Term
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Definition
| Money or revenue that a business receives for its products or services minus the cost it incurred to produce the goods or deliver the services |
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Term
| Businesses are structured on one of three ways: |
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Definition
1. Sole Porprietorship
2. A Partnership
3. Corporation |
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Term
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Definition
| Owned and Operated by one individual who is solely responsible for all debts for the business |
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Term
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Definition
| Owned by two or more people and all of those people are responsible for all debts of the business. If a partner dies, the partnership dissolves. |
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Term
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Definition
| Legal entity created by the authority of a governmental unit and that is separate and distinct from the people who own it. The corporation continues beyond the death of any of its owners. They can sue and be sued. |
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Term
| The first type of Insurance Co. is a Stock Insurance Companies |
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Definition
| Most all life and health insurance co. are stock co. They are owned by the people and org. that purchase shares of the co. stock. |
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Term
| The second type of Ins. Co. is Mutual Insurance Companies |
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Definition
| Owned by its policyowners and a portion of the profits are distributed to policyowners periodically. |
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Term
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Definition
| Process of converting from a stock co. to a mutual co. |
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Term
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Definition
| Process of coverting from a mutual co. to a stock co. Co. do this because there is greater flexibility in stock co. in buying and operating other types of co. Also, stock co. can raise operating funds by selling additional shares of stocks to other co. |
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Term
| The third type of Insurance Co. Org. is Fraternal Benefit Societies |
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Definition
| This organization is formed to provide social, as well as, insurance benefits to its members. Key fact: must have a representative form of govt. and operate through a lodge. |
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Term
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Definition
| Insurance Co. are financial institutions that own primarily financial assets, such as stocks and bonds rather than fixed assets like equipment and raw materials. These Institutions help people and businesses save, borrow, invest and manage money. |
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Term
| What are the two primary types of insurers? |
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Definition
| Life and Health Insurance Co's and Property/Casualty Insurance Companies. |
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Term
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Definition
| An organization that channels funds from those people who have a surplus to those that have a shortage of funds. Insurers are financial intermediaries because they take a portion of the money their customers pay and invest the money in business. |
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Term
| Gramm-Leach-Bliley (GLB) Act |
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Definition
| Removed regulatory barriers. The primary effect of the GLB Act is that the traditionally separate components of the financial services industry can enter into structural affiliations under the umbrella of a financial holding company, thus can distribute other's products. |
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Term
| The difference between mergers and acquisitions |
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Definition
| A merger is where the assets and liabilities of two companies are combined into one co. One of the Co. survives and the other does not. Acquisition is where one Corp. purchases a controlling interest of another but both survive. |
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Term
| Insurance Regulatory systems very from country to country. What the variances between US, India and Canada? |
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Definition
| US share govt. power between the federal system and lower level govt. (state). Canada also has a federal govt. and a lower level govt. (Providence). India rests solely with the National Insurance Regulatory and Development Authority (IRDA). |
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Term
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Definition
| U.S. Congress agreed to leave insurance regulatory to the states as long as Congress considered state regulations to be adequate. Basically this allows the States to have primary authority. |
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Term
| What do State Insurance Departments do? |
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Definition
| They make sure that insurers operating within the state comply with applicable state insurance laws and regulations. Most state insurance laws are similar because they are based on model laws by the National Assoc. of Ins. Commissionioners (NAIC) |
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Term
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Definition
| Their primary function is to promote uniformity of state regulation by developing model bills and encourages each state to pass them. A model bill is a sample law. |
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Term
| What is the Basic Accounting Equation? |
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Definition
| Assets = Liabilities + Owner's Equity The surplus is the amount by which the company's assets exceed its liabilities and capital. Owner's equity in a mutual company consists only of its surplus. |
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Term
| What is a Market Conduct Law? |
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Definition
| Each state has their own and these laws regulate how insurance companies conduct their business within that state. |
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Term
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Definition
| It is a standardized form that shows the terms, the conditions, benefits, and ownership rights of a particular type of insurance product. An insurance co. must file this with their state ins. dept. for approval before using it. |
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Term
| What is the Social Insurance Program? |
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Definition
| It is a welfare plan that is established by law and administered by a govt. and that provides the population with income security. They may provide cash payments to replace income loss because of old age, disability, death, occupational injury and unemployment. |
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