General Insurance - AR Life Insurance

A Currency Transaction Report (CTR) must be filed with FINCEN (Financial Crimes Enforcement Network) through the Department of Treasury for every cash transaction that exceeds $______ and wire transfers in excess of $_______.

10,000 3000

The applicant is entitled to be informed of anyone who requested a copy of the credit report in the prior _ months.

6

In mutual insurance companies, ________ is elected by the policyholders to manage the company, but officers elected by the Board handle the day-to-day operations.

A Board of Directors

Conditional Contract

A type of an agreement in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable.

Stock Insurance Company

A type of insurance company owned by stockholders.

Contract of Adhesion

Any contract in which one party must either accept the agreement as written by the other party or reject it.

An admitted or authorized insurer is approved to transact insurance in a given state if it has been granted a ________ from that state's Department of Insurance.

Certificate of Authority

protects consumer privacy by ensuring that data collected by companies on a person is confidential, accurate, relevant, and used for a proper purpose

Fair credit reporting act

protects the consumer's right to the privacy of credit and financial information, ensuring that all collected data is confidential, accurate, relevant and properly used. Under the FCRA, credit reports may be obtained only to determine the financial and moral status of an applicant, such as for employment screening or loan approval, or to assist in underwriting by an insurer.

Fair credit reporting act (FCRA)

Lack of insurable interest makes the purchase of insurance or payment of a claim ______, since benefiting from the policy without suffering a financial or economic loss would allow for a person to profit from the loss.

Illegal

Typically, a person (the applicant or insured) makes an ____ by submitting an application to the insurance company for insurance along with the initial premium. In this case, ____ takes the form of the approved application allowing the policy to be issued. The premium and the issued policy together form the agreement.

Offer Acceptance

The insured's consideration is the ______, along with an agreement to abide by the conditions of the contract. The insurer's _______ in the event of a loss is its consideration, as is specified in the insuring clause of the policy.

Payment of premium promise to indemnify

A mutual insurer is owned by _______, who may be referred to as _______.

Policyholders Members

indemnify

To compensate for a loss, or to make whole again

The PATRIOT Act was passed to help detect and prevent this illegal activity. As part of the Act, financial institutions and insurance companies are required to provide ____ training to their producers, since insurance products are now being used to give legitimate appearance to money financed by and for illegal activities.

anti-money laundering (AML)

Insurance Agencies

are independent sales organizations that provide service and distribute insurance policies to consumers

Aleatory Contract

based on an uncertain event, or "by chance". Very likely there will be an unequal exchange of consideration

Fraternal insurers are known as Fraternal Benefit Societies. They are primarily social organizations that engage in ________ and ________ charitablethat provide primarily life insurance to its members.

charitable Benevolent activities

The insurance industry is regulated primarily at the state level through the

legislative, judicial, and executive branches. The legislative branch writes and passes state insurance laws, or statutes, designed to protect the insuring public. The judicial branch is responsible for interpreting and determining the constitutionality of the statutes. The role of a state's executive branch is to enforce the existing statutes that have been put in place.

Traditionally, stock insurers issue ________, since the policyholders are not entitled to dividends.

non-participating policies

When and if declared by the Board, policyholders may receive ______ as a return of unused premium. These are not guaranteed and are considered a return of premium based on any surplus at the end of the year once all claims and operating expenses have been paid.

non-taxable dividends

In the case of life and health insurance, contract law requires that insurable interest must exist at the time of

of the application, not the time of the loss.

In a stock insurance company, stockholders elect a Board of Directors to manage the company, but the Board then elects

officers to handle the day-to-day activities. Stockholders share in the company's profits and may receive corporate dividends taxable as ordinary income IF declared by the Directors. These dividends are not guaranteed.

Unilateral Contract

only one party is legally bound to the contractual obligations. As long as all the conditions are met by the insured, the insurer makes an enforceable promise of future performance and can be charged with a breach of contract if those obligations are not met

Mutual insurers typically issue

participating policies

The insurer must give _________ to the insurance applicant (consumer) that a credit report may be requested as part of the insurer's underwriting requirements, and must have pre-authorization by obtaining the applicant's ______ to request the report at the time of _______.

pre-notification written consent Application

Insurers (Insurance Companies or Carriers)

provide insurance coverage by issuing particular insurance policies or contracts

National Association of Insurance Commissioners (NAIC)

the regulatory support organization created and governed by the chief insurance regulators and commissioners from the 50 states, D.C., and five U.S. territories. The NAIC provides resources, research, legislative and regulatory recommendations and interpretations for state insurance regulators. Members may accept or reject recommendations. The NAIC has no legal authority to enact or enforce insurance laws. The primary goal of the association is to promote state uniformity.

Principle of Indemnity, insurance is designed to restore an insured to

the same physical or financial condition which existed prior to the loss, without a profit or gain.