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AINS 3
| Term | Definition |
|---|---|
| Balance Sheet | The financial statement that reports the assets, liabilities, and owners' equity of an organization as of a specific date. |
| Unearned premium reserve | An insurer liability representing the amount of premiums received from policyholders that are not yet earned. |
| Expense Ratio | incurred underwriting expenses for a given period / written premiums for the same period. |
| In the agency relationship, the party that is authorized by the ______ to act on the _______’s behalf. | principal (authorizes the agent to act on that party’s behalf, the insurer) |
| Telematics | The use of technological devices to transmit data via wireless communication and GPS tracking. |
| Policyholders surplus formula | assets - liabilities= net worth (policyholder's surplus) |
| A temporary written or oral agreement to provide insurance coverage until a formal written policy is issued. | Binder |
| A brief description of insurance coverage prepared by an insurer or its agent and commonly used by policyholders to provide evidence of insurance | Certificate of insurance |
| A report detailing an insured’s history of claims that have occurred over a specific period, valued as of a specific date. | Loss Run |
| Compensation in the form of a flat fee or a commission that is paid by the reinsurer to the reinsurance intermediary for services provided. | Brokerage |
| Contract of indemnity | A contract in which the insurer agrees, in the event of a covered loss, to pay an amount directly related to the amount of the loss. |
| Principle of indemnity | The principle that insurance policies should provide a benefit no greater than the loss suffered by an insured. |
| A risk control evaluation can make the difference between what? | the applicant’s being rejected or accepted by the underwriter |
| The size of an employer's loss exposure for workers compensation insurance is based on | the amount of payroll |
| All of the following appear on an insurer's balance sheet, except what?: Liabilities, policyholder's surplus, assets, net income | net income |
| An insurer's income statement shows amounts for all of the following, EXCEPT: underwriting expenses, policyholder's surplus, incurred losses, earned premiums | Policyholder's surplus |
| The insurance agent suggested that Sally’s Snack Shop buy a policy that combines property, crime, and liability coverages into one policy. This is referred to as a(n) | Commercial package policy (CPP) |
| Work on a new claim begins for claim representative Anita upon receipt of a claim notice. Anita gathers initial information and verifies coverage. From the list of activities below, the next step Anita would take in the process is | set a loss reserve |
| exclusions are in place to reduce ______ | duplicate coverage |
| New homeowner and small business owner Sallie learns that an insurance policy may contain other documents than its insurance forms. Accordingly, which one of the following will Sallie find is true regarding her new insurance purchases? | Sallie’s application may contain endorsements which modify the basic policy form. |
Created by:
meghan_pfeiffer