Terms to know
Card Set Information
Terms to know
Policy Owner -
May or may not be the insured person, but the one with the rights to make changes, etc.
Person or entity to which the benefits are paid
Premium Mode -
The frequency of a payment; monthly, quarterly, semi-annually or annually.
Risk - 3 Types:
Preferred, Standard & Substandard
Cause of Loss
Statistical chances of dying by using specific populations, diseases, ages, etc.
Hazard - 4 Types:
Physical, Moral, Morale and Legal
Law of Large numbers -
The larger the pool of information gathered, the more reliable it becomes.
Loss Exposure -
Degree to which a person or property is at risk.
Par / Non-Par -
Participating (Mutual) or non-participating (Stock) in paying dividends to
Ideally Insurable Risk - 2 areas:
Accidental, creates a financial hardship
Adverse Selection -
Tendency of those who need insurance to buy it.
Spread of Risk -
Transfer or pool the risk.
Deliberately providing false information for gain/profit.
Hiding material information.
Warranty - 2 Types:
Expressed or Implied.
Important facts to the contract. Representation - Oral or written expression of information.
False information about a contract
Authority - 2 Types:
Expressed and Implied
Transacting Insurance - 4 areas:
Execution, negotiation, Solicitation of the contract, or any other transaction resulting in these
Display of License -
Must be in a prominent place in your office.
Record Keeping -
Available in 30 days upon request; all policy information must be
accessible in 30 days notice and on file for 2 years.
Printing License # and Fines -
Must be printed on ALL material to the public; fines are for each offense and are $200 1st, $500 2nd, $1000 ea offense after that.
Broker Fees -
Must be disclosed.
Notice of Appointment -
Every licensee must have one on file with the DOI to be actively licensed.
Code Administration -
Commissioner doesn’t create the code, only determines how to implement it, etc.
1st attempt at restoring an insurance company that is close to insolvency
LESLI list -
List of Eligible Surplus Lines Insurers
Proximate Cause -
Unbroken chain of events that results in damage or injury due to negligence
Liberalization Clause -
Broadening coverage without any extra charge during a policy period
Direct / Indirect Loss -
Reduction of the quantity, quality or value of something do to a covered loss / Consequential losses as a result of the covered loss.
Combined Ratio -
Incurred losses + loss adjusted expenses and earned premium = Loss Ratio
Short rate -
Cancellation made by an insured prior to it’s expiration date and surcharged by the Company.
Pro Rata -
Cancellation made prior to the expiration date and @OT surcharged by the Company.
Flat Rate -
Cancellation of a policy back to its inception date with all premiums 100% refunded.
Cancel / Non-renew / Lapse -
Cease coverage/ Company not continue beyond expiration date / Cancels due to non-pay.
Unearned Premium -
Money the company owes an insured for the unused portion of time already paid for.
Earned Premium -
Money owed to the company for a coverage period provided but not yet paid for.
Contingent / Expectant Interest -
Just because I expect to own something in the future will not allow me to buy coverage for it now.