Topic 2
About this set
Created by:
blackiechan55 on January 30, 2012
Subjects:
Log in to favorite or report as inappropriate.
Order by
35 terms
Terms | Definitions |
|---|---|
 self contained policy | single, stand alone document that is appropriate for insuring similar loss exposures like personal auto or life insurance |
| modular policy | mix and match set of components, designed around one basic policy component, aka policy jacket or common conditions form |
| modular policy | can create a monoline policy, can also create a package policy |
| preprinted policy | ready made off the shelf policy, usually only hold onto dec page, policy holder still retains complete policy |
| standard insurance form | preprinted form, developed by an ISO or advisory organization |
| non-standard form | preprinted, developed in house or modification of a form developed by an ISO |
| manuscript policy | custom contract, highly specialized for specific risks, generally a one of a kind policy |
| endorsements | used to modify a more basic policy, takes precedence over any conflicting terms in the policy attached, handwritten supersede printed ones |
| definitions | provide meanings for technical words, like deductible or coinsurance |
| definitions | explain legal terms |
| insuring agreement | spells out what occurs in the contract, insurer pays for losses that occur, insured pay premium |
| exclusions | clarifies what the insurer covers and specifies what is not covered |
| exclusions | eliminate coverage for uninsurable losses, manage moral[e] hazard, reduce duplicate coverage, eliminate coverage that typical insured would have no need, keep premiums reasonable |
| manage moral hazard | exclusions of intentional acts and covering only certain items if you take certain care, to penalize carelessness |
| Before loss analysis | what're you conducting when its difficult to understand exposures to which policy applies and when its hard to interpret what a policy actually pays? |
| after loss analysis | During what do you to see if the full premium is paid, fraud has occurred, or if there was misrepresentation? |
| valid contract | you have this if your premium is fully paid, fraud doesn't exist and you aren't misrepresenting anything |
| after loss analysis | during what do you ask if an insurable interest exist? in property and casualty, must exist at time of loss |
| after loss analysis | during what do you ask if any conditions effect coverage |
| stock insurance companies | Most common insurance companies in U.S., proprietary insurer (earn a profit), owned by stockholders |
| Lloyd's of London | Proprietary insurer, marketplace like a stock exchange, owner often referred to as an underwriter or "name" backed by individual member's fortune |
| Mutual Insurance Companies | Cooperative Insurance companies, owned by policy holders and formed to provide low cost policies to policy holders, excess profit after claims and reserves are returned as dividends |
| Captives | Wholly owned subsidiary of parent company |
| Measurement ratios | Loss Ratio, combined ratio and expense ratio are considered |
| Loss Ratio | (Incurred losses)/(earned premiums). Evaluates underwriting performance of user |
| Expense Ratio | (Underwriting and admin expense)/(written premiums) |
| Combined Ratio | Sum of loss ratio and expense ratio |
| Combined Ratio | Less than 100% indicates profit on insurance operation, can evaluate underwriter, agent/broker, product line, geographic area |
| Combined Ratio | Can be basis for contingent commission/profit sharing |
| Rating Agencies | What are AM Best, moody's and S&P? |
| Alien Company | If the insurer is founded outside the U.S. |
| Foreign Company | If the insurer is founded outside the State it's doing business in |
| Domestic Company | Insurer incorporated in the state in which it is selling coverage (most regulatory power) |
| Admitted Insurer | Licensed to do business in a given state |
| Non-admitted insurer | not licensed to do business in that state, can only sell excess and surplus |
First Time Here?
Welcome to Quizlet, a fun, free place to study. Try these flashcards, find others to study, or make your own.