LIMITED LINES TEST
Agent
An individual authorized by an insurer to solicit app or to negotiate insurance on its behalf.
Mutual Companies
Are owned by policy holders
Deductibles
Are used to prevent covered small claims, it helps by reducing the premium
Admitted Insurer
Authorized to sell insurance. Granted a certificate of authority from the dept of insurance
Temporary Licenses
Commissioner May issue this license without examination. May be obtained before a person passes the state exam if the person completes a 40-hour course before applying for the license or within 14 days after applying for the license. Good for no more than 90 days.
Pro Rate
Deals with returned premiums
Avoidance
Eliminate the exposure-underwriting rejects a policy
Non resident Agent
If properly licensed in their home state, may work in any other state with that license (if allowed) or must pay the proper fees, file proper forms, and furnish a letter of good standing from their home state.
ISR
Insurance Service Representative
Certificate of Authority
Insurance companies meeting requirements of Texas law are granted this certificate, and then are referred to as an admitted or authorized carrier.
Retention
Insured assumes all or part of the risk - DEDUCTIBLE
The Commissioner Of Insurance
Is appointed by the governor for a 2 year tern subject to the advice and consent of senate
Underwriting Dept
Is the Dept. in an insurance company that elevates proposed risks that the insurance company intent to insure. They 'rate' or determine the price of the insurance for each category/ class of risk
Salvage
Is totaled out property deemed NOT repairable by the insurance company
False Information and Advertising
Is using advertising, announcements, or statements which are untrue deceptive, or misleading
Tort
Law is civil wrong other than a branch of contract
LRA
Local Recording Agent Can solicit; bind coverage, sign policies, and direct solicitors and ISRs.
Defamation
Making any oral or written statement with is false
Independence
Many people must be exposed to the same or similar risk in order for the 'law of large numbers' to work. Ex:People who live in a "rural" area. Less populated.
Independence
Many people must be exposed to the same or similar risk in order for the 'law of large numbers' to work. People who live in a less- populated area (rural) are not as likely - as group- to have an auto accident a someone who lives in a large city.
Conditional Licenses
May be issued without having to wait for the results of a criminal history search ( fingerprint check ) If something comes up app will be revoked and shall refuse to issue permanent license.
Rebates
Offering to pay rebates of premium or any special favor valuable consideration as an inducement to purchase insurance
Actual Cash Value
Replacement cost - depreciation
Solicitor
Represents LRA
Indemnity
Restore and insure to the same financial condition they were in prior to the loss.
Indirect loss
The consequence of the direct loss. Ex: staying in a hotel after your house burned down.
Pure Risk
This deals with only the possibility of reduction in the value of something Ex: To Indemnify is to take a person who has sustained a loss and to put them back "financially" where they were before they suffered the loss .
Commissioner Duties and Powers
To administer , enforce, and carry out the provisions of the insurance code and laws
Transfer
Transfer risk from yourself to an insurance company - INSURANCE
Non admitted insurer
UNAUTHORIZED to sell insurance. DO NOT qualify for a certificate of authority, Often called Surplus lines insurance companies.
Arbitration
Used to realize claim disputes.
False Information and Advertising
Using advertisements, announcements, or statements which are untrue, deceptive, or misleading
Agreed Value
Values agreed on between the insured and the insurer at the same time the policy is issued
Sharing
When risk is pooled together and chance of loss is shared- PARTNERSHIP
Reduction
When the possibility or seriousness of the risk is reduced - ALARM
Misrepresentation
a false statement made by the insured
Representation
a written or oral statement made by the insured
Alien Insurer
companies organized under laws of another county ( MEXICO )
Foreign Insurer
companies organized under laws of another state ( FLORIDA )
Domestic Insurer
companies organized under the laws of a particular state ( TEXAS )
Fraud
intentional perversion of the truth
Accidental
losses must be a random event which the insured has no control over
Boycotting, Coercion, and Intimidation
monopoly in the business of insurance
Insuring Agreement
promise to pay covered perils
Conditions
rules of conduct duties and obligations of both the insurer and the insured
endorsements
the only ways to add delete or modify coverage
Exclusions
things are not covered on the policy
Subrogation
"Right of recovery " When an insured is involved Ina n accident, and another part is at fault, and the at fault party I le taking too long to pay the claim, the insureds company can subrogate
How many hours of completion does a licensee have to have to renew his or her license
10
Peril
A cause of loss. Ex: fire, theft, flood..
Proof of Loss
A document that must be submitted to an insurance company after with in 91 days
Market Value
A willing buyer and willing seller that agree on an amount in a piece of property, this is not a good insurance price
