Shared Flashcard Set

Details

Insurance company types and classifications
see title
19
Insurance
Undergraduate 1
11/17/2011

Additional Insurance Flashcards

 


 

Cards

Term
WHAT IS AN "ADMITTED" COMPANY?
Definition
A company approved to do business in a given state is known as an "admitted" company and is considered to be authorized.
Term
WHAT IS A "NONADMITTED" COMPANY?
Definition
A company that is not approved to do business in a given state and is considered to be unauthorized.
Term
WHAT IS A COMPANY GIVEN ONCE THEY ARE APPROVED TO OPERATE IN A STATE?
Definition
Certificate of Authority.
Term
WHAT IS A COMPANY KNOWN AS IF THEY MAY OPERATE IN A STATE AND ARE NOT CONSIDERED AN "ADMITTED" COMPANY?
Definition
Surplus lines companies. They market their products through surplus lines agents.
Term
WHAT IS DIFFERENT ABOUT SURPLUS LINES COMPANIES?
Definition
They do not file their rates and forms and they don't participate in the state's guaranty funds.
Term
WHAT ARE THE THREE CLASSIFICATIONS OF INSURANCE COMPANIES?
Definition

1) Domestic Insurer-an insurance company formed and domiciled under the laws of a particular state.

2) Foreign Insurer-An insurance company formed under the laws of the United States or a particular state of the United States.

3) Alien Insurer-An insurance company formed under the laws of a country other than the U.S, its districts, territories, commonwealths, possessions and the Panama Canal Zone.

Term
WHAT IS A STOCK COMPANY?
Definition
An incorporated insurance company with its capital divided into shares. Owned by its stockholders.
Term
WHAT IS A MUTUAL COMPANY?
Definition
An incorporated insurance company without permanent stock that is owned by its stockholders.
Term
WHAT IS A RECIPROCAL?
Definition

A member of the reciprocal agrees to share in the risk. Not a company, but a corporate body. The corporate body consists of members, represented by underwriters who place the risk among its members. In case of a loss, the amount paid is shared by the participating members who accepted the risk.

Term
WHAT IS A FRATERNAL BENEFIT SOCIETY?
Definition

An incorporated society, without capital stock, that is operated on the lodge system and conducted solely for the benefit of its members and their beneficiaries, and not for profit.

Term
WHAT IS RISK RETENTION AND PURCHASING GROUPS?
Definition

Product manufacturers establish group self-insurance programs called risk retention groups to protect them against product liability exposures.

 

When they do it on a group basis, its called a purchasing group.

Term
WHAT IS A GOVERNMENT INSURER?
Definition

The government sometimes steps in to provide insurance that is not ordinarily available from private insurers.

 

ex. War risk insurance, nuclear energy liability insurance.

Term
WHAT IS A CAPTIVE INSURANCE COMPANY?
Definition

An insurance company that may apply to the commissioner for a license to conduct any and all insurance,

except

workers' compensation insurance, personal motor vehicle insurance or homeowner insurance.

Term
WHAT IS SELF INSURANCE?
Definition

Part or all of the risk of loss is borne without the benefit of insurance coverage to fall back on if a loss occurs.

Term

WHAT ARE THE 4 BASIC

DISTRIBUTION SYSTEMS

USED TO MARKET INSURANCE?

Definition

1) Exclusive Agency System.

2)Direct Writer System.

3)Direct Response System.

4) Independent Agency System.

Term

WHAT IS THE

EXCLUSIVE AGENCY

(OR CAPTIVE) SYSTEM?

Definition

The means of marketing insurance where the insurance company contracts with agencies, which are independent businesses, to represent and sell insurance only for that insurance company.

Term

WHAT IS THE

DIRECT WRITER

SYSTEM?

Definition

The means of marketing insurance where the insurance company's agents are actually employees.

Term

WHAT IS THE

DIRECT RESPONSE

SYSTEM?

Definition

A means for marketing insurance where the companies sell through direct mail or over the phone and use no agents.

Term

WHAT IS THE

INDEPENDENT AGENCY

SYSTEM?

Definition

A means for marketing insurance where independent contractors contract with several different companies to represent and sell for those companies.

Supporting users have an ad free experience!