LIFE INSURANCE
PARTICIPATING COMPANIES
ANOTHER NAME FOR MUTUAL COMPANIES BECAUSE THE POLICYOWNERS PARTICIPATE IN DIVIDENDS
OPEN CONTRACT
ALLOWS FRATERNAL BENEFIT SOCIETIES TO ASSESS THEIR CERTIFICATE HOLDERS (CHARGE ADDTIONAL, UNSCHEDULED PREMIUMS) IN TIMES OF FINANCIAL DIFFICULTY
COINSURANCE
ANOTHER CONCEPT COMMONLY FOUND IN MEDICAL INSURANCE POLICIES. IT MEANS THAT WITHIN A SPECIFIED COVERAGE RANGE, THE INSURED AND INSURER WILL SHARE THE ALLOWABLE EXPENSES.
DISCLOSURE AUTHORIZATION
APPLICANTS FOR INSURANCE MUST BE GIVEN ADVANCE WRITTEN NOTICE OF AN INSURER'S PRACTICES REGARDING THE COLLECTION AND USE OF PERSONAL INFORMATION RELATED TO INSURANCE TRANSACTIONS
FRATERNAL BENEFITS SOCIETIES
ARE PRIMARILY LIFE INSURANCE CARRIERS THAT EXIST AS A SOCIAL ORGANIZATIONS AND USUALLY ENGAGE IN CHARITABLE AND BENEVOLENT ACTIVITIES. ONE DISTINCTIVE CHARACTERISTIC IS THE OPEN CONTRACT.
PHYSICAL HAZARDS
ARISE FROM MATERIAL, STRUCTURA, OR OPERATIONL FEATURE OF A RISK SITUATION
MORAL HAZARDS
ARISE FROM PEOPLE'S VALUES AND HABITS
MORALE HAZARDS
ARISE OUT OF HUMAN CARELESSNESS OR IRRESPONSIBILITY
UNAUTHORIZED INSURER (NON ADMITTED
INSURER THAT IS NOT ENTITLED TO TRANSACT INS. WITHIN THE STATE
SPECULATIVE RISK
INVOLVES BOTH AN UNCERTAINTY OF LOSS AN OF GAIN. INSURANCE DOES NOT PROTECT INDIVIDUALS AGAINST LOSSES ARISING FROM THIS, BECAUSETHESE RISKS ARE UNDERTAKEN VOLUNTARILY
INSURANCE CONSULTANTS
NOT PAID BY COMMISSIONS FOR THE SALES OF INSURANCE POLICIES. THEY WORK STRICTLY FOR THE BENEFIT OF INSUREDS AND ARE PAID A FEE BY THE INSUREDS THEY REPRESENT.
ANNUITY
PROVIDES GUARANTEED INCOME FOR THE LIFE OF AN ANNUITANT.
PREMIUM
SET AMOUNT OF MONEY PAID TO THE INSURANCE CO.
INDEMNITY
STATES THAT INSURANCE SHOULD RESORE THE INSURED, IN WHOLE OR IN PART, TO THE CONDITION THE INSURED ENJOYED BEFORE THE LOSS.
