Ins 21 Chap 2 Vocab

Front 1

Stock insurance

Back 1

Owned by stock-holders formed to earn them a profit

Front 2

Mutual ins. company

Back 2

Owned by policyholders formed as a corporation for the purpose of providing ins. to those policyholders

Front 3

Reciprocal ins. exchange

Back 3

To provide reciprocity for subscriber(members) to cover each other's losses

Front 4

Subscribers

Back 4

(Members) The policyholders of a reciprocal ins. exchange who agree to insure with each other

Front 5

Attorney-in-Fact

Back 5

Authorized manager of the reciprocal who administers its affairs and carried out its ins. transactions

Front 6

Captive ins company

Back 6

Formed under a parent company to write some or all of the insurance

Front 7

Reinsurance

Back 7

Type of ins. which one insurer transfers some or all loss exposures from policies written for its insured to insured or another insurer

Front 8

Primary insurer

Back 8

The ins. company that transfers its loss exposures to and insurer in a contractual agreement

Front 9

Reinsurer

Back 9

The company that accepts the loss exposure of the primary company.

Front 10

Monopolistic state fund

Back 10

State workers ins. plan that is the only workers compensation in that state.

Front 11

Competitive state fund

Back 11

Ins. plan that competes with private insurers to provide workers compensation ins.

Front 12

Residual market plan

Back 12

a program that makes ins. available to those who cannot get coverage because private insurers will not give them coverage

Front 13

Guaranty fund

Back 13

A fund to pay claims of insolvent insurers

Front 14

National Association of ins. Commissions (NAIC)

Back 14

Was established to encourage coordination and cooperation among state insurance departments.

Front 15

Model law

Back 15

Drafted by NAIC provides a solution to a given problem provides states for drafting laws

Front 16

Ratemaking

Back 16

Rate x Number of exposure units = Premium
Calculates rate to determine the premium

Front 17

Rate

Back 17

The price of ins. for each unit of exposure

Front 18

Premium

Back 18

Periodic payment an insured makes to there insurer to exchange for ins. coverage

Front 19

Actuary

Back 19

Person who uses math to determine insurance rates

Front 20

Actual equity

Back 20

basing rates on actuarially calculated costs of losses

Front 21

Social equity

Back 21

Rating concept deemed unfairly discriminatory, they penalize for age or gender

Front 22

Unfair Discriminations

Back 22

Penalizing for different standards and treatment to insured's who have the same basic characteristics

Front 23

Pre-approval laws

Back 23

Rates must me approved by the state ins. department before they can be used

Front 24

Flex rating laws

Back 24

Prop approval is needed only if the new rates are over or under the previously filed rates

Front 25

Use-and-File laws

Back 25

rates must be filed within specific periods after they are first used in the state

Front 26

Open competition(no file laws)

Back 26

Rates don't need to be filed

Front 27

State-Mandated rates

Back 27

Rates must be used by all insurer of a particular type of ins. in the state

Front 28

Solvency

Back 28

Ability for the ins. company to meet theits financial obligations as they become due.

Front 29

Solvency surveillance

Back 29

conducted by state officials to make sure that company's are meeting there obligations and to remain in business long term.

Front 30

Insurance regulatory information system

Back 30

Monitors insurer overall financial condition

Front 31

Licensed insurer

Back 31

Authorized by state insurance department to do business in that state

Front 32

Domestic Insurer

Back 32

Incorporation in the same state in which it is transacting business

Front 33

Foreign insurer

Back 33

Licensed to operate in that state but incorporated in another stae

Front 34

Alien insurer

Back 34

Licensed in a U>S state but incorporated in another country

Front 35

Market conduct regulation

Back 35

state laws that regulate the practices of insurers in regard to for areas of operation sales and advertising, underwriting, ratemaking, and handling

Front 36

Standard market

Back 36

Insurers who offer in. coverage at rates designed for customers with average loss exposures

Front 37

Excess and surplus lines ins. E&S

Back 37

ins coverage not available in standard markets written by unlicensed insurers

Front 38

Nonadmitted insurers

Back 38

Insurers that are not licensed and write E&S ins. coverages