RMIN Chapter 5
captive insurer
insurance company established and owned by a parent firm in order to insure its loss exposures while reducing premium costs, providing easier access to a re-insurer, and perhaps easing tax burdens
direct writer
insurance company in which the sales person is an employee of the insurer, not an independent contractor, and which pays all selling expenses, including salary
mutual insurer
insurance corporation owned by the policyholders, who elect the board of directors. The board appoints managing executives, and the company may may a dividedt or give a rate reduction in advance to insureds
multiple distribution systems
insurance marketing method that refers to the use of several distribution systems by an insurer
holding company
a company that directly or indirectly controls an authored insurer
stock insurer
a corporation owned by stockholders
direct response system
a marketing method where insurance is sold without the services of an agent potential customers are solicited by advertising through media
captive agent
a term to describe agents who represent only one insurer or a group of insurers that are financially interrelated or under common ownership
demutualization
a term used to describe the conversions of a mutual insurer into a stock insurance
non-admitted insurer
an insurer not licensed to do business in the state
personal selling distribution systems
distribution system in which commissioned agents solicit and sell life insurance products to prospective insureds
savings bank life insurance
life insurance originally sold by mutual savings banks in Massachusetts, New York, and Connecticut
advance premium mutual
mutual insurance company owned by the policy holders that does not issue asses-sable policies by charges premiums expected to be sufficient to pay all claims expenses
assessment mutual
mutual insurance company that has the right to assess policyholders for losses and expenses
fraternal insurer
mutual insurance company that provides life ans health insurance to member of a religious faith, ethnic group, or social organization
mass merchandising
plan for insuring individual members of a group, such as employees of firms or members of labor unions under a single program of insurance at reduced premium
broker
someone who legally represents the insured, soliciting or accepting applications for insurance that are not in force until the company accepts the business
agent
someone who legally represents the insurer, has the authority to act on the insurer's behalf and can bind the insurer by expressed authority by implied authority, and by apparent authority
surplus lines broker
specialized insurance broker licensed to place business with a non-admitted insurer
personal-producing general agent
term used to describe an above average salesperson with a proven sales record who is hired primarily to sell life insurance under a contract that provides both direct and overriding commissions
Lloyd's of London
the world's leading insurance market that provides services and physical facilities for its members to write specialized lines of insurance
exclusive agency system
type of insurance marketing system under which the agent represents only one company or group of companies under common ownership
independent agency system
type of property and casualty insurance marketing system, sometimes called the American agency system in which the agent is an independent business person representing several insurers
multiple line exclusive agency system
under this marketing system agents who sell primarily property and casualty insurance also sell individual life and health insurance products
reciprocal exchange
unincorporated mutual insuring organization in which insurance is exchanged among members and which is managed by an attorney-in-fact