Limited Lines License

Mutual insurance company

An insurance company that is owned by policyholders. Policy holders have voting rights in the company.

Stock insurance company

An insurance company that is owned by stockholders who elect a board of directors to oversee the operation of the company.

Foreign Insurer

An insurer who is headquartered in a different state from where it does business.

Domestic Insurer

An insurer who is headquartered in the state where it does business.

Alien Insurer

An insurer who is headquarters in a country outside of the United States.

Risk

An unknown outcome or uncertainty of loss.

Certificate of Authority

Certificate issued by the commissioner of insurance to companies that allows them to sell insurance in their state.

Agency

Independent organizations that hire and support sales agents and producers.

Admitted insurers

Insurers who are authorized by the States Commissioner of insurance to do business in the state.

Non Admitted insurers

Insurers who are no authorized to do business in the state.

Agent or Producer

Licensed individuals who represent the insurance company when selling insurance policies.

Pure Risk

Only a chance of loss, no chance of gain. Can get insurance for pure risks.

Surplus Lines Insurance

Provides coverage when the kind or amount of insurance is not available from an admitted insurer. They usually sell specialized coverages.

Indemnity

Restore the insured to the same financial condition as before a loss.

Independent Agent

Sells insurance for more than one carrier.

Captive Agent

Sells insurance for only one carrier.

Insurer (principal)

The insurance company/carrier that is providing an insurance policy.

Insured

The person or organization who buys insurance to protect itself.

insurance

The transfer of risk. Insurance company takes your risk by paying for your losses.

Speculative Risk

A chance of loss or a chance of gain. Cannot get insurance for speculative risks.