Card Set Information
(Re-insurnace) When one insurance company transefers risk to another company, this process is called?
What kind of re-insurance is done policy by policy?
What kind of re-insurance is done by class?
Stockholders own it
Stockholders benefit by way of dividends
It does not pay dividends to policyholders
...For the benefit of the policyholders nobody really owns it.
Dividends to policyholders
Dividend is NEVER guaranteed
Clubs or organizations that offer insurance.
Offer ONLY to its members
Knights of columbus....
Basically, if you have the money, a really high deductable. So much moeny you will cover before the insurance company starts to pay out on a loss.
Risk Retention Groups
Group self insurance.
Must be in same line of work
No one company is large enough to self insure so they go in together.
Doctrine of Utmost good faith
Both parties rely on the good faith in one another otherwise the contract will not work.
Doctrine of Reasonable Expectations
If my house is burnt down I can REASONABLY EXPECT that the insurance company will do something to compensate me for my loss based on the terms in the contract.
Contracts of adheasion
Non negotiable, take it or leave it. Ambiguious statements are ruled in favor of the insured.
Required Elements of a Contract (5)
Offer - Offer Coverage
Acceptance - Agreement to accept Coverage
Consideration - Something of Value (Premium and Ins. Co. promise)
Competant Parties - No minors, intoxicated people, or insane people
Legal Purpose- enforcable by law by being legal
3 pairs of 2
Warranty- Absolute literal truth usually notorized
Representation- True to best knowledge and belief
Misrepresentation- a lie. false statement of material fact
Concealment- Hiding the truth or telling partial truths. Lies of omission.
Intentional- on purpose
Material - something needed for contract
The "lies" must have both intentional and material factors to effect policy.
the result of a lie. The intentional act of deception to benifit financially ast the expense of another.
Someone who is responsible for the financial affairs of another. Someone who holds anothers money
a document that when signed states one knowingly gives up rights that they have.
Not a policy but temporarily instates coverage.
Binder does not have to be in writing.
Binder Question 2. Ways in which a binder can expire.
Own expiration date
Policy issue date
Day after notice of cancellation is recieved
Distinct Characteristics of an insurance policy
Personal Contract - Personal in nature (special)
Conditional - If, then statements
Unilateral - only one party does the promising
Aleatory - one party many obtain a far greater value than the other.
Adhesion - The company wrote it, take it or leave it.
Parts of a Policy (DICE)
Declarations - limits
Insuring Agreements - promises
Conditions - ground rules
Exclusions - not covered
Law of Large Numbers
premium is based on statistics from a large group of homogeneous (similar) risks
Fair Credit Reporting Act.
Cannot get credit report w/o consent of insured
If turned down because of something in report you must tell client
you do not have to give your copy but you do have to tell them where you got it from.
negitive info stays for 7 years
bankruptcy 10 years
consumers can question validity
Powers of the Agnecy
Agent- a legal representative of the company
Agent Extentds Colmpanies Liability- your words and actions are the companies
Agents knowledge - Your knowledge is the companies knowledge
Agent Authority - Expressed vs. Implied vs. Apparent
Expressed - Specifically granted to you in your agency agreement
Implied - Powers that arent specifically stated but are implied that you have so you can do your job
Apparent - between you and your customers, they believe you have the power to act in ways as a representative of your company