Florida Insurance Licenses

U S v Southeastern Underwriters Association

1944 ruling stating that insurance is a form of interstate commerce and therefore should be regulated by the federal government

McCarran-Ferguson Act

1945 Act exempting insurance from federal antitrust laws to the extent insurance is regulated by states

Fair Credit Reporting Act

1970 federal law requiring an individual to be informed if he or she is being investigated by an inspection company

Financial Services Modernization Act

1999 Act eliminating placed on financial institution, insurance companies, commercial banks, investment banks and retail brokerage from entering each other's line of business

Risk pooling

A basic principle of insurance whereby a large number contribute to cover the losses of a few

Mutual Insurers

A insurance characterized by having no capital stock and is owned by its policy owner and usually issues participating insurance

Adhesion Contract

A life insurance policy is a contract of adhesion because buyers must adhere to the terms of the contract already existence. They have no opportunity to negotiate terms, rates values, etc

Modified Endowment (MEC)

A life insurance policy under which the amount a policy owner pays in during the first years exceed the sum of net level premium that would have been payable to paid up future benefits in seven years

Personal Producing General Agency System PPGA

A method of marketing , selling and distributing insurance in which PPGA are compensated for business they personally sell and business sold by agents with whom the May subcontract. Subcontract agents are considered employees of the PPGA, not the insurer.

Career Agency System

A method of marketing, selling and distributing insurance, it is represented by agencies or branch offices committed to on going recruitment and development of career agents.

Facility of Payment Provision

A provision found most often in industrial policies permitting an insurer to pay all or a portion of the proceeds to someone who though not named in the policy has valid rights in certain situations

Medical Information Bureau

A service organization that collects medical data on life and health insurance applicants for member insurance companies

Independent Agency System

A system for maketing, selling and distributing insurance in which independent brokers are not affiliated with any one insurer but represents any number of insurers.

Disability Income Insurance

A type of health insurance coverage that provides for the payment of regular, periodic income should the insured become disabled from illness or injury.

Speculative Risk

A type of risk that involves the chance of both loss and gain ; not insurable

Void vs Voidable Contract

A void contact is agreement without legal effect, an invalid contract. A voidable contract is one that can be made void at the option of one or more parties to agreement.

Reinsurance (Reinsurer)

Acceptance by one or more insurers, called reinsurers, of a portion of the risk underwritten by another insurer who has contracted for the entire coverage

Misrepresentation

Act of making, issuing circulating or causing to be issued or circulated an estimate, illustration, circular,or statement do any kind that does not represent the correct policy terms, dividends r share of the surplus or the name of title fro any policy or class of policies that does not in fact reflect its true nature

Life Insurance

Actuarial or Mathematical principles and guarantees a specified sum of money upon death of person insured

What are the key terms factors evaluated in the health insurance underwriting process?

Age, occupation, physical condition, medical history, moral factors financial status and hobbies . The most important factors are medical history and occupation

Three Entities involved in the Concept of Agency

Agent Insured The insurance company

Multiple Employer Welfare Arrangement (MEWA)

Allow small employers to pull together to provide insurance benefits for their employees. any plan and involving more than one employer is a MEWA and is subject to licensure and regulations by the Office of Insurance Regulation. MEWA is self-funded and employers enjoy tax exempt status. Employees covered under MEWA are required by law to have an employment related bond

Time Payment of Claim Provision

Allows insurers 45 days after receiving notice and proof of loss in which to pay or deny the claim (In Florida)

Change of Beneficiary Provision

Allows the policy owner to change the policy beneficiary as so desired as long as beneficiary designation is revokable

The Reinstatement Provision

Allows the restoration of a policy that lapsed due to late payment back to active status. If insurer takes no action within 45 days the policy is considered reinstated automatically.

