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Health Insurance FLA
state exam
| Term | Definition |
|---|---|
| business health insurance | Issued primarily to indemnify a business for the loss of services of a key employee, partner or active close corporation stockholder. |
| adhesion | A life insurance policy is this because buyers must "adhere" to the terms of the contract already in existence. They have no opportunity to negotiate terms, rates, values, and so on. |
| administrative-services-only (ASO) plan | Arrangement under which an insurance company or an independent organization, for a fee, handles the administration of claims, benefits and other administrative functions for a self-insured group. |
| Advertising Code | Rules established by the National Association of Insurance Commissioners (NAIC) to regulate insurance advertising. |
| apparent authority | The authority an agent appears to have, based on the principal's (the insurer's) actions, words, deeds or because of circumstances the principal (the insurer) created. |
| assessment mutual insurer | An insurance company characterized by member-insureds who are assessed an individual portion of each loss that occurs. No premium payment is payable in advance. |
| basic medical expense policy | Health insurance policy that provides "first dollar" benefits for specified (and limited) health care, such as hospitalization, surgery or physician services. Characterized by limited benefit periods and relatively low coverage limits. |
| blanket policy | Covers a number of individuals who are exposed to the same hazards, such as members of an athletic team, company officials who are passengers in the same company plane, and so on. |
| business continuation plan | Arrangements between the business owners that provide that the shares owned by any one of them who dies or becomes disabled shall be sold to and purchased by the other co-owners or by the business. |
| cancellable contract | Health insurance contract that may be terminated by the company or that is renewable at its option. |
| career agency system | A method of marketing, selling and distributing insurance, it is represented by agencies or branch offices committed to the ongoing recruitment and development of career agents |
| COBRA | extending group health coverage to terminated employees and their families for up to 18 or 36 months |
| commercial health insurers | Insurance companies that function on the reimbursement approach, which allows policyowners to seek medical treatment then submit the charges to the insurer for reimbursement. |
| conditionally renewable contract | Health insurance policy providing that the insured may renew the contract from period to period, or continue it to a stated date or an advanced age, subject to the right of the insurer to decline renewal only under conditions defined in the contract. |
| conditional receipt | Given to the policyowners when they pay a premium at time of application. Such receipts bind the insurance company if the risk is approved as applied for, subject to any other conditions stated on the receipt |
| contract of agency | A legal document containing the terms of the contract between the agent and company, signed by both parties. Also called agency agreement |
| delayed disability provision | A disability income policy provision that allows a certain amount of time after an accident for a disability to result, and the insured remains eligible for benefits. |
| disability income insurance | A type of health insurance coverage, it provides for the payment of regular, periodic income should the insured become disabled from illness or injury. |
| elimination period | Duration of time between the beginning of an insured's disability an the commencement of the period for which benefits are payable. Keeps premium down. |
| entire contract provision | An insurance policy provision stating that the application and policy contain all provisions and constitute the entire contract |
| estoppel | Legal impediment to denying the consequences of one's actions or deeds if they lead to detrimental actions by another. |
| exclusion rider | Health insurance policy rider that waives insurer's liability for all future claims on a preexisting condition. |
| exclusive provider organization (EPO) | A variation of the PPO concept, contracts with an extremely limited number of physicians and typically only one hospital to provide services to members; members who elect to get health care from outside receive no benefits. |
| Fair Credit Reporting Act | Federal law requiring an individual to be informed if he or she is being investigated by an inspection company. |
| Florida Comprehensive Health Association | Guarantees health insurance to Florida residents who cannot get coverage because of poor health. Rates up to 250% of standard rates. All health insurers, service orgs & fraternal benefit societies selling health insurance must belong to the association. |
