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Definition
| doing business in a state where it is organized |
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Term
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| Doing business in a state other than its state of corporation |
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| Insurer incorporated in another country but was doing business in US |
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| Licensed by state insurance department to do business in that state |
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| not licensed to do business in a particular state |
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| placing business by a nonadmitted insurer is illegal |
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Definition
| specific agreement for producer to write business by a nonadmitted insurer when coverage is otherwise unavailable |
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| Forms of an insurance company |
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Definition
Stock - owned by shareholders
Mutual - owned by policy holders |
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Definition
| process of converting a mutual insurance company into a stock company |
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Definition
| insuring organization that writes mainly life insurance on member of a church, fraternal society, or nonprofit social organization |
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Definition
| unincorporated pool of funds owned by policyholders and managed by an attorney-in-fact |
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| Captive Insurance company |
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Definition
| insurance company owned by corporation(s) it insurance |
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Term
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Definition
| legal representative of an insurance company with express and implied authority to act on behalf of the insurer. |
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Term
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Definition
| broker authorized to place insurance with nonadmitted insurers in certain circumstances where no coverage available in that state |
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Term
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Definition
| Serve as intermediaries between the insurance company and their clients. May receive free from policyowner, a commission from insurer or some combination |
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Definition
| Help agents sell or service more complex lines of insurance |
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Term
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Definition
| GA is granted franchise by insurer to build agency force for marketing insurer's products in given geographical area |
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Term
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Definition
| Insurers establish branch offices in areas where they write business. Offices headed by branch managers |
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Term
| Personal Producing General Agent (PPGA) |
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Definition
| Experienced, successful agent sells insurance (not to build agency force) in a given geographic area. Must meet sales quotas but can represent other insurers |
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Term
| Independent Agency System |
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Definition
Agent represents several insurers or groups of insurers
Agent owns business written by agency |
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Term
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Definition
Agent represents only one insurer (or a group of affiliated insurers)
Insurer may own business written by agents |
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Term
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Definition
| transfer a portion of or all risk to another insurer |
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Term
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Definition
Treaty - Primary insurer agrees in advance to transfer a portion of some types of loss exposures covered by the primary insurer
Facultative - Optional for both primary insurer and reinsurer , each party retains "faculty" or privilege of accepting or rejecting reinsurance |
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Term
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Definition
| adjust claims using subcontractors in auto and homeowners where company is small, prefers outsourcing this function, or insured's are dispersed geographically |
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Term
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Definition
| Represent the policyowner for a fee. Help through the process and defend the policyowner interests |
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Term
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Definition
| Price charged for each unit of coverage |
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Term
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Definition
| Price charged to coverage provided by policy |
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Term
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| Group rate with average price that applies to each category of similar insured's |
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Term
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Definition
| rate for specific situation based on schedule that evaluates unique hazards |
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Term
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Definition
| Decided insurance is not interstate commerce nor subject to federal regulation |
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Term
| US v. South-Eastern Underwriters Association 1944 |
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Definition
| Held that insurance is interstate commerce and therefore subject to federal regulation |
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| Public Law 15 (McCarran-Ferguson Act) 1945 |
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Definition
| Determined that regulating interstate insurance is the responsibility of the individual states |
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| Financial Services Modernization Act 1999 |
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Definition
| Indicated that Federal government shall regulate banks but states will regulate insurance |
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Term
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Definition
| proposed rates must be approved by insurance department before they may be used by insurer |
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Term
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Definition
| allows insurers to file rates with commissioner and then begin those rates unless/until regulatory authority disapproves rates |
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Term
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Definition
| rates are filed with insurance commissioner within specified time after rates are first used. Insurance commissioner may disapprove rates if they are not in compliance with law |
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Term
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Definition
| requires prior approval of rates only if they differ from existing rates by atleast some specified percentage, such as 5 or 10 percent |
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Term
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Definition
| relies mainly on competitive forces in insurance marketplace to produce acceptable insurance rates |
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Term
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Definition
| limit portion of life insurance premium that can be used for expenses other than claims, measured by loss ratios |
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Term
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Definition
| that amount, with future premiums and interest, is sufficient to pay all policy claims and obligations as they come due |
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Term
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Definition
| in property and liability insurance, insurer's liability for future claims or premium refunds measured by the proportion of written premiums not yet earned by the insurer through the provision of protection for full policy period |
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Term
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Definition
| in property and liability insurance, insurer's liability for losses that have already occurred but that have not yet been paid or otherwise settled |
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Term
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Definition
| illegal practice of returning part of premium paid to policyowner (excluding a dividend) as price-cutting sales inducement. Considered unfairly discriminatory |
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Term
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Definition
| illegal practice in life insurance of using misrepresentation to induce a policyowner, to his or her disadvantage, to replace a life insurance policy with a new one |
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Term
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Definition
| Process of restoring an insurance company to financial stability |
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Term
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Definition
| Process of dissolving a finanically troubled insurance company |
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Term
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Definition
| state fund that at least partially protects consumers agaisnt insolvency of insurers |
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