Chapter 6 - Insurance Company Operations Flashcards
Define Actuary
A person who determines rates and premiums.
Define Catastrophe Bond
Corporate bonds that permit the issuer o the bond to skip or defer scheduled payments of principal or interest if a catastrophic loss occurs.
Define Ceding Commission
A commission paid by the reinsurer to the primary insurer to help compensate for the expenses incurred of the writing of the business.
Define Ceding Company
Insurer that writes the policy initially and later transfers part or all of the coverage to a reinsurer.
Define Certified Financial Planner
Professional who has attained a high degree of technical competency in financial planning and has passed a series of professional examinations.
Define Certified Insurance Counselor (CIC)
Professional in property and casualty insurance who has passed a series of examinations sponsored by the Society of Certified Insurance Counselors.
Define Cession
The amount of insurance ceded to the insurer.
Define Chartered Financial Consultant (ChFC)
An individual who has attained a high degree of technical competency in the fields of financial planning, investments, and life and health insurance and has passed professional examinations administered by The American College.
Define Chartered Life Underwriter (CLU)
An individual who has attained a high degree of technical competency in the fields of life and health insurance and has passed professional examinations administered by The American College.
Define Chartered Property Casualty Underwriter (CPCU)
Professional who has attained a high degree of technical competency in property and liability insurance and has passed professional examinations administered by the Institutes (formerly known as the American Institute for Chartered Property Casualty Underwriters).
Define Claims Adjustor
Person who settles claims; an agent, company adjustor, independent adjustor, or public adjustor.
Define Company Adjustor
Claims adjustor who is a salaried employee representing only one company.
Define Excess-of-Loss Reinsurance
Designed largely for protection against a catastrophic loss.
-A treaty can be written to cover a single exposure, a single occurrence, or excess losses.
Define Facultative Reinsurance
Optional, case-by-case method of reinsurance used when the ceding company receives an application for insurance that exceeds its retention limit.
Define Independent Adjustor
Claims adjustor who offers his or her services to insurance companies and is compensated by a fee.
Define Information Systems
Use of computer technology in the processing and storage of information and elimination of many routine tasks.
Define Insurance Agent
Person who sells insurance and often has authority to settle small first-party claims up to some maximum limit.
Define Loss Control
Where losses are limited by things like sprinklers.
Define Medical Information Bureau Report
A report from the MIB Group about a person’s known health. Companies that belong to this this trade association (MIB Group) report any health impairments, which are recorded and made available to member companies.
Define Producers
Agents who sell insurance.
Define Production
The sales and marketing activities of insurers.
Define Public Adjustor
Claims adjustor who represents the insured rather than the insurance company is paid a fee based on the amount of the claim settlement. A public adjustor may be employed in those cases where the insured and insurer cannot resolve a dispute over a claim, or if the insured needs technical assistance in a complex loss situation.
Define Quota-share Treaty
Under this treaty, the ceding company and reinsurer agree to share premiums and losses based on some proportion.
Define Rate Making
The process by which insurance pricing or premiums are determined for an insurance company.
Define Reinsurance
An arrangement by which the primary insurer that initially writes the insurance transfers to another insurer (called reinsurer) part or all of the potential losses associated with such risk.
Define Reinsurance Pool
An organization of insurers that underwrites insurance on a joint basis.