| Florida Employee Health Care Access Act | State law governing provisions of group health insurance provided by insurers or HMOs to small employers. |
| Florida Health Insurance Coverage Continuation Act | ACT that req'd insurers selling health plans to small employ to offer a right to elect cont'd cov., w/o prov evidence of insur., to the covered employee or their dep who will lose employer-spons. group cov & who is unable to obtain replacement insurance. |
| franchise insurance | Life/health ins plan for cov groups of ppl w ind pol uniform in prov,though diff in ben. Solici usual. takes place in an employ bus w the employ consent. Gen. writ for groups too small to qualify for reg group cov. May be cal wholesale ins in life ins. |
| general agent | Independent agent with authority, under contract with the company, to appoint soliciting agents within a designated territory and fix their compensation. |
| guaranteed insurability | Arrangement, usually provided by rider, whereby additional insurance may be purchased at various times without evidence of insurability. |
| home service insurer | Insurer that offers relatively small policies with premiums payable on a weekly basis, collected by agents at the policyowner's home |
| hospital expense insurance | Health ins ben subject to a spec daily max for a spec period of time while the injured is confined to a hosp, plus a limited allowance up to a spec amount for misc hosp expenses, such as an OR, anesthesia, lab fees, & so on. Also called hospita. ins. |
| hospital fixed rate | Form of health insurance providing a stipulated daily, weekly or monthly indemnity during hospital confinement; payable on an unallocated basis without regard to actual hospital expense |
| implied authority | Authority not specifically granted to the agent in the contract of agency, but which common sense dictates the agent has. It enables the agent to carry out routine responsibilities. |
| incontestable clause | Provides that, for certain reasons such as misstatements on the application, the company may void a life insurance policy after it has been in force during the insured's lifetime, usually one or two years after issue. |
| indemnity approach | A method of paying health policy benefits to insureds based on a predetermined, fixed rate set for the medical services provided, regardless of the actual expenses incurred. |
| independent agency system | A system for marketing, selling and distributing insurance in which independent brokers are not affiliated with any one insurer but represent any number of insurers. |
| insurable interest | Requirement of insurance contracts that loss must be sustained by the applicant upon the death or disability of another and loss must be sufficient to warrant compensation. |
| insuring clause | Defines and describes the scope of the coverage provided and limits of indemnification. |
| key-person insurance | Protection of a business against financial loss caused by the death or disablement of a vital number of the company, usually individuals possessing special managerial or technical skill or expertise |
| law of large numbers | Basic principle of insurance that the larger the number of individual risks combined into a group, the more certainty there is in predicting the degree or amount of loss that will be incurred in any given period. |
| limited risk policy | Provides coverage for specific kinds of accidents or illnesses, such as injuries received as a result of travel accidents or medical expenses stemming from a specified disease. HAC |
| long-term care | Refers to the broad range of medical and personal services for individuals (often the elderly) who need assistance with daily activities for an extended period of time. |
| major medical expense policy | Health insurance policy that provides broad coverage and high benefits for hospitalization, surgery and physician services. Characterized by deductibles and coinsurance cost-sharing |
| miscellaneous expenses | Hospital charges, other than for room and board, e.g., X rays, drugs, laboratory fees, etc., in connection with health insurance. |
| misstatement of age or sex provision | If the insured's age or sex is misstated in an application for insurance, the benefit payable usually is adjusted to what the premiums paid should have purchased. |
| misuse of premium | Improper use of premiums collected by an insurance producer |
| multiple employer trust (MET) | Several small groups of individuals that need life and health insurance but do not qualify for true group insurance band together under state trust laws to purchase insurance at a more favorable rate |
| nondisabling injury | Requires medical care, but does not result in loss of time from work. |
| optionally renewable contract | Health insurance policy in which the insurer reserves the right to terminate the coverage at any anniversary or, in some cases, at any premium due date, but does not have the right to terminate coverage between such dates. |
