Chapter 3 Flashcards
Domestic Insurer
An insurer incorporated in the state where it does business
Foreign Insurer
An insurer that writes business in a state but is incorporated in another state
Alien Insurer
An insurer that is formed in a country other that the United States but that writes business in the United States
Nonadmitted Insurer
An insurer that does not have a license to conduct insurance business in a particular state. Nonadmitted insurers typically provide surplus lines of insurance
Stock Insurance Company
An insurance company owned by stockholders
Mutual Insurance Company
A not-for-profit insurance company owned by its policyowners, who elect its board of directors.
Advance-Premium Mutual
A mutual insurance company that establishes the full premium for coverage at the start of the policy period
Assessment Mutual
A mutual insurance company that reserves the right to levy assessments on its policyowners to cover adverse underwriting experience
Demutualization
The process of converting a mutual insurance company into a stock company
Mutual Holding Company
A holding company controlled by policyowners that owns a controlling interest in a new stock insurance company that takes over a mutual insurer’s business
Fraternal Insurer
A not-for-profit insuring organization that writes mainly life insurance on members of frateral society
Reciprocal Exchange
A type of insurer organized as an unincorporated pool of funds owned by policyowners and managed by an attorney-in-fact. The insured/insurer relationship is governed by a Subscribers Agreement or Power of Attorney in which policyholders assume liability as individuals and grant the attorney-in-fact the right to manage, for a fee, as an insurer, the funds contributed by policyholders and others to the unincorporated association
Blue Cross & Blue Shield Plans
Organizations formed for the purpose of prepaying subscribers’ medical care expenses. Blue Cross plans provide coverage primarily for hospital expenses, and Blue Shield plans provide coverage primarily for physicians’ services.
Lloyd’s Association
An association of individual insurers in which insurance is underwritten by its members rather than by the association itself
Agent
A legal representative of an insurance company with authority to act on behalf of the insurer