Group Permanent Life Insurance

Also known as whole life in the group plan market can be broken down into three different types offerings Group Ordinary Plans Group Paid Up Plans Group Universal Life Plans

Primary Insurance Amount (PIA)

Amount equal to a covered workers for Social Security retirement benefit at age 65 disability benefits.

Viatical Settlement

An agreement under which under which the owner of a life insurance policy sells the policy to another person in exchange for bargained payments which is generally less than expected death benefits under the policy

Wavier

An agreement waiving the company's liability for certain types or types of risk ordinarily covered in the policy; a volunteer giving up a legal, given right.

National Association of Health Underwriters NAHU

An organization of health insurance agent that is dedicated to supporting the health insurance industry and to advancing the quality of service provided by insurance professionals

Moral Hazard

An unhealthy habit such as smoking

Rollover IRA

And individual retirement account established with funds transferred from one IR a qualified retirement plan that the owner had terminated

Health Reimbursement Account

Another variation of health care funding pretax contribution for each employee to pay deductible, coinsurance, and copayment

Hazard

Any factor that gives rise to a peril (source of danger)

Health Saving Accounts (HSA)

Are designed to assist the small business owner and the self employee set aside tax advantage funds to help defray health cost

Limited Risk Policies (Dread Disease Policies)

Are designed to protect people against specific illness. Some state prohibit the sale of these policies

Certificate of Authority

Before any entity may operate as an insurer in this state, it must obtain a Certificate of Authority from the Office of Insurance

Revocable Beneficiary

Beneficiaries whose right in a policy are subject to the policy owner reserve right to revoke or change beneficiary designation and the rights of the surrender or make a loan on the policy without the beneficiary's consent

Irrevocable Beneficiary

Beneficiary whose interest cannot be revoked without his or her consent usually because the policy owner made the beneficiary designation without retaking the right to revoke

Binding Receipt

Binds the insurance company if the risk is approved as applied for, subject to any other conditions stated on the receipt.

Flexible Spending Account

Cafeteria plan that is funded with pretax employee contributions called Salary Reduction medium- large sized employers

Composite Rating

Can be used for groups of 10 or more and averages the cost of all employees charging the small premium for each, regardless of the nature variance of age and sex

11 Optional Provisions

Change of Occupation Misstatement of age or sex Other insurance with this insurer Insurance with other insurers Relation of Earning to Insurance Unpaid Premium Cancellation Conformity with state statues Insurance with other insurer Illegal occupation Intoxicant and Narcotics

Conditional

Characteristics of an insurance contract in that the payment of benefits is dependent on or a condition of the occurrence of the risk insured against

Limited Pay Whole Life

Characterized by premium payment only being made for a specified or limited number of years

Section 457 Plans

Deferred compensation plan for employees of state and local government in which amount deferred would not be included in gross income until they're actually received or made available.

Keogh Plans

Designed to fund retirement of self employed individuals, under which contributions to such plans are given a favorable tax treatment.

Common Disaster Provision

Designed to provide an alternative beneficiary in the event that the insured as well as the original beneficiary dies as the result of a common accident

Unilateral

Distinguishing characteristic of an insurance contract in that it is only the insurance company that please anything

Free Look Provision

Florida Law mandates a 10 day free look period for health insurance policies and a 30 day free look period for Medicare supplement and long term care

Grace Period

Florida Law requires 7 days on weekly premiums health policies, 10 days for health policies with premiums payable monthly and , 31 days for other health policies

Florida Free Look

Florida law allows life insurance and annuity applicants 14 days to inspect a policy that is delivered with the intent of issuing insurance coverage. Medicare supplements and long-term care policies a lot a 30 day free look. If the policy is that issued the applicant must be given a full refund

Policy Reserves

Funds held by the company to fulfill future claims

Physical Exam and Autopsy Provision

Give the insurer the right to have the insured physically examined periodically

Nonadmitted Insurance Company

Has not been licensed or authorized to transact insurance business in Florida

Health Maintenance Organization HMO

Health care management stressing preventive health care, early diagnosis and treatment on an outpatient basis. Person generally enroll voluntarily by paying a fixed fee periodically

Mortality

History of death

The State Court System

Identifies and make legal determination involving cases of conflict between insurance company and policy owners and enforces criminal penalties for violation of any directive of the insurance code

Misuse of Premium

Improper use of premium collected by insurance producer.