AUTO, GENERAL LIABILITY, WORKERS COMPENSATION, CRIME, SURETY, BOILER AND MACHINERY
TYPES OF CASUALTY INSURANCE
LIFE AND HEALTH, PROPERTY AND CASUALTY, BROKERS, SOLICITORS, INSURANCE CONSULTANTS
TYPES OF PRODUCERS
INSURANCE
WAS DEVELOPED AS A MEANS FOR SPREADING FINANCIAL LOSS AMONG MANY PERSONS SO THAT THE COST TO ANY ONE PERSON IS RELATIVELY SMALL
FEDERAL
________________ JURISDICITON APPLIES TO INDIVIDUALS OR COMPANIES WHOSE ACTIVITIES AFFECT INTERSTATE COMMERCE, WHICH INCLUDES MOST IN. ACTIVITY. PRIMARILY USED AS A MEANS TO OVERSEE AREAS NOT COVERD BY STATE REGULATION OF THE INDUSTRY
SUBROGATION
___________________ CLAUSE IN AN INSURANCE POLICY GIVE THE INSURER THE RIGHT TO SUE THE RESPONSIBILE PARTY. NEVER USED IN LIFE INSURANCE
SOUTH EASTER UNDERWRITERS
____________________ ASSOCIATION SUPREMEM COURT DECISION OVERTURNED PAUL V. VIRGINIA AND STATED THAT THE INS. TRANSACTED ACROSS STATE LINES, WAS IN FACT, INTERSTATE COMMERCE
RISK RETENTION
_____________________________ GROUPS ARE COMPOSED OF MEMBERS WHO ARE ENGAGED IN SIMILAR BUSINESSES OR ACTIVITIES. THE PRIMARY ACTIVITY CONSISTS OF ASSUMING AND SPREADING ALL, OR A PORTION, OF THE LIABILITY EXPOSURE OF ITS MEMBERS. CAN ONLY PROVIDE LIABILITY INS. OR PERSONAL LINE INS.
10,000, 1
$_________________ OR UP TO _______ YEAR IN JAIL IS THE PENALTY FOR ANY PERSON WHO OBTAINS INFORMATION ABOUT A CLIENT WITHOUT HAVING A LEGITIMATE REASON TO RECEIVE IT.
FEDERAL, STATE, SELF
3 MAJOR CHANNELS OF REGULATION OF THE INSURANCE INDUSTRY
PRIVATE COMMERCIAL, PRIVATE NONCOMMERCIAL, US GOVERNMENT
3 MAJOR SOURES OF INSURANCE
INSURABLE INTEREST
A BASIC RULE GOVERNING INSUREANCE STATES THAT BEFORE AN INDIVIDUAL CAN BENEFIT FROM INSURANCE, THAT INDIVIDUAL MUST HAVE A LEGITIMATE INTEREST IN THE PRESERVATION OF THE LIFE OR PROPERTY INSURED.
LARGE NUMBERS OF HOMOGENEOUS UNITS
A LARGE NUMBER OF SIMILAR EXPOSURE UNITS IS NECESSARY IN ORDER FOR THE POOLING AND SHARING MECHANISMS OF INSURANCE TO FUNCTION
SOLICITORS
A SALESPERSON WHO WORKS FOR AN AGENT OR BROKER. IS MOST COMMON IN PROPERTY AND CASUALTY INS. FIELD
ATTORNEY IN FACT
ADMINISTRATION, UNDERWRITING, SALES PROMOTION, AND CLAIMS HANDLING FOR THE RECIPROCAL INSURANCE ARE HANDLED BY AN _________________________, WHO IS CONTROLLED AND OVERSEEN BYAN ADVISORY COMMITTEE OF SUBSCRIBERS
LIFE AND HEALTH
AGENTS THAT DO NOT HAVE AUTHORITY TO ISSUE OR MODIFY INSURANCE CONTRACTS. AUTHORIZED TO SOLICIT, RECEIVE, AND FORWARD APPLICATIONS FOR THE CONTRACTS WRITTEN BY THEIR COMPANIES. CANNOT BIND COVERAGE AND CANNOT COMMIT TO PROVIDING INSURANCE COVERAGE ON BEHALF OF THE INSURANCE CO.
FAIR CREDITING REPORTING
ALL INSURER AND THEIR PRODUCERS MUST COMPLY WITH THE FEDERAL ____________________________________ ACT REGARDING INFORMATION OBTAINED FROM A THIRD PARTY CONCERNIGN THE APPLICANT
HAZARD
ANY FACTOR THAT GIVES RISE TO A PERIL
TRANSFER OF RISK
BASIC PRINCIPLE OF ALL INSURANCE
STOCK INSURANCE
CONSISTS OF STOCKHOLDERS, AKA SHAREHOLDERS, WHO OWN SHARES IN THE COMPANY
CONSUMER RIGHTS
CONSUMERS WHO FEEL THAT INFORMATION IN THEIR FILES IS INACCURATE OR INCOMPLETE MAY DISPUTE THE INFORMATION, AND REPORTING AGENCIES MAY BE REQUIRED TO REINVESTIGATE AND CORRECT OR DELETE INFORMATION.
