Texas Insurance license - definitions
Terms in this set (152)
are serious crimes that are punishable by imprisonment for an extended length of time or by death.
protect individuals' private rights and are designed to remedy a wrong through compensation or citation.
is the party who starts a lawsuit and who claims to have suffered damages.
is the party being sued.
is the body of law that has developed over time through the decisions of judges.
is the body of law developed from statutes rather than decisions of judges.
laws enacted by legislative bodies.
A contract of adhesion
is a legal document drawn up by one party. The other party agrees to the terms of the contract without making modifications.
is granted to administrative and regulatory bodies by Congress or the state legislature so those bodies can draft detailed regulations.
are exercised by administrative law judges when they decide individual claims under the laws that they are entrusted to enforce and interpret.
Admission to the bar
A lawyer is granted this when he or she has completed educational requirements and passed a comprehensive examination (the bar exam) on legal issues and professional responsibility and conduct.
dictates that lawyers cannot disclose communication between themselves and clients to anyone without the clients' permission.
The "American Rule"
provides that each party to a lawsuit pays its own lawyer's fees.
The "English Rule"
provides that a losing party in a lawsuit must pay some or all of a winning party's lawyer's fees
The rules of civil procedure
govern the litigation process and the form and substance of all documents that must be filed with the court.
Statutes of Limitations
are laws that impose time limits on parties who want to bring civil lawsuits.
To toll means that the time period specified in a statute of limitations has run out.
The word "forum"
meant a court.
is the local area where a case can be tried. A court might have broad jurisdiction, but the proper venue is the one most convenient for the parties
is choosing a court, among several that have jurisdiction that will be most favorable.
are formal written statements of the facts and claims of each side in a lawsuit.
lists what the defendant has done to harm the plaintiff and the amount of money the plaintiff wants to recover.
is a legal document issued by the clerk of the court requiring the sheriff or other officer to the person named that an action has commenced against him or her and that he or she must answer the complaint.
provides the defendant's initial response and defenses to the complaint.
Service of process
is the formal delivery of legal documents.
A default judgment
is a final court decision automatically deciding in favor of one party.
is a complaint brought by the defendant against the plaintiff.
is the exchange of all relevant information between the plaintiff and defendant before the trial.
is the recorded and transcribed testimony of a witness obtained through oral questions or written interrogatories that is used in preparation for a lawsuit.
are specific written questions or requests that the opposing party must answer in writing.
are factual statements that, unless denied, bind the party at trial.
A summary judgment
is a final judgment for one side made before trial when the judge finds that no factual issue exists in the case. That decision is based on pleadings and discovery.
is information presented at trial by way of witnesses, records, documents, exhibits, or other concrete objects to persuade the court or jury to believe the arguments of the opposing parties.
is testimony offered by persons to prove the truth of a matter.
Testimonial Demonstrative evidence
is evidence that can be seen or felt.
evidence includes all forms of written documents.
Testimonial Direct evidence
proves a specific fact.
Testimonial Circumstantial evidence
is a fact used to prove another fact through inference.
Testimonial Relevant evidence
proves that something is more or less likely to be true.
indicates a relationship to the matter at issue.
relates to the type of evidence and the determination that the source of the evidence is adequate to justify its admission at trial.
The chain of custody
is the movement and location of evidence from the time it is gathered to the time it is in court.
means that evidence must have significance and consequence in the case.
is that part of a person's testimony about what he or she has heard others say but about which he or she has no personal knowledge. The testimony relates to something that was seen or heard as presented by someone else.
are formal requests for a court to take a particular action.
A motion to dismiss
is a request that a court terminate an action because of settlement, voluntary withdrawal, or a procedural defect.
motion in limine
is a pretrial request to the court by one party to the lawsuit that certain evidence be excluded from the trial.
A pretrial conference
is a meeting of the judge and the parties' lawyers in the judge's chamber two or three weeks before the trial to narrow the issues to be tried, to stipulate the issues and evidence to be presented at trial, and to help in settling the case.
is a formal judicial examination of evidence and determination of legal claims in a court of jurisdiction.
A bench trial
is a trial that a judge hears without a jury.
is the process of examining potential jurors concerning their qualification and suitability to serve on a jury.
are lawyers' requests to a judge to exclude prospective jurors from a jury. No reason must be stated.
The burden of proof
is a party's duty to prove that the facts he or she claims are true.
Preponderance of the evidence
means that the evidence has greater weight or that it is more credible and convincing than the evidence a defendant offers against it.
An opening statement
is the lawyer's outline or summary of the case and of the proof that will be presented to give the jury an overview of the case.
describes the evidence given by witnesses who are called to answer questions by a particular party, such as the plaintiff's or defendant's lawyers.
allows opposing lawyers to test the truth of a witness's testimony, to further develop the testimony, or to question a witness for other purposes.
have no special expertise in the matters about which they testify but have firsthand knowledge of the matters based on observation.
