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Chapter 1
| Term | Definition |
|---|---|
| Actuarial department | The actuarial department calculates policy rates, reserves, and dividends |
| Alien insurer | An Alien Insurer in the United States in an insurer whose principal office and domiciled location is outside the country |
| Admitted Insurer | An admitted or authorized insurer is an insurer who has received a certificate of authority from a state’s department of insurance authorizing them to conduct insurance business in that state |
| Broker | A Broker represents themselves and the insured (I.e., the client or customer ). |
| Captive Insurer | A Captive Insurer is an issuer established and owned by a parent firm for the purpose of insuring the parent firm’s loss exposure |
| Certificate of Authority | A Certificate of Authority is a license issued to an insurer by a department of insurance ( or equivalent state agency )which authorizes that company to conduct insurance business in that particular state |
| Claims department | The claims department is responsible for processing, investigating, and paying claims |
| Divisible Surplus | Divisible surplus is the amount of earnings paid to policy owners as dividends after the insurance company sets aside funds required to cover reserves, operating expenses, and general business purposes |
| Domestic Insurer | A Domestic Insurer is an insurer with its principal or home office in a state where it is authorized |
| Foreign Insurer | A Foreign Insurer is an insurer with its principal office or domicile location in a state different from the state it is transacting insurance business |
| Fraternal Benefit Society | Fraternal Benefit Societies are nonprofit benevolent organizations that provide insurance to its members |
| Industrial Insurer | Industrial Insurer make up a specialized branch of the industry primarily providing policies with small face amounts with weekly premiums. Other names of industrial insurers include home settle debit insurers |
| Insurance | The transfer of risk through the pooling or accumulation of funds |
| Insured | The insured is the customer receiving insurance protection under an insurance policy |
| Insurer | The insurer is the insurance company |
| Lloyds of London | Lloyds of London is NOT an insurer, but a group of individuals and companies that underwrite unusual insurance |
| Multi-line Insurer | A multi-line insurer is an insurance company or independent agent that provides a one stop shop for business or individual seeking coverage for all their insurance needs. For example, many large insurers offer individual policies for automobile, homeowner |
| Mutual Insurance Company | Mutual Insurance Company are insurance companies characterized by having no capital stock, being owned by its policy owners and usually issue participating insurance |
| Non-admitted Insurer | A non-admitted or unauthorized insurer is an insurer who has not received a certified authority from a state’s department of insurance authorizing them to conduct insurance business in that state |
| Nonparticipating policy | A nonparticipating insurance policy typically issued by stock companies do not allow policy owners to participate in dividends or electing the board of directors |
| Participating Plan | A participating plan is an insurance policy under which the policyowners share in the company’s earnings through receipt of dividends and also elect the company’s board of directors |
| Private (Commercial) Insurer | Private or commercial insurance companies are companies owned by private citizens or groups that offers one or more insurance lines. Commercial insurers are NOT government - owned |
| Reciprocal Insurer | A Reciprocal Insurer is an unincorporated organization in which all members insure one another |
| Reinsurance | Reinsurance is the acceptance by one or more insurers called reinsurers or portion of the risk underwritten by another insurer who has contracted for the entire coverage |
| Reinsurer | A reinsurer is a company that provides financial protection 2 insurance companies. Reinsurers handle risks that are 2 large 4 insurance companies 2 handle on their own &make it possible 4 insurers 2 obtain more business than they would otherwise b able 2 |
| Risk Retention Group | A Rick Retention Group is a group- owned liability insurer which assumes and spread product Kia it and other forms of commercial liability risks among its members |
| Self - Insurers | A self-insurer establishes a self-funded plan to cover potent losses instead of transferring the risk to an insurance company |
| Stock Insurance Company | A stock company is an insurance company owned and controlled by a group of stockholders (or shareholders) whose investment in the company provides the safety margin necessary in the issuance of guaranteed, fixed premium nonparticipating policies |
| Surplus Lines Insurance | Surplus Lines Insurance is no traditional insurance only available form a surplus lines insurer. They offer coverage for substandard or unusual risks not available through private or commercial carriers |
| Underwriting Department | The underwriting department is the department within an insurance company responsible for reviewing applications, approving or declining applications and assigning risk classifications |
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Hollywoodcole22
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