Relation of Earnings to Insurance Provision

In Florida indemnities payable to the insured may be reduced below $500 or the sum total benefits under all application coverage whichever is less

Legal Purpose

In contract law, the requirement that the object of, or reason for, the contract must be legal.

Alien Insurers

Incorporated in a country other than the US when doing business in the US

Franchise Life

Individually own policies for small groups

Reciprocal Insurer

Insurance company characterized by the facts its policyholder insure the risk of other policy holders

Stock Insurers

Insurance company owned and controlled by group of stockholders whose investment in the company provides the safety margin necessary in issuance of guaranteed, fixed premium, nonparticipating policies

Risk Transference

Is the act of shifting the responsibility to another in the form of an insurance contract. Purchasing insurance does not eliminate risk entirely; however, it is one of the most effective ways of transferring risk

Constructive Delivery

Is the point at which the insurer releases control of the contract to another party, such as the agent, for unconditional delivery to the insured.

The Florida Association of Insurance and Financial Advisors (FAIFA)

Is to enhance the ability of members to provide financial security for their clients through appropriate legislative action,continue education, professional skills development, and promotion of ethical conduct of agents and others engaged in insurance and related financial services. FAIFA defines appropriate and inappropriate business behavior for life insurance agents as demonstrated by associate 's Code of ethics

The True Significance of Insurance

Is to substitute future economic certainty for uncertainty and to replace the unknown with a sense of security

Certificate of Coverage

Is what participants in group life insurance are issued

Estoppel

Legal impediment to denying the consequences of one's action or deeds if they lead to detrimental actions by another

Ordinary Insurance

Life insurance of commercial companies NOT issued on the weekly premium basis; amount of protection is us usually $1000 or more

Modify Community Rating

Means that all small groups are afforded the same pricing for everyone in the same category or class identical by county of residence. Regulations do acquiesce somewhat permitting a limited 15% plus or minus rate variance from the approved community rate to compensate for health changes and/or playing experience

Proof of Loss Provision

Means that the insured must supply the insurer with some evidence that the loss actually occurred and to what extent. The claimant has 90 days to supply proof.

Uniform Simultaneous Death Act

Model law that states when an insured and beneficiary die at the same time it is presumed that the insured survived the beneficiary

Three Premium Factor

Morbidity, Interest, Expenses

Demutualization

Mutual company turn to a stock company

Fraternal Benefit Insurer

Nonprofit benevolent organization that provides insurance to its members.

Risk Avoidance

Occurs when individuals evade risk entirely.

Hospital Fixed Rate Policies

Offers daily, weekly, or monthly payments of a specific amount specified amount is based on the number of day insured is hospitalized

Physician Expenses

Office visits, non surgical

Foreign Insurers

One licensed and doing business in a state other than the one in which it is incorporated

Settlement Options

Optional modes of settlement provided by most life insurance policies in lieu of lump sum payment. Usually option are lumps sum cash, interest only, fixed period, fixed amount and life income

Claim Form Provision

Outlines the insurers responsibility to provide the claimant with the specific forms the insurer requires within 15 days after receiving the insurer notice of claim.

The Department of Financial Services Headed by the Chief Financial Officer

Oversees the insurance industry in accordance with the provisions of the insurance code

Medical Expense Insurance

Pays benefits for non surgical doctors' fees commonly rendered in a hospital; sometimes pays for home and office calls

Whole Life Insurance

Permanent level insurance protection for the "whole of life" from policy issue to the death of the insured

Indexed Whole Life

Policy whose death benefit increases according to the rate of inflation, usually tied to CPI

Twisting

Practice of inducing a policy owner with one company to lapse, forfeit or surrender a life insurance policy for the purpose of taking out a policy in another company

Beneficiary Designation Options

Primary Secondary Tertiary

Underwriting

Process through which an insurer determines whether, and or what the basis, an insurance application will be accepted.