An expert witness
has specialized knowledge in a particular field beyond that of an ordinary person.
A directed verdict
is granted by the judge when the evidence is so clear and convincing that no reasonable trier of fact could find for the plaintiff based on the plaintiff's case.
are the lawyers' final statements made to summarize the evidence they think favors their client.
Payment for Losses
- By indemnifying insureds who have suffered losses, insurance enables them to continue working, buying products, and paying taxes.
Peace of Mind
- The risk of loss produces fear and uncertainty. Thus, insurance reduces anxiety and provides peace of mind for insureds and their families.
Support for Credit
- Before lending money for a large purchase such as a house, a bank or other lender wants assurance that the money will be repaid. Insurance would pay for the destroyed home and thus makes loans possible by reducing the lender's uncertainty that the borrower will be able to repay the loan.
Funds for Loans and Investments
- Insurers can use the premiums that they receive from their insureds to make loans and investments until that money is needed to pay for losses or operating expenses. Additionally, loans and investments help generate other business activity, creating new jobs and resulting in new consumer products.
- Insurers recommend loss control and severity of losses.
Efficient Use of Resources
Without insurance, individuals and businesses would have to set aside contingency funds to pay for property damage, bodily injuries, and lawsuits. Money and other resources would be tied up that could otherwise be used to produce and deliver goods and services. Some organizations choose not to purchase insurance. Instead, they pay for all losses with their own funds. That arrangement is known as self-insurance or retention.
Reduction of Social Burdens
- Insurance helps to reduce that burden by compensating for lost wages and medical expenses and by paying for damaged or destroyed property.
Satisfaction of Legal and Business Requirements
- Legal requirements often necessitate purchasing insurance. Some business relationships require proof of insurance.
Source of Employment and Tax Revenue
- The insurance business in the United States employs more than 2.2 million people. In addition to the obvious benefits for those employees, governments benefit because those employees pay local, state, and federal income taxes.
- Insurance benefits are not provided free. Insurers charge premiums to cover their administrative costs, to have funds to pay claims, and to try to earn a profit. The additional cost created by insurance is the portion of premium that is used to pay insurers' expenses.
also has indirect costs, such as opportunity costs, increased litigation, and moral hazards.
- represent an indirect cost of insurance: the costs of opportunities lost when money is used to pay premiums.
- Liability insurance sometimes pays large sums of money to protect insureds who might be responsible for injury to someone else or damage to someone else's property.
- is a condition that exists when an insured might intentionally cause a loss, exaggerate a loss that has occurred, or cause a loss because of carelessness.
are losses suffered by policyholders to their own property or persons.
represents the insured to negotiate a settlement with the insurer in exchange for a fee or a percentage of the settlement.
are claims made against an insured by others for damages allegedly caused by the insured.
is a legal term meaning money that the law requires a responsible party to pay to another party because of loss or injury suffered by the latter party.
Independent medical examinations (IMEs)
include a brief review of the patient's history and treatment to date and a physical examination of the patient. The IME helps the physician make a medical determination as to causation, current physical impairment, and the need for present or future treatment.
Utilization reviews (URs)
are any technique that evaluates the necessity, frequency, and cost of medical treatment.
is a wrongful act or omission, other than a breach of contract that violates a person's private rights. A person who commits a tort is called a tortfeasor.
Negligence is the failure
to use the proper care required by law to protect others from harm.
The reasonably prudent person standard
determines the amount of care that a person must use in any given situation by determining what a reasonably cautious person would or would not do under similar circumstances.
Vicarious liability (or imputed liability)
arises when a person is legally liable for an injured party's loss even though he or she was not directly negligent.
is a common law principle stating that if an injured party's own negligence contributes to a loss, the injured party cannot collect any damages at all from other responsible parties.
is a modification of contributory negligence. Under comparative negligence, if the party's own negligence contributed to the loss, the damages he or she may recover are reduced in proportion to his or her negligence.
Strict liability (or absolute liability)
arises when a person or an organization is liable for injury to others or damage to property without regard to fault.
are harmful acts done on purpose.
arises when someone is harmed when another party to a contract breaches the terms of the contract.
Capital stock insurance companies
are the leading type of insurer in the U.S. They control almost 70% of all property and liability insurance premiums and about 50% of life insurance premiums. Stockholders own these companies and share profits and losses.
have no stockholders - policyholders own the companies, have voting rights, and share profits which are distributed in the form of policy dividends. In the U.S., mutual companies control about 30% of the property and liability insurance business and 50% of the life insurance business.