LIFE INSURANCE
COVERAGE ON HUMAN LIVES, INCLUDING ENDOWMENTS AND ANNUITIES, AND MAY INCLUDE BENEFITS IN THE EVENT OF ACCIDENTAL DEATH OR DIMEMBERMENT AND BENEFITS FOR DISABILITY
AVOIDANCE
DEALS WITH RISK BY AVOIDING THE RISK IN THE FIRST PLACE. NOT UNDERTAKING ACTIVITY THAT COULD INVOLVE THE CHANCE OF LOSS
CLAIM
DEMAND FOR PAYMENT OF THE INSURANCE BENEFIT TO THE PERSON NAMED IN THE POLICY
RETENTION
DOING NOTHING ABOUT THE RISK. PEOPLE ASSUME THE RISK AND IN EFFECT, BECOME SELF-INSURERS
SUBSCRIBER
EACH INDIVIDUAL WHO IS A MEMBER OF A RECIPROCAL
SUBROGATION
ENTITLES ONE WHO HAS PAID FOR ANOTHER'S LOSS TO TAKE OVER THE OTHER'S RIGHTS TO RECOURSE FROM THE PARTY RESPONSIBLE FOR THE LOSS.
MCCARREN-FERGUSON ACT (1945)
FEDERAL GOVERNMENT HAD THE RIGHT TO REGULATE THE BUSINESS OF INSURANCE, BUT ONLY TO THE EXTENT THAT SUCH BUSINESS IS NOT REGULATED BY STATE LAW.
POLICY DIVIDENDS
FUNDS NOT PAID OUT AFTER PAYING CLAIMS AND OTHER OPERATING COSTS ARE RETURNED TO THE POLICYOWNERS IN THIS FORM. (MUTUAL INSURERS)
MGA (GENERAL AGENTS OR MANAGING GENERAL AGENTS)
HIRE, TRAIN, AND SUPERVISE OTHER CAREER AGENTS WITHIN A SPECIFIC GEOGRAPHICAL AREA. THEY ARE COMPENSATED BY COMISSIONS EARNED ON BUSINESS SOLD BY THEMSELF OR AS WELL AS AN OVERRIDING COMMISSION ON THE BUSINESS PRODUCED BY THE OTHER BINDING AUTHORITY ONLY IN PROPERTY.
RECIPROCAL INSURANCE
IF ANY SUBSCRIBER SHOULD SUFFER A LOSS PROVIDED FOR BY THE ____________________, EACH SUBSCRIBER AMOUNT WOULD BE ASSESSED AND EQUAL AMOUNT TO PAY THE CLAIM
PERIL
IMMEDIATE SPECIFIC EVENT CAUSING LOSS AND GIVING RISE TO RISK. IT IS THE CAUSE OF THE RISK.
PRIVATE INSURANCE
IN THE BUSINESS TO MAKE A REASONABLE PROFIT AND ARE THEREFORE CALLED COMMERCIAL INSURERS. I.E. STOCK AND MUTUAL INSURERS.
VARIABLE LIFE AND ANNUITY PRODUCTS
INCLUDE INSURANCE COVERAGE PROVIDED UNDER VARIABLE LIFE INSURANCE CONTRACTS AND VARIABLE ANNUITIES
CONSUMER REPORTS
INCLUDE WRITTEN, ORAL, AND OTHER FORMS OF COMMUNICATION REGARDING A CONSUMER'S CREDIT, CHARACTER, REPUTATION, OR HABITS AND ARE USED OR COLLECTED TO DETERMINE WHETHER A CONSUMER IS ELIGIBLE FOR CREDIT, INSURANCE, EMPLOYMENT OR OTHER PURPOSES
INSURER
INSUARNCE CO.
