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104 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Function of underwriting |
Evaluate applications , select rating facters, policy terms and conditions. |
3 different ones |
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Private insurers |
3 types stock, mutual, reciprocal |
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Benefits of insurance |
Peace of mind and securing credit |
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Self-funding |
Retaining all or part of the risk |
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Marketing distribution |
4 systems direct writing, direct mail, exclusive agents, independent agencies |
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Investigative agencies |
5 areas personal interviews, MIB, DMV, financial reports, physician statements |
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Agent |
Works on behave of a company of an insured |
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Broker |
Works on behave of insured fir a company |
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Solicitor |
Works for a employer, selling insurance under a agent |
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MGA |
Works with agents and is appointed with many companies |
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Fire and casualty licensee |
Licensed to transact hazard insurance and liability policies including health and disability insurance |
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Personal lines licensee |
Cannot transact health disability or commercial |
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Adjuster |
Assists for settling claims either for a company or a insured |
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Non admitted/admitted |
Not authorized to transact business in California except through Surplus lines broker |
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Alien/foreign/domestic |
Organized under laws of another country/state/or CA |
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Surplus lines and special Surplus lines |
Only transact for non-admitted / broker who transact railroad, aircraft, ship owner coverage |
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Inactive license |
No notice of appointment on file but all fees and CE units are up to date |
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Fiduciary |
Handles affairs and funds of others |
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CE unit requirements |
Continuing education is: first 4 years is 25 units each year 3rd renewal cycle 15 units every year or 30 units each renewal cycle |
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CIC & CCRs |
California insurance code in California code of regulations |
CA |
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Department in an insurance company |
4 areas Reciprocal, Marketing sales, underwriting, actuarial |
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Types of insurance companies |
5 types reciprocal, mutual, stock, risk retention group, Lloyds |
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Commissioner |
Elected by the citizens to administer, interpret, and enforce the code |
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CSGA |
California state Guaranty Association |
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Rating laws |
4 types- prior approval, file & use, use & file, open competition |
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Subrogation |
Insured gives up the right to sue the 3rd party & the company does it for them. |
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Arbitration |
Mediator that helps settle disputed claims |
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Deductibles |
Portion the insured pays before the company |
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Elements of a contract |
4 elements- offer and acceptance, competent parties, legal purpose and consideration contract of |
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Adhesion |
Insured has no say in the contract wording, only accept or reject it |
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Unilateral |
Premium for a promise. Insurer is the only one that could not cancel without just cause |
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Conditional |
Must meet all conditions before claim is paid |
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Personal |
Cannot transfer. between company and insured |
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Utmost good faith |
Honest information on both parties, to their best belief and knowledge |
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Indemnity |
Get you back where you were before the loss occurred |
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Insurance policy |
Written instrument where one undertakes to indemnify another |
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Specs of a policy |
6 specifices- declaration page, insuring agreement, definitions, exclusions, endorsements, additional coverage |
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Recission |
Void of contract |
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E&O |
Professional liability coverage for those who give advice for a fee |
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Free insurance |
Not permissible as an incentive to purchase another product |
Can't bribe with free insurance |
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Risk |
2 types pure and speculative |
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Peril |
Cause of loss |
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Hazard |
4 types- physical, moral, morale and legal |
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Law of large numbers |
The larger the pool of information gathered the more reliable it becomes |
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Loss exposure |
Degree to which a person or property is at risk |
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Ideally insurable risk |
2 ares- accidental, creates financial hardship, measurable not catastrophic |
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Adverse selection |
Tendency of those who need insurance to buy it |
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Spread of risk |
Transfer or pool the risk |
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Libel |
Written comments against others |
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Slender |
Spoken comments against another |
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Fraud |
Deliberately providing false information for gain/profit |
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Concealment |
Hiding materials info |
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Warranty |
2 types- expressed or implied |
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Materiality |
Important facts to the contract |
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Representation |
Oral or written expression of information |
