Domestic, Foreign and Alien Insurers

Residual Market

Are insurance programes that are underwritten and controlled by the government

managerial System

Branch manager (supervises agents} Salaried Agents can be insurer's employees or independent contractors

Government insurers

are funded with taxes and serve national and state social purposes

A foreign

is an insurance company that is incorporated in another state or territorial

assuming insurer

is the other insurer that the ceding insurer takes responiablity from

Facultative reinsuance

is when a reinsurance purchase on a specific policy

Domestic

insurer is an insurance company that is incorporated in this state

An Alien

is an insurance comlpany that is incorpated outside the U.S

reinsurance treaty

is when a reinsurer is bound to take all risk ceding to it. They are usually negotiated for a period of a year or longer

Reinsurance

isa contranct under which one insurance company (the reinsurer) indemnifies anouther insurance company for part or of its liabilities

Direct Response Marketing System

No agents Company adverises directly to consumers (through mail, internet, television, other mass marketing) Consumers apply directly to the company

Financial Status

The financial strength and Stability of an insurance company are two vitally important factors

Ceding insurer

The orginating compnay that procures insurance on itself form another insurer

General Agency System

general agent-entrepreneur represents 1 company Exclusive Compensation and commissions Appoints subagents

Exclusive/captive

1 agent represents 1 company Exclusive commissions on personal sales Renewal can only be placed with the appointing insurer

Independent/American Agency System

1 independent agent represents serveral companies Nonexlusive Comissions on personal sales Business renewal with any company