, solicits, negotiates, or offers to negotiate a life settlement contract. Represents only the policyowners and have a duty to the owners to act according to the instructions and in their best interest.

Front 39

Life settlement producer

Back 39

A person licensed as a resident or nonresident insurance agent who is qualified to transact life settlements.

Front 40

Financing entity

Back 40

Includes any accredited investor who provides funds for the purchase of one or more Life Settlement contract it has an agreement in writing to do so.

Front 41

Financing transaction

Back 41

When a licensed settlement provider obtains funds from the financing entity.