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Misrepresentation |
False information about a contract |
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Authority |
2 types- expressed and implied |
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Transacting insurance |
4 areas- execution, negotiation, solicitation of the contract or any other transaction resulting in these |
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Display of license |
Must be in a prominent place in your office |
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Keeping records |
Available in 30 days upon request all policy information must be accessible in 30 days notice and on file for 2 years |
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Printing license # and fines |
Must be printed on all material to the public; fines are for each offense and are 200 1st offense 500 2nd offence and 1000 each offense after that |
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Broker fees |
Must be disclosed |
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Notice of appointment |
Every licensee must have one on file with the DOI to be actively license |
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Paul vs Virginia |
State Should regulate insurance |
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Seua |
Government should regulate insurance |
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McCarron Furguson |
State with regulate insurance laws, except for federal programs like flood |
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Code administration |
Commissioner doesn't create the code, only determines how to implement it ect. |
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Conservation |
First attempt at restoring an insurance company that is close to insolvency |
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LESLIE list |
List of eligible Surplus lines insurance |
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Negligence |
4 elements- Duty, breach of Duty, injury or damage, proximate clause |
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Defense against negligence |
4 defenses- assuming a risk, contributory negligence, comparative negligence, last clear chance |
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Proximate Claus |
Unbroken chain of events that results in damage or injury due to negligence |
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Gross negligence |
Irresponsible Behavior |
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Vicarious liability |
Automatic liability one party has for the actions of another |
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Liberation clause |
Broadening coverage without any extra charge during a policy period |
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No-fault laws |
Each party pays for their own damage or injury. does not exist as a whole anymore |
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Risk management |
5 strategies - STARR; share, transfer, aviod, retain, ruduce |
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Direct/indirect loss |
Reduction of the Quality, quality or value of something to do a covered loss / consequential losses as a result of the cover loss |
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Combined ratio |
Incurred losses + loss adjusted expenses and earned premium = loss ratio |
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All risks - open peril |
Everything's covered unless it is excluded |
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Named peril |
Only perils named on the policy are covered |
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Short rate |
Cancellation made by an insured prior to its expiration date and surcharge by the company |
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Pro rata |
Cancellation made prior to the expiration date and NOT surcharge by the company |
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Flat rate |
Cancellation of a policy back to its Inception date with all premiums are 100% refunded |
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Cancel/non-renew/Lapse |
Cease coverage/ company not continue beyond expiration date/ cancels due to non-pay |
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Unearned premium |
Money the company owes a insured for the uninsured portion of time already paid for |
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Earned premium |
Money owed to the company for a coverage period Provided but not yet paid for |
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Contingent/ expectant interest |
Just because I expect to own something in the future that will not allow me to buy coverage for it now |
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Los ratio |
Percentage of Premium dollar a company spends on a claim and expenses a 100% means no profit, broke even |
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Waiver & Estoppel |
Giving up a right/ agent acts in a misleading way so that the insured is not required to perform |
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Insolvency |
Insurance companies nearing bankruptcy or unable to pay expected loss |
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Non-discrimination |
Race, color, national origin, religion, sexual orientation, mental impairment that is not Material, ancestry |
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Absolute / strict liability |
considered liable regardless of the injury or damage due to relationship with it |
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Co - insurance |
Carried over required X loss - deductible =loss payment |
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Aggregate |
Limit of insurance for all claims within a policy., typically annually |
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Damages that may be awarded |
Punitive, compensatory, specific, and general |
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Concurrent causation |
2 for more perils happen with no break in time |
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Types of rating methods |
Manual/ judgement /Merit rating |
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Loss Reserve |
Estimate of an amount the insurer may have to pay for future claims |
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Parts to a policy |
Don't cry if dragons eat elephants angrily Declaration, condition, insuring agreement, endorsement, exclusions, additional coverage |
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Assignment |
Transferring the policy from one person to another |
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Lost valuation |
AVC, RC, market value, agreed value, stated value |
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Standard mortgage clause |
If the insured neglects to pay the premium, or file a claim, they may do so on the insured's behalf |
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HO 6 |
Covered perils to a condominium units and the exposure of liability as well as Loss assortment coverage |
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