County Mutual Insurance Companies
are companies organized for the purpose of insurance on the mutual or cooperative plan against loss or damage by fire, lightning, gas explosion, theft, windstorm and hail, and for all or either of such purposes.
A reciprocal insurer
is an unincorporated aggregation of persons, operating individually and collectively through an "attorney-in-fact" to provide reciprocal insurance among themselves. The individual persons are known as "subscribers." The insurance is provided through an interexchange of indemnity agreements, which are put into effect through the attorney-in-fact. In most states, the attorney-in-fact may be an individual, a firm, or a corporation. Reciprocal exchanges may participate in any form of insurance recognized by the code except life insurance.
Risk retention groups
Under Texas law, risk retention group means any corporation or other limited liability association whose primary activity consists of assuming and spreading all or any portion of the liability exposure of its group members, and which is chartered and licensed as a liability insurance company and authorized to engage in the business of insurance under the laws of any state. The members of the group must be engaged in similar or related businesses or activities, and the group is not permitted to provide insurance other than liability insurance for its members. The name of the group must include the phrase "Risk Retention Group."
is a means of retaining risk. For a risk to be truly self-insured, two important characteristics will be present: (1) a large number of homogenous exposure units, so that the law of large numbers can be used to predict expected losses, and (2) sufficient liquid assets to pay claims and other costs of retaining risk. The advantages of self-insurance are that money can be saved if losses are less than those predicted, expenses may be reduced by the elimination of such things as administrative costs and commissions, and the self-insurer has use of the money that would normally be held by the insurance company. The main disadvantages of self-insurance are that actual losses may be more than predicted, and expenses could be higher than expected if additional personnel have to be hired to administer the program.
Lloyd's of London
is not an insurance company, but may be compared to a stock exchange. Just as an exchange provides facilities for its members but does not buy or sell securities itself, Lloyd's provides a meeting place and clerical services to its members who actually transact the business of insurance.
Members are grouped into syndicates, but they remain individually liable and responsible for the contracts of insurance they enter into. Their individual fortunes and resources are pledged as the capital behind their assumption of risk. A syndicate is represented in a Lloyd's organization by an underwriter. Lloyd's of London assures full and adequate performance by its members through a governing committee and rules of eligibility.
Under Texas law, a purchasing group is any group which has as one of its purposes the purchase of liability insurance on a group basis for members who have similar or related liability exposures arising out of related, similar, or common business, trade, products, services, premises or operations.
Difference between a purchasing group and a risk retention group
The significant difference between a purchasing group and a risk retention group is that a purchasing group is merely a buyer of insurance and is not required to be licensed and authorized as an insurer, while a risk retention group is a provider of insurance which must be licensed and authorized
Surplus Lines Insurers
If insurance coverage on risks located or performed in Texas is unavailable from authorized insurers, an insured may be permitted to obtain such coverage from an unauthorized insurer. This coverage is known as surplus lines insurance and it may only be obtained from eligible surplus lines insurers. However, an agent licensed by Texas may not issue or cause to be issued an insurance contract with an eligible surplus lines insurer unless the agent is licensed by Texas as a surplus lines agent.
In Texas, a "surplus lines agent" is an agent authorized as:
· a General Lines:
Property & Casualty agent who is granted a surplus lines agent's license
· an MGA
who is granted a surplus lines agent's license; or
· a nonresident agent
who is granted a surplus lines agent's license for the limited purpose of acting on behalf of a purchasing group operating in Texas in placing liability insurance for risks located in Texas.
—An individual licensed under Insurance Code Article 21.07-4.
All lines adjuster's license
- An adjuster's license issued by the department to persons who have shown knowledge in the areas of property/casualty and worker's compensation by successfully completing the licensing program. This license allows the person to adjust all lines of insurance.
—Demonstration of the ability to use learned materials in a new situation, usually involving the application of rules, policies, methods, computations, laws, theories, or any other relevant and available information.
Associate in Claims (AIC) designation
- A designation granted by the American Institute for the successful completion of a series of advanced courses covering the area of insurance claims.
Certified adjuster pre-licensing education course
- A 40-hour pre-licensing course designed to provide the licensee with adequate knowledge and skills as demonstrated to the department by passing a comprehensive proctored examination.
- Insurance related courses approved by the Texas Department of Insurance for use in meeting the adjuster's and agent's license continuing education requirements.
Certificate of Completion
- A document that is provided to a licensee by the provider showing that the licensee has successfully completed an approved continuing education course of study.
—May include lectures, seminars, audio, video, computer-based instruction, and teleconferences that meet specific department requirements.
Classroom equivalent courses
—May be internet, CD-ROM, DVD, or other computer-based presentations that meet specific department requirements.
- The top executive of the Texas Department of Insurance, who is appointed by the Texas Governor and approved by the Texas Senate.