| outline of coverage | Informational material about a specific plan or policy of insurance that describes the policy's features and benefits; in many states, its required to be given to consumers when certain types of coverages are being considered. |
| personal producing general agency system (PPGA) | A method of marketng, selling & distribtg ins in which personal producing general agents (PPGAs) are compens for bus they personally sell& bus sold by agents w whom they subcontract. Subcontr agents are considered employees of the PPGA, not the insurer. |
| portability | Provision under the Florida Health Care Access Act in which a worker or dependent will have to meet the waiting period for an existing condition. |
| preexisting condition | An illness or medical condition that existed before a policy's effective date; usually excluded from coverage, through the policy's standard provisions or by waiver. |
| presumptive disability benefit | A disa income policy benefit that prov that if an insured exp a specified dis, such as blindness, he or she is presumed to be totally disabled and entitled to the full amount payable under the policy, whether or not he or she is able to work. |
| principal sum | The amount under an AD&D policy that is payable as a death benefit if death is due to an accident. |
| probationary period | Specified number of days after an insurance policy's issue date during which coverage is not afforded for sickness. Standard practice for group coverages. |
| recurrent disability provision | A disability income policy provision that specifies the period of time during which the reoccurrence of a disability is considered a continuation of a prior disability. |
| reimbursement approach | Payment of health policy benefits to insured based on actual medical expenses incurred |
| reinstatement | Putting a lapsed policy back in force by producing satisfactory evidence of insurability and paying any past-due premiums required. |
| relative value scale | Method for determining benefits payable under a basic surgical expense policy. Points are assigned to each surgical procedure and a dollar per point amount, or conversion factor, is used to determine the benefit. |
| renewable option | An option that allows the policyowner to renew a term policy before its termination date without having to provide evidence of insurability. |
| reserve | Fund held by the company to help fulfill future claims. |
| representation | Statements made by applicants on their applications for insurance that they represent as being substantially true to the best of their knowledge and belief, but that are not warranted as exact in every detail. |
| self-insurance | Program for providing insurance financed entirely through the means of the policyowner, in place of purchasing coverage from commercial carriers. |
| service insurers | Companies that offer prepayment plans for medical or hospital services; well-known examples are Blue Cross/Blue Shield plans and health maintenance organizations. |
| skilled nursing care | Daily nursing care ordered by a doctor; often medically necessary. It can only be performed by or under the supervision of skilled medical professionals and is available 24 hours a day. |
| sliding | The act of tell an ins appl that the law req to buy a spec ancil cov or prod w the purchase of ins when that cov or prod is not reqd. Also the act of tell an applt that a pol includ a spec ancill cov or prod w/o addl charge when such a charge is reqd |
| small employer | An employer who employs not more than 50 employees, the majority of whom are employed in Florida. |
| special risk policy | Provides coverage for unusual hazards normally not covered under accident and health insurance, such as a concert pianist insuring his or her hands for a million dollars. |
| surgical expense insurance | Provides benefits to pay for the cost of surgical operations. |
| surgical schedule | List of cash allowances payable for various types of surgery, with the respective maximum amounts payable based upon severity of the operations; stipulated maximum usually covers all professional fees involved, e.g., surgeon, anesthesiologist |
| third-party administrator (TPA) | An organization outside the members of a self-insurance group which, for a fee, processes claims, completes benefits paperwork and often analyzes claims information. |
| time limit on certain defenses | A provision stating that an insurance policy is incontestable after it has been in force a certain period of time. It also limits the period during which an insurer can deny a claim on the basis of a preexisting condition. |
| total disability | Disability preventing insureds from performing any duty of their usual occupations or any occupation for remuneration; actual definition depends on policy wording. |