LARGE NUMBERS OF HOMOGENEOUS UNITS, LOSS MUST BE MEASURABLE, LOSS MUST BE UNCERTAIN, ECONOMIC HARDSHIPS, EXCLUSION OF CATASTROPHIC PERILS
INSURABLE RISKS
LOSS MUST BE UNCERTAIN
INSURANCE COVERS PURE RISKS, WHICH MUST INVOLVE AN UNCERTAINTY OF LOSS.
SOCIAL DEVICE
INSURANCE IS A _____________________________________ FOR SPREADING THE CHANCE OF FINANCIAL LOSS AMONG A LARGE NUMBER OF PEOPLE
ACCIDENT AND HEALTH OR SICKNESS
INSURANCE PROTECTS THE INSURED AGAINST FINANCIAL LOSS CAUSED BY SICKNESS, BODILY INJURY, OR ACCIDENTAL DEATH AND MAY INCLUDE BENEFITS FOR DISABILITY INCOME
POLICYOWNER
INSURED
LOSS MUST BE MEASURABLE
INSURER MUST BE ABLE TO PLACE A SPECIFIC MONETARY VALUE ON EXPOSURES AND LOSSES IN ORDER TO BE ABLE TO CALCULATE RATES AND PREMIUMS AND REACH SEMTTLEMENTS
INSURANCE
IS A CONTRACT THAT IDEMNIFIES ANOTHER AGAINST LOSS, DAMAGE, OR LIABILITY FROM AN UNKOWN EVENT
REINSURANCE
IS AN ARRANGEMENT BY WHICH AN INSURANCE CO. TRANSFERS A PORTION OF A RISK IT HAS ASSUMED TO ANOTHER INSURER
LIMIT OF LIABILITY
IT MEANS THE MAXIMUM AMOUNT THE INSURERR WILL PAY FOR A SPECIFIED INSURED CONTINGENCY.
POLICY
LEGAL DOCUMENT REFERRED TO AS A CONTRACT OF INSURANCE.
CREDIT
LIMITED LINE OF INSURANCE PROTECTING THE INSURED, WHO IS USUALLY A CREDITOR, AGAINST THE FINANCIAL CONSEQUENCES SHOULD A DEBTOR BE UNABLE TO PAY DEBTS AS A RESULT OF ILLNESS OR DEATH
MCCARREN-FERGUSON ACT
MAIN INTENT WAS TO EXEMPT THE INSURANCE INDUSTRY FROM MOST OFF THE PROVISIONS OF THE FEDERAL ANTITRUST LAWS.
DIRECT RESPONSE
MARKETING IS CONDUCTED THROUGH THE MAIL, BY ADVERTISMENTS IN NEWSPAPERS AND MAGAZINES, AND ON TELEVISION AND RADIO
DIRECT RESPONSE, FRANCHISE, NONINSURANCE SPONSORS, VENDING MACHINE SALES
MASS MARKETING
FACE AMOUNT
MAXIMUM LIABILITY OF THE INSURER FOR A DEATH CLAIM
TRANSFER
MEANS MOVING THE RISK OF LOSS TO ANOTHER PARTY, USUALLY AN INSURANCE COMPANY, THAT IS MORE WILLING OR ABLE TO BEAR THE RISK.
SELF-INSURANCE
MEANS OF RETAINING A RISK. FREQUENTLY THESE INSURERS SET ASIDE RESERVE FUNDS TO COVER LOSSES AND PURCHASE EXCESS INS. TO COVER LARGE LOSS OR AGGREGATE LOSSES ABOVE A GIVEN LEVEL
INDEMNIFY
MEANS TO MAKE A PERSON WHOLE BY RESTORING THAT PERON TO THE SAME FINANCIAL POSITION THAT EXISTED BEFORE THE LOSS
ECONOMIC HARDSHIP
MUST BE A SIGNIFICANT POTENTIAL FOR ECONOMIC LOSS.