Self Insurance (Self Insurer)

Program for, providing insurance financed entirely through the means of the policy owner,

Legal Action Provision

Prohibits insured from taking legal action against the insurer due to a claim for 60 days from the date of proof of loss if claim is disputed. Legal action in Florida cannot be taken before 60 days nor 5 years after the date of loss

Pre Existing Clause

Protect insurer from adverse selection

Health Insurance Portability and Accountability Act of 1996 ( HIPAA)

Protects and insured persons insurability. Under HIPAA, if a person has been insured consecutively under a group health plan for the past 18 months and does not have access to other health insurance, a new insurance company cannot refuse to cover the person and cannot impose pre-existing conditions or a waiting period before providing coverage

Prepaid Limited Health Service Organization (PLHSO)

Provider panel, limited health services, ambulance, dental care vision, mental health, substance abuse care, chiropractic podiatric care, and pharmaceutical services provided ; no coverage for inpatient, hospital surgical, or emergency services

Annuities

Provides a stream of income by making a series of payment to annuitant for a specific period of time or for his/ her life

Disability Income

Provides and income stream if individual is unable to continue working for a period of time. In order to qualify for disability benefits individuals must be 20% disabled.

The Chief Financial Officer is responsible for

Regulations of insurance agencies Insurance fraud Customer protection

Independent Agent

Represents several insurers and their different insurance products

Insurable Interest

Requirement of insurance contracts that loss must be sustained by applicant upon the death or disability of another and loss must be sufficient to warrant compensation.

Rebating

Returning part of the commission or giving anything else of value to the insured as an inducement to buy the policy. In some states, it is offense by both the agent and the person receiving the rebate

Parol Evidence Rule

Rule of contract law that brings all verbal statements into written contract and disallows any changes or modifications to the contract by oral evidence

1035 Exchange

Section 1035 of tax code allows policy owner to exchange their policy for another to avoid tax on gains

Adverse Selection

Selection against the company. Tendency of the less favorable insurance risks to seek or continue insurance to a greater extent than others. Also, tendency of policy owners to take advantage of favorable options in insurance contracts.

Mixed Company

Sells both Par and non par policies

The Florida Life Insurance Solicitation Law

Spells out the information and procedures require of agents and ensures when proposing life insurance to a prospective buyer and this otherwise specifically included the following products or exempt from law. Annuities, credit life insurance, group life insurance, life insurance policy issued in connection with pension and welfare plans as defined by and which are subject to ERISA, variable life insurance under which the death benefits and cash values varies in accordance with unit values of investments held in separate accounts

Representation

Statement made by applicants on their application for insurance that they represent as being substantially true to the best of their knowledge and belief, but that are not warranted as exact in every detail

Warranties

Statements made on an application for insurance that are warranted to be true; that is they are exact in every detail as opposed to representations. Statements on application for insurance are rarely warranties, unless fraud is involved.

Accelerated Benefits

The early payment of some portion of the policy face amount should the insured suffer from terminal illness or injury

Cash Value

The equity of "saving" accumulation in whole life policy

Peril

The immediate specific event causing loss or giving rise risk

Pre certification

The insurer's approval of an insured's entering a hospital. Many health policies require pre certification as part of an effort to control cost.

Taxable Wage Base

The maximum amount of earnings upon which FICA taxes must be paid.

Offer and Acceptance

The offer may be made by the applicant by signing the application, paying the first premium and, if necessary, submitting to a physical examination. Policy issuance, as applied for, constitutes acceptance by the company. Or, the offer may be made by the company when no premium payment is submitted with the application. Premium payment on the offered policy the constitutes acceptance by the applicant.

