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42 Cards in this Set
- Front
- Back
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Stock Insurance Companies
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company is in the business to sell insurance but the company is divided into stocks that the owners of the company own.
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Mutual Insurance Company
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The insured are also the owners of the company. As owners, they can vote to elect the management of the company. Profits are returned to the insured.
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Assessment Companies Assessment Mutuals |
Providing primarily fire and windstorm insurance for small towns and farmers. Assessment mutual charge members a pro rate share of losses at the end of each policy period.
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Reciprocal Company
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reciprocal means to give and take. All members insure each other and share the losses with each other. Example : Lloyd's of Londen |
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Attorney in fact
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someone who is empowered to handle all of the business of the reciprocal.
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Fraternal Benefit Societies
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incorporated society or order without capital stock that is operated on the lodge system and conducted soley for the benefit of its members and their beneficiaries and not for profit.
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Risk Retention Groups
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Group self - insurance programs or group captive insurance companies. Gives businesses more options when insuring their goods.
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Purchasing Groups (PGs)
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same as risk retention look |
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Self Insurance
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you have no insurance the business takes all of risk.
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Residual Market Insurance
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Insurance that is not ordinary available from private insurers and may be provided by the government, examples include flood insurance which is provided by the federal government and workers compensation benefits which may be provided by state funds.
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Examples of Residual Market Insurance
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war risk insurance nuclear energy liability insurance flood insurance federal crop insurance |
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What are the four lines of insurance?
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1. property 2. casualty 3. life 4. health and disability |
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Monoline Insurance Company
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insurance company that only sells one line of the insurance industry
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Multiline Insurance Company
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An insurance company that sells many lines of insurance.
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Property Insurance
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Includes many types of insurance designed to handle property risk - risk that we will suffer financial loss because something we own is damaged or destroyed.
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Dwelling Homeowners Commerical Property Inland Marine Ocean Marine Crime are all examples of what type of insurance |
Property Insurance
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Casualty Insurance
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Considered to be insurance for a liability risk. Example auto insurance for when you are at fault of the auto accident.
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1. Aviation 2. Auto 3. Worker Compensation 4. Surety Bonds are all examples of what type of line of insurance |
Casualty Insurance
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Personal Lines
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are property and casualty coverages that protect and individual or family.
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Commercial Lines
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are coverages designed for business
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What are the responsibility of an insurance agent? |
Selling insurance Issuing and countersigning policies Collecting premiums Providing a link between the insured and the insurance company. |
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Countersigning |
Means the agent signs each new policy prepared by the company before delivering it to the insured. |
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Field underwriting |
Using preestablished criteria to seek out the type of business that is likely to be acceptable to the company. |
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Quotation |
a ball park premium for the proposed coverage. |
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Suspense |
A diary system that alerts the agent before the policy renewal time. |
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Service needs |
When an agent is available to assist the insured with name change. Help with filing claims |
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Errors and omissions insurance |
Liability insurance for the insurance agent. |
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Suspense/Diary system |
diary system that alerts the agent before the policy renewal time. |
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Service Needs |
such as a name change or a change in the method of premium payment and maintain accurate records of all such changed requested by the insured. |
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Errors and Omissions insurance |
insurance should be purchased by agents to protect themselves against legal liability arising from inadvertent errors or omissions |
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Professional designations |
from educational organizations such as the american institute for chartered property. |
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Agents also have responsibilities toward the insurance company or companies they represent. Agents must: 1. 2. 3. 4. 5. |
1. be loyal to the insurer's interest and avoid engaging in any business activities that competes or interferes with the insurer's business; 2.obey all legal instruction provided by the insurer 3. deposit funds belonging to the insurer in a separate account in the insurer's name. 4. preform all duties wight the degree of care and skill that a reasonably prudent person would exercise in the same circumstances; and. 5. keep the insurer informed of all facts related to the agency relationship. |
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Agency |
agency exists only as a part of the principle. |
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Agent |
a person authorized to act on behalf of another principle. |
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Express authority |
is the authority specifically given to an agent either orally of i writing by the principal. |
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Implied authority |
is authority given by the insurance company to the agent that is not formally expressed or communicated . |
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Apparent authority |
is a doctrine that holds that an agent may have whatever authority a reasonable person would assume the agent has. |
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Exclusive/captive agency system |
the insurance company contract with agencies which are independent businesses to represent and sell insurance only for that insurance company. |
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Direct writer system |
the insurance company agents are actually employees, they receive a salary and commission. |
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Direct response system |
Companies sell through direct mail. |
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Independent agency system |
agencies that re independent contractors contract with several different companies to represent and sell insurance for those companies. |
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independent/non exclusive agent |
a free business person |
