Insurers- (1)
Insurance Agencies- (2)
Insurance Agents or Producers- (3)
1-proivde insurance coverage by issuing particular insurance policies or contracts
2- are independent sales organizations that provide service and distribute insurance policies to consumers
3- licensed individuals representing an insurance company when tr
Insurance industry is regulated primarily at ____1_______ level. NAIC stands for ___________2_____________.
1- the state level
2- National Association of Insurance Commissioners
NAIC is a __________________________________.
regulatory support organization created and governed by the chief regulators and commissioners from the 50 states. The NAIC has no legel authority to enact or enforce insurance laws. Primary goal is to promote state uniformity.
Type of Insurers-
-Stock insurance company (stockholders)
-Mutual Insurance company (owned by policyholders. Receive non-taxable dividends)
-Fraternal Insurers (known as fraternal benefit societies... social orgs that engage in charitable and benevolent activities that pro
A _______________ insurance company is owned by its policyholders.
- Stock -Mutual -Reciprocal -Fraternal Benefits Society
-Mutual,
Domicile- refers to the location, or jurisdiction (state, district, territory, or country) where an insurer is formed or incorporated. There are three kinds of insurer domicile are _________, __________, and ______________.
Domestic insurer, Foreign insurer, alien insurer
Domestic insurer- 1
Foreign insurer- 2
Alien insurer- 3
1- an insurer organized under the laws of a state in which it is placing business insurer in that particular state
2- an insurer placing business anywhere within the US OTHER THAN the state, district, or territory ... Kansas insurer s foreign to new york
An admitted or authorized insurer is approved to transact insurance in a given state if it has been granted a _________________________________. Non-admitted or unauthorized insurer is not authorized to transact insurance in a given state by failing to co
Certificate of Authority
Which of the following is an insurance company that is organized under the laws of different state within the United States?
Foreign
FCRA- Fair Credit Reporting Act. Need to give them a __________, _________, and _____________. The applicant is entitled to be ingormed of anyone who requested a copy of the report in the prior 6 months.
pre-notification, written consent, and post-notification
USA Patriot Act and Anti-Money Laundering (AML) passed to _______________.
help detect and prevent this illegal activity. Financial institutions are required to provide anti-money laundering training to their producers
A federal regulation called the _______________ protects consumer privacy.
Fair Credit Reporting Act
An insurance policy is a _______________________________________.
legal contract b/w two parties, purchased by the insured and stating that the insurance company promises to make payment for a loss arising from an unexpected event.
Indemnify-
compensate for a loss, or to make one whole again.Principle of Indemnity is to restore the same physical of financial condition prior to the loss, without profit.
In the case of life and health insurance, contract law requires that insurable interest must exist at the time of the __________________________.
application, not the loss.
For life and health insurance, insurable interest must exist at the time of:
Application
Elements of a Legal Contract:
Competent parties, legal purpose, agreement (offer and acceptance), consideration (payment of premium and promise to indemnify)
Each of the following is an element of a legal contract, except:
Indemnity
Contract of Adhesion- 1
Aleatory Contract-2
Unilateral Contract- 3
Conditional Contract- 4
1- written by one party, the insurance company, w/out any input from the applicant.. Contract is not negotiable
2- uncertain event, or by chance. unequal exchange of consideration by either party, depending on if a loss actually occurs and to what extent.
Representations- 1
Material vs. Immaterial Representations-2
Misrepresentations-3
Warranties- 4
1- Statements made by the applicant on the application. required to be substantially true.
2- statements that impact the acceptance of an insurable risk is material. Immaterial to not affect the acceptance or ratings of a risk.
3- A false statements conta
A warranty is defined as which of the following?
Statement in the application that is guaranteed to be true
Aleatory Contract- 1
Based on the uncertainty of a loss, there will likely be an unequal exchange of consideration by either party