Leeway or "Basket" Provision

This provision spells out the terms that allow the domestic insurers the right to invest a certain percent of their total assets in loans or certain other investments

Mandatory Second Opinion

To control cost, many health policies provide that, in order to be eligible for benefits, insureds must get a second opinion before receiving nonlife-threatening surgery

Simplified Employee Pension Plan (SEP)

Type of qualified retirement plan under which the employer contributes to an individual retirement account set up and maintain by the employee.

Moral Hazard

Typically habits such as Smoking

Valued vs Reimbursement Contract

Valued contract is a contract of insurance that pays a stated amount in the event of loss. Reimbursement (indemnity) contracts pay the amount of loss only.

Stranger Originated Life Insurance (STOLI)

When investigators persuades consumers to take out new life insurance policy's with investors names as beneficiary. STOLI is also called the Investor Originated Life Insurance (IOLI). Many states view these arrangements as fraudulent.

Date the Policy Is issued

When the initial premium deposit is NOT collected and submitted with the application" the date of policy is issued " would be considered the effective date of the policy is long as the require premium payment is made within the appropriate timeframe

Cancellation Provision

When the insurance company exercises it's right to cancel a policy the insured must be notified 45 days in advance and must be reimbursed for any prepaid premiums

Conversion Provision

Which allows the covered individual 31 days to convert the group coverage to an individual plan without evidence of insurability if their employment is terminated. Any death within the conversion period is covered

Modified Whole Life Insurance

While life insurance with premiums payable during the first few years usually five years only slightly larger than the rate for term insurance. Premiums are high for ordinary life at ordinary age but longer than the rate that the attained age at the time of charge

Single Premium Whole Life

Whole life insurance for which the entire premium is paid in one lump sum at the beginning of the contract

Captive Agent

Work for one insurer and sells only that insurers product

The National Association of Life Underwriters

Works for the best interest of policy owners and broadening opportunities for individual agents, promotes high ethical standards and provides community service projects and continuing education for agents

Exclusive Provider Organization (EPO)

Written agreement with providers for certain services for certain insureds

Federal Trade Commission

[FTC] sought to control the advertising and sales literary used by health insurance industry

Florida Life and Health Guaranty Association

liability for contractual obligations of an insolvent insurer cannot exceed $100,000 cash value or $300,000 for all benefits including cash value with respect to any one life

Stop Loss Feature

Are in major medical contract sevens to help reduce these cost

Pure Risk

Involves Possibility of loss ONLY. ..Only pure risk are insurable

Mutualization

Stock company turns to mutual company

Ambulatory Surgery

Surgery performed on a outpatient basis

Morbidity

Takes into account the likelihood a person will get sick or injured.

The Outline of Coverage contains

A Summary of the principal exclusions and limitations of the policy A summary of the renewal and cancellation provisions of the policy A briefing of the benefits and coverage provided in the policy

Competent Parties

A competent part is one who is capable of understanding the contract being agreed to. Minors, mentally , and under the influence are not considered competent

Risk Retention Groups

A form of mutual insurers that provide liability coverage to insure groups of individuals who are of the same group class

Fraud

An act of deceit, misrepresentation of a material fact knowingly, with the intention of having another person rely on that fact and consequently suffer a financial hardship

Misdemeanor penalties set forth by the Insurance Code

An individual who knowily make a false or otherwise fraudulent application for any licenses or who violates any provision in the Insurance Code shall upon conviction and in addition to any denial, suspension, revocation, or refusal to renew or continue any Licenses be punishable as a misdemeanor by a fine of not less than $500 nor more than $3500 or by imprisonment for not more than six months or both for each violation in Lou of a bottle of the chief financial officer made at his discretion impose an administrative penalty of up to $50,000 if a cease and desist order is violated. In lieu of above of the chief financial officer may at his discretion impose an administrative penalty up to $50,000 if a cease and desist order is violated it addition to a fine the chief financial officer can access an amount equal to the amount of commission the agent earned. Willfully submitting fraudulent signatures on an application or policy related document is a third-degree felony and is subject to a $5000 fine for each nonwillful violation and a $75,000 fine for each willful violation

National Association of Insurance and Financial Advisors NAIFA

An organization of life insurance agents that dedicated to supporting the life insurance industry and to advancing the quality of service provide by insurance professionals.