| transacting insurance | The trans. of any of the following, solicititation or inducement; prelim negotiations; effecting a contract of insurance; transacting matters subsequent to effecting a contract of insurance and arising out of it |
| Unfair Trade Practices Act | A model act writ by the National Ass. of Insurance Commissioners (NAIC)& adopted by most states empowering state ins. commis. to investigate & issue cease&desist orders& penalt to insurers for engag in unfair or decept prac such as misrep. or coerc. |
| unilateral | Distinguishing characteristic of an insurance contract in that it is only the insurance company that pledges anything |
| void contract | An agreement without legal effect; an invalid contract. |
| voidable contract | A contract that can be made void at the option of one or more parties to the agreement. |
| waiver | Agreement waiving the company's liability for a certain type or types of risk ordinarily covered in the policy; a voluntary giving up of a legal, given right. |
| warranties | Statements made on an application for insurance that are warranted to be true; that is, they are exact in every detail as opposed to representations. Statements on applications for insurance are rarely warranties, unless fraud is involved |
| workers' compensation | Benefits paid workers for injury, disability or disease contracted in the course of their employment. Benefits and conditions are set by law, although in most states the insurance to provide the benefits may be purchased from regular insurance companies. |
| guaranty association | Established by each state to support insurers and protect consumers in the case of insurer insolvency. Funded by insurers through assessments. |
| free look | Provision required in most states whereby policy holders have either 10 or 20 days to examine their new policies at no obligation. 30 for medicare. |
| flat deductible | Amount of covered expense; payable by the insured before medical benefits are payable. |
| errors and omissions insurance | Professional liability insurance that protects an insurance producer against claims arising from service he or she rendered or failed to render. |
| Blue Cross | Hospitalization PART A |
| Blue Shield | Covers Doctors and Misc. PART B |
| Chronic conditions | serious conditions that can't go away (ie Heart Disease, Arthritis) |
| claim forms | 15 days Insurer must provide claim form under this provision |
| Subrogation | Pursues the 3rd party that insinuated the loss . Goes with INDEMNITY contracts. Does not exist in life insurance. |
| Notice of Claims | Insured must provider notification of loss to insurance company in 20 days. |
| Reinstatement | When a lapsed policy is reactivated if no action is taken, after 45 days the application is ________ |
| ERISA | Gave the US Dept of Labor (Federal) enforcement. Deals with employee health and welfare benefit plans. Stated differently it deals with matters relating to employer-sponsored health insurance plans. |
| Custodial Care | Assists with daily living req. ie bathing and dressing. Though it does not require medical training, must be administered under a physicians order. |
| Medigap | -Medicare Advantage plan recipients are ineligible. There are 10 plans. Pre-ex excluded for 6 months, 30 day free look. |
| Social Security Disability Income | Must be mentally/physically disabled and can't work. Disability must be expected to last 12 months. 5 month waiting period |
| Any occupation | Disability hinders one from working based on education, training or experience |
| Surgical Schedule | surgical procedure is provided a dollar amount by the insurer. Claim amout would NEVER exceed the amount incurred. |
| Reasonable and Customary approach | Pays what is reasonable based on the geographic region. If the amount is beyond the reasonable amount, insured must absorb (PAY) the extra cost. |
| Basic Medical Expense Plan | No deductible or co-insurance, 1st dollar amount, has limitations of benefits, or services. |
| Medicare part B | Voluntary, Annual deductible, Monthly premium 80/20 co insurance |
| Medicaid | Provides medical public assistance to needy folks, regardless of age. State funded matched by federal $. Also for blind, disabled, or under 21. |
| Major Medical Expense plans | Has deductibles and co-insurances, protection from high cost of medical care. Available on an individual or group basis. Services must be prescribed ny a licensed physician and be necessary for treatment. |
| HMO | Comprehensive, pre-paid health care services. Organize and deliver health services. Stresses preventative care, doctors are prepaid (capitation) |
| Disability Benefit Period | The maximum time benefits are paid out. Short term: benefits provided 6 months to 2 years then payments stop. Long term: range from 5-20 years or up to age 65. |
| Medical Expense Insurance | Benefits for medical care. Reimbursing insured fully or in part |