—The licensee has held a department-issued license for the entire period of 20 years without any lapse in excess of 90 days in which the licensee was not licensed or failed to renew a license.
—A designation granted by the American Institute for the successful completion of a series of advanced courses covering the areas of property and casualty insurance.
- See "Texas Department of Insurance".
Disinterested third party
—An individual who is:A. not related to a student by blood, adoption, or marriage such as a parent, child, grandparent, sibling, niece, nephew, aunt, uncle, or first cousin; B. not an employee or subordinate of the student.
—A course that deals with usage and customs among members of the insurance profession, involving their moral and professional duties toward one another, toward clients, toward insureds, and toward insurers.
—A course primarily focused on teaching subjects related to the business of insurance.
—Recall of specific facts, patterns, methods, rules, dates, or other information that must be committed to memory.
—An adjuster or individual holding a license under the authority of Insurance Code Articles 21.07-1 §§2, 4 or 6 (general lines - life, accident, and health agent, limited lines agent, or life insurance not exceeding $15,000 agent); 21.07-2 (life and health insurance counselor); 21.07-3 (managing general agent); or 21.14 §§2, 6, 8, or 9 (general lines - property and casualty agent, limited lines agent, insurance service representative or county mutual agent).
Property/Casualty adjuster's license
- An adjuster's license issue by the department to persons who have shown knowledge in the area of property/casualty by successfully completing a licensing program. This license allows the person to adjust all types of property and casualty insurance.
—An individual or organization including a corporation, partnership, depository institution, insurance company, or entity chartered by the Farm Credit Administration as defined in Insurance Code Article 21.07 §2(v), registered with the department to offer continuing education courses for licensees and/or pre-licensing instruction for adjusters.
—Insurance courses for which a licensee may receive continuing education credit and are: A. offered for credit by accredited colleges, universities, or law schools;B. part of a national designation certification program;C. approved for classroom, classroom equivalent, or participatory credit by the continuing education approval authority of a state bar association or state board of public accountancy; or ID. certified or approved for continuing education credit under the guidelines of the Federal Crop Insurance Corporation.
—The period from the issue date or last renewal date of the license to the expiration date of the license, generally a two-year period.
—May include textbook, audio, video, computer-based instruction, or any combination of these in an independent study setting.
TDI license number
—An identification number the department assigns to the licensee and found on the license certificate.
Texas Department of Insurance
—The State of Texas' insurance regulatory agency.
Worker's Compensation adjuster's license
—An adjuster's license issued by the department to persons who have shown knowledge in the area of worker's compensation by successfully completing a licensing program. This insurance license allows the person to adjust workers compensation insurance.
are criminal offenses that are punishable by a fine or imprisonment in an institution other than a penitentiary (such as a jail).
means a land motor vehicle, trailer or semi-trailer designed for travel on public roads but does not include mobile equipment.
means any of the following types of land vehicles, including any attached machinery or equipment:
includes continuous or repeated exposure to the same conditions resulting in bodily injury or property damage.
means a land motor vehicle, trailer or semi-trailer designed for travel on public roads but does not include mobile equipment.
means bodily injury, sickness or disease sustained by a person including death resulting from any of these.
means direct and accidental loss or damage
Property damage (PD)
means damage to or loss of use of tangible property.
means a civil proceeding in which damages because of bodily injury or property damages to which this insurance applies are alleged. Suit includes an arbitration proceeding alleging such damages to which the insured must submit or submit with the insurer's consent.
means a person related to the insured by blood, marriage or adoption who is a resident of the insured's household, including a ward or foster child.
means in, upon, getting in, on, out or off
PERSONAL INJURY PROTECTION
(ENDORSEMENT TE 04 01 C)
Personal Injury Protection benefits consist of:
1. Necessary expenses for medical and funeral services.
2. Eighty percent of an insured's loss of income from employment. These benefits apply only if, at the time of the accident, the insured
a) was an income producer; and
b) was in an occupational status.
These benefits do not apply to any loss after the insured dies.
a) owned or leased by the insured or
b) while temporarily used as a substitute for an owned covered auto that has been withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction.
means an individual named in the schedule. By such designation, that person has the same coverage as the insured.
means injury to or loss of use of or destruction of;
a) covered auto, or
b) property owned by the insured, a designated person, or family member of either while contained in a covered auto; or
c) property owned by any other person occupying the covered auto while contained in the covered auto; and
d) any property owned by the insured, a designated person or family member of either while contained in any auto not owned, but being operated by the insured, a designated person or family member of either.
Business Auto Policy
Used to provide coverage for any automobile exposure which is not eligible for a Personal Auto Policy (PAP).
Covers autos exposures eligible for a PAP when they are combined with a commercial risk or when a vehicle is used in business.