Credit Life

Applies to the relationship between theater groups and creditor groups

Health Savings Account (HSA)

Are bases on high deductible contributions plan 55 and older may make additional annual contribution of $1000

Expenses

Are taken into account and are included in all premiums to cover cost

Lloyd of London

As association of individuals and companies that underwrite insurance on their own accounts and provides specialized coverages

Preferred Provider Organization PPO

Association of health care providers, such as doctors and hospitals that agree to, provide health care to members of a particular group at fees negotiated in advance.

National Association of Insurance Commissioner NAIC

Association of state insurance commissioner active in insurance regulatory problems and in forming and recommending model legislation and requirements

Implied Authority

Authority not specifically granted to the agent in the contract of agency, but which common sense dictates the agent has. It enables the agent to carry out routine responsibilities

Law of Large Number

Basic principle of insurance that the larger the number of individuals risk combined into a group, the more certainty their is in predicting the degree or amount of loss that will be incurred in a given time

Domestic Insurers

Company doing business in the state in which it is incorporated

Supplementary and Comprehensive Major Plans

Contain deductible and coinsurance

Right of Assignment

Contract between the policy owners who is not necessarily the insured. The contract, can be transferred to another with written notice to the insurer.

Endowment Policies

Contract providing for payment of the face amount at the end of a fixed period, at specified age of the insured, or the insured's death before the end of the stead period.

Traditional IRA

Contributions are nontaxable income until the funds are withdrawn.

Federal Insurance Contributions ACTS (FICA)

Contributions made it through payroll taxes to find Social Security benefits

Surgical Expenses

Cost of surgeon services (Anesthesiologist)

Preliminary Term for Interim Coverage

Coverage that is designed to allow the insured immediate coverage and yet allows insured to defer premium payments

Hospital Expenses

Daily room and board, misc expenses

Increasing Term

Death benefits increase periodically over policy term

Per Capita

Death proceeds from an insurance policy are divided equally among the living primary beneficiaries

Per Stirpes

Death proceeds from an insurance policy are divided equally among the named beneficiaries. If named beneficiary is deceased his or her share goes to the living descendant of that individual

Consideration

Element of a binding contract; acceptance but the company of payment of the premium and statements made by the prospective insured in the application

Contributory Plan

Employee contributes a portion of the premium and the employer pays the rest

Noncontributory Plan

Employer pays entire premium cost; employee does not contribute; allows employer control and 100% participation

12 Mandatory Provisions

Entire Contract Time Limit on Certain Defenses Grace Period Reinstatement Notice of Claims Claim Form, Proof of Loss Time Payment of Claim Payment Claim Physical Exam and Autopsy Legal Action, Change of Beneficiaries

State Guaranty Association

Established by each state to support insures and protect consumers in case of insurer insolvency, guaranty association are funded by insurers through assessments

The Code of Ethic

Establishes a broad outline defining appropriate and inappropriate business behavior for life insurance agents. It also establishes the activities of agents as one of public trust.

The State Legislature

Establishes and maintains the legal framework for state laws relating to insurance. The legislature establish a Department of Financial Services and the Office of Insurance Regulations to administer the Insurance Code

Health Insurance

Evolved from scientific principles to provide funds for medical expenses due to sickness or injury and to cover loss of income during disability

Level Term

Face value remains unchanged from the date the policy comes into force to the date the policy expires

Decreasing Terms

Face value slowly decreases in scheduled steps from the date the policy comes into force to the date the policy expires, while the premium remains level.