NOTICE TO APPLICANT
MUST BE ISSUED TO ALL APPLICANTS FOR LIFE OR HEALTH COVERAGE. IT INFORMS THE APPLICANT THAT A REPORT WILL ORDERED CONCERNING THEIR PAST CREDIT HISTORY AND ANY OTHER LIFE OR HEALTH INS. FOR WHICH THEY HAVE PREVIOUSLY APPLIED.
EXCESS AND SURPLUS LINES
NAME GIVEN TO THE INSURANCE FOR WHICH THERE IS NO MARKET THROUGH THE ORIGINAL PRODUCER OR THAT IS NOT AVAILABLE THROUGH AUTHORIZED CARRIERS IN THE STATE WHERE THE RISK ARISES OR IS LOCATED
MUTUAL INSURERS
NO STOCKHOLDERS; OWNERSHIP RESTS WITH THE POLICYHOLDERS.
STOCK INSURERS
NON-PARTICIPATING COMPANY BECAUSE POLICYHOLDERS DO NOT PARTICIPATE IN DIVIDENDS RESULTING FROM STOCK OWNERSHIP
EXCLUSIVE OR CAPTIVE AGENTS
ONLY REPRESENT ONE CO.; CAREER AGENTS WORKING FOR CAREER AGENCIES; COMPENSATED BY COMISSIONS
PURE
ONLY RISK THAT IS INSURABLE.
INSURED
PERSON WHO IS COVEREDBY THE INSURANCE
CASUALTY INSURANCE
PROTECT THE INSURED AGAINST THE FINANCIAL CONSEQUENCES OF LEGAL LIABILITY, INCLUDING THAT FOR DEATH, INJURY, DISABILITY, OR DAMAGE TO REAL OR PERSONAL PROPERTY.
PROPERTY INSURANCE
PROTECTS THE INSURED AGAINST THE FINANCIAL CONSEQUENCES OF THE DIRECT CONSEQUENTIAL LOSS OR DAMAGE TO PROPERTY OF EVERY KIND
LLOYD'S OF LONDON
PROVIDES A MEETING PLACE AND CLERICAL SERVICES TO ITS MEMBERS WHO ACTUALLY TRANSECT THE BUSINESS OF INSURANCE. NOT AN INSURANCE CO.
LOSS
REDUCTION IN THE VALUE OF AN ASSET
FACULTATIVE
REINSURANCE IS NEGOTIATED ON AN INDIVIDUAL RISK BASIS. REINSURER RETAINS THE RIGHT TO ACCEPT OR REJECT EACH RISK.
TREATY
REINSURANCE THAT INVOLVES AND AUTOMATIC SHARING OF RISKS BY THE CEDING CO.
LIFE AND HEALTH
REPRESENT THE INSURER TO THE BUYER WITH RESPECT TO THE SALE OF LIFE AND HEALTH INSURANCE PRODUCTS. APPOINTED BY THE INSURER, AND USUALLY THE AGENTS AUTHORITY TO PREPRESENTTHE INSURER IS SPECIFIED IN THE AGENCE AGREEMENT BETWEEN THEM, WHICH IS A WORKING AGREEMENT BETWEEN THE AGENTS AND THE INSURER
BROKERS
REPRESENTS THE BUYER TO THE INSURER AND MAY DO BUSINESS WITH SEVERAL DIFFERENT INSURERS. INDEPENDENT SALES REPRESETATIVES WHO SELECT INSURANCE COVERGE FROM THESE VARIOUS COMPANIES FOR THEIR CLIENTS.