| Commercial Insurers | Life insurance companies, Casualty insurance companies and monoline companies. (Both group and life) NOT SURETY. They also function on the reimbursement approach. |
| Disability Income Insurance | Provides replacement income when wages are lost due to disability. Periodic income payments. |
| AD&D Insurance | Provides insured with lump-sum benefit amount in the event AD&D. Usually part of a group plan |
| Contract of Reimbursement | Dependent on the amount of the loss, not a fixed amount. |
| Valued Contracts | They pay the amount stated in the contract if a defined event such as death or disability occurs. Set amount expressed in contract. IE Life, AD&D and Disability |
| Group Health Insurance | Maternity included, issued by commercial insurers, employer is policy ownder, contracts are more liberal than individual |
| Individual Health Insurance | Issued by commercial insurers, contracts between insured and company, maternity provisions excluded |
| Specified Exclusions in Long Term Care | Drugs and alcohol dependency, acts of war, self inflicted injuries. Non organic medical conditions (bipolar, depression) |
| Probationary Period in Disability Income | Starts the day the policy starts, period of time that must elapse following effective date. Ends in 15/30 days. Applies only to sickness |
| Right of assignment | Policyowners assign benefit payments from the insurer directly to health care provider. |
| Impairment rider | Rules out coverage for losses resulting from chronic conditions, physical impairments. |
| Risk factors in health insurance | MOP. Moral hazards, physical conditions, and occupation |
| Health Insurance Premium Factors | MIX. Morbidity, Interest and Expense are the main ones. Also types of benfits, sex, age, occupation, claims experience. |
| Medicare Part C "Managed Care for Seniors" | Managed Care Plans, PPOs, speciality plans. Must have A and B to get C. Introduced in 1997 to alleviate financial strain on Medicare funds, and offer Medicare beneficiaries with a variety of options. |
| Medicare | Federally administered, 65+, chronic kidney or receiveing SSD benefits. |
| State Workers Compensation | Provides mandatory benefits for work related injuries, illness or death. |
| Supplementary Major Medical | Supplements a basic plan, covers costs not included under basic |
| Comprehensive Major Medical | Covers all medical expenses, includes deductibles and co-insurance |
| Florida Healthy Kids Corporation | Provides coverage to uninsured children, voluntary participation. Coverage can be preventative care to major surgery |
| Basic surgeon expense | Coverage for the cost of surgeon's services. SAP (Surgeon, Anesthesiologist, Post-op) |
| Guaranteed Insurability Rider in Disability | Allows the insured to buy additional amounts of disability income coverage. |
| Special Risk | Unusual hazards not covered by any other insurance. (Ie, JLO's butt, test pilot) |
| Flat deductible | stated amount that the insured must pay before benefits are payable |
| Limited Risk | Provides benefits to cover specific risks like Heart Disease, Airplane Passengers and Cancer (HAC) |
| Disability Income benefits | Monthly income payments, insureds earnings set the limit of benefits. In group disability it is the percentage of earning approach. In individual it is the flat amount. |
| Renewability Provision | Cancellable, Optionally Renewable, Noncancellable, Guaranteed Renewable |
| Stop-loss feature | The most you will pay for out of pocket expenses as specified in policy. (Does not include deductible) |
| Relative Value Scale | surgical procedures are assigned points |
| Acute illness | serious condition that can be treated with proper medical attention |
| 3 Distinct categories of Health Coverage | Medical Expense Insurance, Disability Income Insurance, AD |
| 2 Major factors influencing dividends or experience rated refunds | Expenses and claim costs |
| Major Medical Insurance | Can work as supplement to a basic plain, comprehenisve stand alone |
| Penalty for Aiding and Abetting an Unauthorized Insurer | 3rd degree felony, Liability all unpaid claims, Suspension or revocation of all insurance licenses |
| Penalty for willingly submitting fraudulent signatures on an application or policy | Third degree felony, $5,000 fine for any nonwillful violation, $75,000 for each willful violation |
| Penalty for Failure to answer a subpoena by Chief Financial Officer | 1,000 fine |
| Penalty for an agent who exhibits fraudulent conduct by twisting or turning | $5,000 fine for any nonwillful violation, $75,000 for each willful violation, 1st degree misdemeanor |
| Penalty for Acting as an Insurer without Proper License | Liability of all unpaid claims Suspension or revocation of all insurance licenses, 1st degree felony |
| Penalty for Knowingly making a false or fraudulent application for any license, or violating any provision of the Insurance Code | Misdemeanor by fine of not less than $500, no more than $3,500, imprisonment for up to 6 months, denial,revocation or suspension of license. |