Concealment

Failure of the insured to disclose to the company a fact material to the acceptance of the risk at the time application is made

Aleatory Contract

Feature of insurance in a contract in that there is an element of chance for both parties and that the dollar given by the policyholder (premiums) and the insurer (benefits) may not be equal.

Insurance

Financial protection against loss or harm

Roth IRA

Fine is our text as income before the contribution is made.

Three types of Deductibles

Flat Corridor Integrated

Pre-existing Conditions

Florida law prohibits individual health insurance policies other than disability income from excluding coverage for a pre-existing condition for longer than 24 months following the effective date of coverage for a condition that had manifested 24 months prior to coverage. Medicare supplement policy may not exclude benefits based on a pre-existing condition if the individual has a continuous period of credible coverage of at least six months as of the date of application for coverage

Group Insurance

Insurance coverage for groups of persons, usually employee of the company under one master contract.

Level Premium Funding

Insurance plan, under which instead of an annual increasing premium paid back in the early years, inadequate premiums are paid in later years.

Securities and Exchange Commission

Insurance products to be regulated by the states or securities to be regulated federally. The SEC also regulates variable life insurance.

Direct Selling

Insurer deal directly with customer selling its policies through vending machines advertisement and salaried sales representatives no agent or broker involved

Home Service Insurer

Insurer that offers relatively small policies with premiums payable on a weekly basis, collected by agents at the policy owners home.

Contract

Is a binding on parties involved and is enforceable by law. The elements that compose a legal binding contract perpetuating isn insurance transactions are. Offer and Acceptance + Consideration + Legal Purpose + Competent Parties = Legal Binding Contract

Cease and Desist Order

Is a legal court order preventing an individual or entity from continuing to do business or perform that which is being addressed (cease) to refrain from doing it again in the future (desist)

Experience Rating

Is a method of establishing a premium for the group based on the group previous claims experience

Multiple Employer Trust (MET)

Is a popular method of marketing group benefits to employers who have a small number of employees. Note that MET's may structure to provide a single type of insurance or a Y range of coverages

Flat Deductible

Is a stated amount that the insured must pay policy benefit become payable ( most familiar

Florida Health Insurance Coverage Continuation Act (Mini-COBRA)

Is akin to COBRA and is referred to as Mini-COBRA.

Time Limit on Certain Defenses

Is akin to the in contest ability clause except that fradulent statement on health application can be contested by anytime unless the policy is guaranteed renewable

Group Ordinary Plans

Is any type of group life plan that uses cash value life insurance in the plan

Risk Retention

Is being aware of the risk involved and taking precautions for financial protection.

Conditional Receipt

Is given by a company to put the applicants first premium payment. The policy, if approved becomes effective from the date of the receipt.

Date of Receipt

Is issue when the initial premium deposit is collected and would be considered the effective date of the policy

The Legal Reserve

Is mandatory according to the Florida standard valuation long it means that a certain amount of money is set aside to fulfill future claims that amount is to be set aside the time you use it to cut calculation defined by the insurance, which takes into account mortality tables and interest rates the regal reserve is display as the liability on the companies

High Deductible Health Plans (HDHP)

Is one that offers low premium but requires the insured to pay a relatively high deductible

Admitted Insurance Company

Is one that the Office of a Insurance Regulations have licensed to transact insurance business in Florida in accordance with state laws.

Coinsurance

Is that portion of the balance due that, each participant pays

Affordable Care Act

May Have a 90 day grace period to pay outstading premiums

Indemnity Contract

Pays the amount of the loss by paying the amount necessary to return the insured to the same position she\he was before the loss occurred

Fiduciary

Person in a position of special trust and.confidence in handling or supervising affairs or refunds of another.