INDEPENDENT AGENTS
SELL THE INS. PRODUCTS OF SEVERAL COMPANIES AND WORK FOR THEMSELVES OR OTHER AGENTS; OWNS THE EXPRATIONS OF THE POLICIES HE SELLS
DEDUCTIBLE
SIMPLY THE INITIAL AMOUNT OF A COVERED LOSS (OR LOSSES) THAT THE INSURED MUST ABSORB BEFORE THE INSURER BEGINS TO PAY FOR ADDITIONAL LOSS AMOUNTS
ELIMINATION PERIOD
SIMPLY THE NUMBER OF DAYS AN INSURED MUST BE DISABLED BEFORE DISABILITY INCOME BENEFITS BECOME PAYABLE
SHARING
SOMETIMES, WHEN A RISK CANNOT BE AVOIDED AND RETENTION WOULD INVOLVE TOO MUCH EXPOSURE TO LOSS, WE MAY CHOOSE RISK _______________ AS A MEANS OF HANDLING THE RISK.
REDUCTION
SOMETIMES, WHEN RISKS CANNOT BE AVOIDED THEY CAN BE MINIMIZED. IT CAN WORK IN ONE OF TWO WAYS; REDUCE THE CHANCE THAT A PARTICULAR LOSS WILL OCCUR, OR IT CAN REDUCE THE AMOUNT OF A POTENTIAL LOSS IF IT OCCURS
CEDING; REINSURER
THE COMPANY TRANSFERRING THE RIS IS CALLED THE _____________ CO.; THE CO. ASSUMING THE RISK IS THE _____________
PURE RISK
THERE IS ONLY A CHANCE OF LOSS. THE LOSS MAY OR MAY NOT HAPPEN-AND THERE IS NO POSSIBILITY FOR GAIN.
PROPERTY AND CASUALTY
THESE AGENTS MAY BIND OR COMMIT THEIR CO. BY ORAL OR WRITTEN AGREEMENT. SOMETIMES INSPECT RISKS FOR THE INS. CO. AND COLLECT PREMIUMS DUE.
ANNUITY
THEY ARE DESIGNED TO PROTECT AGAINST THE RISK OF LIVING TOO LONG-THAT IS OUTLIVING ONE'S FINANCIAL RESOURCES DURING RETIREMENT
RISK
UNCERTAINTY OF FINANCIAL LOSS
RECIPROCAL INSURERS
UNINCORPORATED GROUPS OF PEOPLE THAT PROVIDE INSURANCE FOR ONE ANOTHER THROUGH INDIVIDUAL INDEMNITY AGREEMENTS.
DIRECT-WRITING COMPANIES
USUALLY PAY SALARIES TO EMPLOYEES WHOSE JOB FUNCTION IS TO SELL THE COMPANY'S INSURANCE PRODUCTS
FAIR CREDIT REPORTING
VIOLATORS OF THE THIS ACT CARRY A MAXIMUM PENALTY FOR OBTAINING CONSUMER INFORMATION UNDER FALSE PRETENSES IS $5,000, IMPRISONMENT FOR YEAR, OR BOTH
MUTUAL INSURERS
VOTE FOR A BOARD OF DIRECTORS THAT IN TURN ELECTS OR APPOINTS THE OFFICERS TO OPERATE THE COMPANY.
EXPOSURE
________________ UNIT IN LIFE AND HEALTH INSURANCE IS THE ECONOMIC VALUE OF THE INDIVIDUAL PERSON'S LIFE
AUTHORIZED INSURER (ADMITTED)
INSURER THAT IS ENTITLED TO TRANSACT INSURANCE WITHIN THE STATE, HAVING COMPILED WITH THE LAW AND SATISFYING ALL CONDITION OF TRANSACTING INSURANCE
PAUL V. VIRGINIA
ESTABLISHED THAT THE TRANSACTION OF INS. ACROSS STATE LINES WAS NOT INTERSTATE COMMERCE AND THEREFORE SHOULD BE REGULATED BY LOCAL LAW.