| Penalty for Willful violation of the Insurance Code | CFO Can revoke license, CFO can assess an amount equal to commission earned, 2nd degree misdemean |
| Penalty for Violating a cease and desist order from the Chief Financial Officer | administrative penalty of up to $50,000, In event of fraud CFO can turn the matter over to the Attorney General |
| Penalty if an agency qualifies for registration and fails to file an application | administrative penalty of up to $5,000 |
| Penalty If an agency does not qualify for registration and fails to file an application for licensure | administrative penalty of up to $10,000 |
| Professional Employer Organization (PEO) | An employee leasing company co-employer relationship established, they handle all the administrative functions where the original employer continues to control the common law incidents of employment. |
| Stranger Oriented Life Insurance | Life insurance arrangements where investors persuade individuals, typically seniors to take out new life insurance with the investors named as beneficiaries. |
| United States v. Southeastern Underwriters Association (SEUA) | The result of this case shifted the balance of regulatory control to the federal government in 1944. |
| Paul v. Virginia | This case which was decided by the US Supreme Court in 1868 ruled that the sale of insurance is not interstate commerce, thus ruling that states had the right to regulate insurance. |
| The McCarran-Ferguson Act | This law in 1945 made it clear that continued regulation of insurance by the state was in the public's best interest. |
| Fair Credit Reporting Act | In an attempt to protect individual's rights to privacy, this act was established in 1970 by the federal government which requires fair and accurate reporting of information about consumers, including applications for insurance. |
| Financial Services Modernization Act | Under this legislation in 1999, commercial banks, investment banks, retail brokerages, and insurance companies can now enter each other's lines of business. |
| National Associatin of Insurance Commissioners (NAIC) | This organization works to encourage uniformity in state insurance law and regulations, to assist in the administration of those laws, to protect the interests of policy owners and consumers, and to preserve state regulation of the insurance business. |
| Rating Services | The financial strength and stability of an insurance company are two vitally important factors to petential insurance buyers and to insurance companies themselves. A.M's Best, Standard and Poor's, Moody's and Fitch's are examples. |
| Presentation of recommendations | The phase of the selling process where serious problems of misrepresentation is likely to occur |
| Home office underwriting process | During this process, a credit report, MIB report and inspection report are sought. |
| Misuse of premiums | Diverting insurance funds for personal use is an example of this |
| Churning | When values of an insurance policy are used to purchase another policy with the same insurer for the sole purpose of earning addt'l premiums, this practice is called |
| Solicition of Insurance | Inviting prospective purchasers to enter a contract, making general or specific recommendations concerning insurance products, comparing products, advising on insurance matters or interpreting coverages or policies is an example of |
| Constructive delivery | Accomplished when an insurance company reliquishes all control over the policy and turns it over to someone acting for the policyowner, including the company's own agent. |
| Binding Receipts | Also known as a temporary insurance agreement, this guarantees coverage, even if a proposed is found to be uninsurable, until the insurer formally rejects the application. |
| Conditional Receipt | A receipt stipulating that certain conditions must be met in order for the insurance to go into effect. |
| Buyers Guide and a Policy Summary | These two documents are usually delivered before the agent accepts the applicant's initial premium. |
| Social Security | Provides basic floor protection to all working Americans against the financial problems brought by death, disability, and aging. This helps, but does not replace a sound personal insurance plan. |
| a multiple policies form | When an agent is soliciting Medicare Supplemental insurance this form needs to be signed. |
| Independent Agent | works for himself or for other agents and sells the insurance products of many companies |
| Consideration clause | states the amount and frequency of premium payments. Also lists the effective date of the contract and defines the initial term of the policy. In addition, it may specify the insured right to renew the policy. |
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