Ch 1 - Basic Principles Of Life And Health Ins.

Front 1

Actuarial department

Back 1

This is the department that calculates policy rates, reserves and dividends

Front 2

Adjuster

Back 2

This is the person who investigates claims and arranges for them to be settled or denied. Captive agent works for one insurance company. Independent agent sells the insurance products of many companies.

Front 3

Alien insurer

Back 3

In the United States, this is an insurer whose principal office and domicile location is outside this country

Front 4

Admitted insurer

Back 4

This is an insurer who has received a certificate of authority from a state's department of insurance which authorizes them to conduct insurance business in that state

Front 5

Agent

Back 5

This is an individual or organization that's authorized to solicit, sell and transact (bind) coverage for specific insurance providers under the terms of one or more agent contracts

Front 6

Authorized insurer

Back 6

This is an admitted insurer

Front 7

Broker

Back 7

This is a person who represents himself or herself and the insured (i.e. The client or customer) Cannot bind coverage on behalf of an insurance carrier because they are not appointed as an agent

Front 8

Captive insurer

Back 8

This is an insurer that's established and owned by a parent firm for the purpose of ensuring the parent firms loss exposure

Front 9

Certificate of authority

Back 9

This is a license that's issued to an insurer by an insurance department (or equivalent state agency) that authorizes that company to conduct insurance business in that particular state

Front 10

Divisible surplus

Back 10

This is the amount of earnings that are paid to policy owners as dividends after the insurance company sets aside funds required to cover reserves operating expenses and general business purposes

Front 11

Domestic insurer

Back 11

This is an insurer with its principal or Home Office in the state in which it's authorized

Front 12

Foreign insurer

Back 12

This is an insurer whose principal office or domicile location is in a state that's different from the state in which it's transacting insurance business

Front 13

Fraternal benefit society

Back 13

This is a non profit benevolent organization that provides insurance to its members

Front 14

Independent insurance agency

Back 14

This is an agency with any number of insurance companies through contractual agreements and are compensated by commission or fee basis for the business they produce also known as the American agency system

Front 15

Insurance

Back 15

This is the transfer of risk through the pooling or accumulation of funds

Front 16

Insured

Back 16

This is the customer who receives insurance protection under an insurance policy

Front 17

Concept of insurance

Back 17

Define as the transfer of risk from one party to another through a legal contract

Front 18

Indemnify

Back 18

Restore insureds to the financial position they experienced before the insured loss

Front 19

Insurer

Back 19

The insurance company providing the insurance is considered the insurer

Front 20

Proprietary insurer

Back 20

Profit motivated stock company offering individual insurance, group insurance, industrial insurance or blanket insurance policies

Front 21

Government insurance or social insurance programs

Back 21

Old age survivors and disability insurance (OASDI) aka Social Security, Original Medicare (part a and B), Medicaid, Serviceman's group life insurance (SGLI), Veterans group life insurance (VGLI), National flood insurance program (NFIP), Federal crop insurance corporation (FCIC), Federal deposit insurance corporation (FDIC)

Front 22

Different lines of insurance

Back 22

(Life insurance and annuities), (Accident and health insurance), (Property and casualty insurance).

Front 23

Multi-line insurers

Back 23

Companies that sell more than one line of insurance

Front 24

Monoline insurer

Back 24

Companies that only sell one line of insurance

Front 25

Lloyds of London

Back 25

This is not an insurer but a group of individuals and companies that underwrite unusual insurance policies.

Front 26

Marketing division

Back 26

This is the division that's responsible for acquiring perspective applicants through various advertising media

Front 27

Mutual insurance company

Back 27

This is an insurance company that's characterized by having no capital stock, being owned by their policy owners and typically issuing participating insurance. They receive dividends.

Front 28

Non admitted (unauthorized) insurer

Back 28

This is an insurer that has not received a certificate of authority from a state's department of insurance which authorizes it to conduct insurance business in that state

Front 29

Stock insurance company

Back 29

This is an insurance company that's owned and controlled by a group of stockholders or shareholders whose investment in the company provides the safety margin necessary in the insurance of guaranteed fixed premium (non participating policies)

Front 30

Non participating policy

Back 30

This is a policy that's typically issued by stock companies this type of policy does not allow policy owners to participate in dividends or to elect the board of the directors

Front 31

Participating policy

Back 31

This is an insurance policy that pays policy dividends to policy owners by receiving dividends. Policy owners share in the company's divisible surplus and also elect the company's board of directors

Front 32

Personal producing general agency (PPGA)

Back 32

Similar to career agency however, this is an agency that represents one or more specific insurers. A (PPGA) is an agency system that don't recruit train or supervise career agents

Front 33

Policy owner

Back 33

This is a person who's responsible for the payment of premiums and who possesses all ownership rights of the contract. Typically the policy owner is also the insured

Front 34

Private (Commercial) insurer

Back 34

This is an insurer that's owned by private citizens or groups that offer one or more insurance lines commercial insurers are not government owned

Front 35

Producer

Back 35

This is an individual who's licensed by one or more States to sell solicit or transact insurance in a given state

Front 36

Proposed insured

Back 36

This is the person whose life will be covered by an insurance policy see also insured

Front 37

Public adjuster

Back 37

This person acts on behalf of a consumer who is settling an insurance claim

Front 38

Reciprocal insurer

Back 38

This is an unincorporated organization in which all members insure one another and an attorney-in-fact manages it all

Front 39

Reinsurance

Back 39

This is the acceptance by one or more insurers (referred to as reinsurers) of a portion of the risk being underwritten by another insurer that has contracted with a consumer to cover the entire risk

Front 40

Re insurer

Back 40

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

Front 41

Risk retention group (RRG)

Back 41

This is a group owned liability insurer that assumes and spreads product liability and other forms of commercial liability risks among its members with a common bond.

Front 42

Sales department

Back 42

This department acquires clients through one-on-one meetings in which consumers complete applications

Front 43

Self insurer

Back 43

This is a company that establishes a self funded plan to cover potential loss rather than transferring the risk to an insurance company

Front 44

Service representative

Back 44

Provides customer service. These service representatives are not required to obtain a license because they neither sell nor solicit coverage and they don't bind coverage

Front 45

Solicitors

Back 45

These are individuals who solicit and schedule sales meetings between customers and the producers for whom they work. They are not licensed to sell insurance.

Front 46

Surplus lines insurance

Back 46

This is non traditional insurance that's only available from a surplus lines insurer. This type of insurance provides coverage for substandard or unusual risks and is not available through private or commercial carriers

Front 47

Unauthorized insurer

Back 47

This is a non admitted insurer

Front 48

Underwriting department

Back 48

This is the department with an insurance company that's responsible for reviewing applications approving or declining applications and assigning risk classifications

Front 49

Mutualization

Back 49

Stock company converting to a mutual company

Front 50

Demutualization

Back 50

Mutual company converting to a stock company

Front 51

Mixed plan

Back 51

If an insurance company issues both participating and non participating policies

Front 52

Risk Purchasing Group (RPG)

Back 52

Same as RRG's except they purchase insurance from an insurance company, they don't themselves act as insurers

Front 53

Career agency

Back 53

Agents are recruited trained and supervised by a general agent (GA) who has a vested right in any business that's written by the agents who sell for the agency. These agencies primarily build staff.