Substandard Risk

Person who is conspired an under average or impaired insurance risk because of physical condition, family or personal history of disease, occupation, residence in unhealthy climate or dangerous habit

Notice of Claim Provision

Pertains to a timely notice given to the insurer when a claim is being made (within 20 days). If claim is for disability income payment for two or more years, insured must submit proof of loss every 6 months

Three Risk Factors

Physical Condition, Moral Hazard Occupation

Physical Hazard

Physical Nature such as Cancer

401(k) Plans

Plan allowing employees to take the money as usual in their paycheck or defer a specific amount from their paycheck. Typically, the employer will match the contribution made by the employee. Amounts deferred are not included in the employees gross income and the funds and earnings are not taxable until distribution.

Group Paid Up Plan

Plans combine term life insurance (paid by employers) and whole life (paid by employee). The death benefit is a total of the two plans. At retirement or termination the employee is entitled to the cash value (paid up) policy.

Group Universal Life Plan

Plans offer is a greater degree of flexibility then is usually found in other groups life plans. The employee pays most of the premium payments; however they are given certain latitude in selecting the amount of insurance and the premium amount to be paid.

Graded Premium Whole Life

Provides lower than normal premium rates during the first few policy years, with premium increasing gradually each year. After the preliminary period, level off and remain constant

Industrial Insurance

Provides modest benefits on a relatively short benefit period. Premiums are collected on a weekly or monthly basis by an agent calling at insured home

The Florida Replacement Rule

Sets for the requirements and procedures to be followed by insurance companies and agents when a proposal is being made in which a prospective life insurance buyer will be replacing existing insurance contracts with the proposed new insurance.

Insurance group categories

Single employer groups Multiple employer groups Labor unions Trade associations Creditor/debtor groups Fratnel organizations

Convalescent Expenses

Skilled nursing facility expenses

Payment Claim Provision

Specifies how and to whom claims payment are made to

Entire Contract Provision

States the insurance policy represents the contract between the insurer and the policy owner in its entirety, assuring the policy owner no changes can be made once the contract is issued. The clause is the same for health insurance and life insurance policies

Morale Hazard

Stems from individuals state of mind such as Road Rage

Spendthrift Trust Clause

Stipulates that to the extent permitted by law policy proceeds shall not be subject to the claims of creditors of the beneficiary or policy owner

Risk Reduction

Takes place when the chances of loss are lessened.

403(b) Plans

Tax sheltered annuity plan similar to a 401(k) plan except it is for nonprofit organizations.

Blanket Life

Temporary coverage of a specific hazard for a specific group

Two types of insurance plans fro group life insurance

Term Life Insurance Whole Life (permanent) Insurance

Four Entities that exercise Regulatory Authority over the insurance industry in Florida

The State Legislature The Department of Financial Services The Office of Insurance Regulation The State Court Systen

Apparent Authority

The authority an agency appears to have, based on the principal's actions, words, deeds, or because of circumstances the principal.

Average indexed Monthly Earnings (AIME)

The bases use for calculating the primary insurance amount for Social Security benefits.

Churning

The practice in which policy values in an existing life insurance policy or annuity contact are used to, purchase another policy or contract with that same insurer for the purpose of earning additional premiums or commissions without an objectively reasonable basis for believing that the new policy will result in a actual and demonstrate benefit.

Medical Cost Management

The process of controlling how policy holders utilize their policies

Case Management

The professional arrangement and coordination of health services through assessment, service plan development, and monitoring

Interest

The same as life insurance a portion of all premiums is invested to earn interest. Interest earned can reduce premium cost

Express Authority

The specific authority given in writing to the agent in the contract of agency.

Integrated Deductible

Works in conjunction with supplementary policies as well; however whatever amount the basic medical expenses cover is applied to the deductible

The Commissioner of the Office of Insurance Regulation

Works in conjunction with the Department of Financial Services to oversee the insurance industry in accordance with the provisions of the Insurance Code