| A | B |
|---|
| private insurance companies are also known as | commercial insurers |
| Commercial insurance are in the business of selling insurance for | a profit |
| an insurance company selling more thanone line of insurance is called a | Multi-line insurer |
| 2 main groups of commercial insurance are | stock and mutual insurers |
| stock companies are organized and incorporated under | state laws |
| purpose of stock companies is to make a profit for | stockholders |
| stockholders are also known as | shareholders |
| Kala is a stockholder of | Tesla :) |
| stock insurers are also known as | nonparticipating insurers |
| in stock companies, policyholders | do not participate in receiving dividends or electing the board of directors (unless they are a stockholder) |
| in stock companies, stockholders are paid | stock dividends |
| stockholders | in a stock company, the directors and officers are responsible to the |
| transformation of stock insurer into a mutual insurer is termed | mutualization |
| mutual insurer transforming into a stock insurer is called | de-mutualization |
| Dividends from a stock insurer are subject to | taxation |
| dividends from a stock insurer are considered | profit |
| mutual companies are owned by | their policyholders |
| mutual insurers are known as | participating insurers |
| policyholders participate in | receiving dividends and electing the board of directors in Mutual Companies |
| mutual company dividends are paid to the | policyholders |
| dividends from a mutual insurer are | NOT subject to taxation |
| dividends from a mutual insurer are considered to be a return of | premium |
| Accumulated interest would be taxable if a mutual co. policyowner chooses to | let dividends sit and collect interest |
| If a mutual co. policyowner chooses to let the dividends sit and collect interest, | only the accumulated interest would be taxable |
| if a company operates as both a particpating and nonparticpating insurer the company is known as a | mixed insurer |
| dividends can never be _____ regardless of the type of company offering them | guaranteed |
| in a PURE ASSESSMENT mutual company | losses are shared by group members |
| no premiuim is payable in advance in a | pure assessment mutual company |
| in an ADVANCE PREMIUM ASSESSMENT mutual company | premiums are charged at the beginning of the policy period |
| in an ADVANCE PREMIUM ASSESSMENT mutual, surplus is | returned to the policyholders are dividends |
| in an ADVANCE PREMIUM ASSESSMENT companies, if total premiums are not enough to meet losses | additional assessments are levied against the members |
| Fraternal benefit societies are | special types of mutual companies |
| examples of fraternal benefit socities are | nonprofit religious, ethnic or charitable organizations |
| fraternal benefit societies provide insurance | solely to their members |
| example of a fraternal society | Knights of Columbus |
| Fraternal societies must be formed for | reasons other than obtaining insurance |
| mutual companies formed by a group of people in the same industry or profession are called | risk retention groups |
| service providers offer benefits to subscribers | in return for the payment of a premium |
| Examples of service providers are | Health Maintenance Organizations (HMO's) and Preferred Provider Organizations (PPO's) |
| Health Maintenance Organizations are also known as | HMO's |
| Preferred Provider Organizations are also known as | PPO's |
| Unincorporated groups of individual members that provide insurance for other members through indemnity contracts are known as | reciprocal insurers |
| In a reciprocal insurer each member acts as both | insurer and insured |
| Members in a reciprocal insurer act as both insurer and insured and are managed by | Attorney in Fact |
| A company transferring risk to another company is the | Ceding Company |
| A company assuming risk from another company is called a | Reinsurer |
| An insurer established and owned by the parent company is called a | Captive Insurer |
| A captive insurer is established by the parent company to | insure the parent company's loss exposure |
| Home Service Insurers are also known as | industrial insurance |
| industrial insurance is sold by | home service or debit life insurance companies |
| face amounts for industrial insurance are usually | $1,000 to $2,000 |
| industrial insurance usually involved premiums that are paid | weekly |
| Types of government insurance | Social Security, Medicare, Medicaid, SGLI & VGLI, Tricare |
| Social Security is also known as | OASDI (Old Age Survivor Disability Insurance) |
| Social security provides income benefits for | the elderly, survivors of those who died young, and disabled people |
| Health INsurance to care for the elderly | Medicare |
| Health insurance to AID the poor/financially needy | Medicaid |
| Serviceman's Group Life Insurance | SGLI |
| Veteran's Group Life Insurance | VGLI |
| health insurance for members of the military and their family | Tri-Care |
| Those who retain risks and have enough capital to pay claims are | Self-insurers |
| Self-insurers are NOT | a method of transferring risk |
| Self-insurers establish their own | self-funded plan to cover losses |
| A plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called a | self-funded plan |
| This is NOT an insurance company | Lloyd's of London |
| Lloyd's of London is | an association / group of investors |
| In Lloyd's of London members of the association | form syndicates to underwrite and issue insurance-like coverage |
| the group of investors in Lloyd's of London share in | unusual risk |
| If an agent works for only one insurer, she is known as | a captive agent |
| If an agent works for herself or for several insurers NON-exclusively, she is | an independent agent |
| With the career agency system, commercial insurers | establish offices in certain locations |
| The person who hires and trains new producers and supervises a number of other producers is known as | a general agent |
| a general agent working in a career agency system | recruits and trains new agents |
| Personal Producing General Agency System is also known as | PPGA |
| All producers under the career agency system are | captive agents and employees of the insurer |
| With the PPGA system, agents work for an independent agency selling policies | from several insurance companies |
| In a PPGA, agents are NOT | employees of the insurance company and instead work for the PPGA |
| Personal Producing General Agents primarily | sell insurance (instead of recruiting and training new agents) |
| Independent Agency System is also known as | American Agency System |
| In the Independent Agency system | independent agents represent a number of insurance companies under separate contractual agreements |
| Independent insurance agents have control & ownership | over their clients' accounts |
| an independent insurance may place clients' business with a different insurer when | policies are up for renewal |
| independent insurance agents earn | commissions on the sales they make and overrides on sales made by agents they manage |
| With this system, branch offices are established in several locations | Managerial System |
| IN a managerial system the agency is run by | a salaried branch manager |
| In a managerial system, a salaried branch manager is employed by | the insurer |
| A way to sell insurance | Mass Marketing |
| Methods of direct insurance sales through mass marketing | direct mail, TV, radio ads, newspapers and magazines, over the internet |
