C81 Part 1: Study 3 Flashcards
(22 cards)
Paid up capital
Represents that part of subscribed capital that has been paid in full by shareholders
Outstanding loss reserves
Funds set aside to pay for losses that have been incurred but not yet paid
Factory Mutual
Insurance companies of the mutual type thst specialize in industrial risks & in loss of prevention
Mutual Insurance Company
An insurancr company that is owned & operated by its policy hokders, who assume the risk of profit & loss & establish a corporation for the purposes of insuring one another against the possibility of fortious loss. Each policyholder pays a premium for his or her own insurance policy. if at the enf of the fiscal yesr the mutual insursnce fompany deflared a profit, this is shared among policyholders. If there is a loss, the policyholders must be assesed a levy to make up for the shortfall
Captive Insurance Company
An insurance compaby that provided insurance to, and is controlled by its owners
Lloyd’s
London based insurance & reinsurance market, structured as a corporstion, that provided the facilities, including ohysicsl location, policy issuance, account for multiple financial brokers grouped in syndicates to pool & spread risk
Capacity
The measure of sn insurers ability to issue contracts of insursncr. Measured usually by the largest amount it will accept on a given risk or, in certain situations, by the maximum volume of buisness that the company is prepared to accept
Syndicate
A group of companies or inderwriters organized to insure risk in the Llyod’s insurance market
Coverholder
An individual or company that has the authority to bind coverage for s specific line or buisness as outlined in a contract with an insurer
Reserves
Fundd that are set aside by an insurance company for the purposes of meeting obligations as they fall due. such obligations would include liabilities for unearned premiumd and the estimated costs if unpaid claims
Commision
Compensation based upon the amount of production; for example independent insursncr agents are compensated on the basis of a percentsge of the premium. the percentsge varied with different lines of insurance
Actuary
One who specializes in the mathematics of insurance, mortaljty rates & the like
Ratemaking
The proceds of compiling & analyzing data to establish tates that accurately reflect the level of risk. usually preformed by actuaries
Producer
A broker or agent who sells inurance
Underwrite
To insure. More commonly to scrutinizing a risk, then decide on it’s elgibility for insurance
Claims
The assertion if a demand made by one party against snotjer for indemnity or resution for personal injury/property damave arising out of negligence/ contractual right
Law of large numbers
The mathematical premise that states the degree if uncertainty is reduced as the number of events increases
Exposure
The hazard threatening a risk because of external or internal physical conditions
Solvency
A buisness entitys ability to meet its long term financial commitments
Treaty
An agreement between an insurance company & a reinsurer. The reinsurer automatically accepts a portion of the ceding companys liability for s specified class or classes of buisness. Terms of the agreement are set forth therein; for example, premium payment, loss limits
Facultative Reinsurance
Reinsurance of risks on an indivudusl case by case basis, subject to acceptance or rejection by the insurer
Reinsurance
Insurance purchased by an insurance company from another insurance company (reinsurer) to provide it protection against latge losses on cases its already insured. Reinured may also be reffered to as the “original” / “primary” insurer on the “ceding company”
