Chapter 5 Vocab (Notes) Flashcards Preview

Risk and Insurance > Chapter 5 Vocab (Notes) > Flashcards

Flashcards in Chapter 5 Vocab (Notes) Deck (27):
1

Consolidation

means the number of firms has declined due to mergers and acquisitions

2

Convergence

means that financial institutions now sell a wide variety of financial products that earlier were outside their core business area

3

Stock Insurer

corporation owned by stockholders

4

Advanced Premium Mutual

owned by the policyowners, there are no stockholders, and the insurer does not issue accessible policies

5

Assessment Mutual

has the right to assess policyowners an additional amount if the insurer's financial operations are unfavorable

6

Fraternal Insurer

is a mutual insurer that provides life and health insurance to members of a social or religious organization

7

Demutualization

whereby a mutual company is converted into a stock insurer by a pure conversion, merger, or bulk reinsurnace

8

Holding Company

company that directly or indirectly controls an authorized insurer

9

Blue Cross Blue Shield Plans

generally organized as nonprofit, community oriented plans

10

Health Maintenance Organization (HMO)

provides a comprehensive health care to its members

11

Captive Insurer

an insurer owned by a parent firm for the purposes of insuring the parent firm's loss exposures

12

Savings Bank Life Insurance

refers to life insurance that is sold by mutual savings banks, over the phone, and through websites

13

Agent

someone who legally represents the principal and has the authority to act on the principal's behalf

14

Binder

provides temporary insurance until the policy is actuallly written

15

Broker

someone who legally represents the insured and solicits applications and attempts to place coverage with an appropriate insurer, is paid a commission from the insurer's where the business is placed, and does not have the authority to bind the insurer

16

Surplus Line Broker

licensed to place business with a nonadmitted insurer

17

Personal Selling Distribution Systems

commissioned agents solicit and sell life insurance products to prospective insureds

18

Career or Affiliated Agents

full time agents who usually represent one insurer and are paid on a commission basis

19

Multiple Line Exclusive Agency System

agents who sell primarily property and casualty insurance also sell individual life and health insurance products

20

Independent Property and Casualty Agents

independent contractors who represent several insurers and sell primarily property and casualty insurance

21

Personal Producing General Agent (PPGA)

an independent agent who places substantial amounts of business with one insurer and has special financial arrangement with that insurer

22

Brokers

independent agents who do not have an exclusive contract iwth any single insurer

23

Direct Response Ssytem

marketing system by which insurance products are sold directly to consumers without a face to face meeting with an agent

24

Independent Agency

business firm that usually represents several unrelated insurers

25

Exclusive Agency System

the agent represents only one insurer or group of insurers under common ownership

26

Direct Writer

an insurer in which the salesperson is an employee of the insurer, not an independent contractor

27

Direct Response

insurer sells directly to the consumer by television or some other media