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Health insurance > Insurance > Flashcards

Insurance Flashcards

(56 cards)

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1
Q

Insurance

A

transfer of risk.

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2
Q

Risk

A

uncertainty / possibility of a loss

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3
Q

What are types of risk

A

Speculative Risk and Pure Risk

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4
Q

Speculative risk

A

chance of loss or gain. Not insurable

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5
Q

Pure risk

A

chance of loss only. Insurance companies will insure.

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6
Q

Exposure

A

Risk for which the insurance company would be liable.

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7
Q

Peril

A

Cause of loss

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8
Q

Hazard

A

Something that causes an increase in the chance of loss

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9
Q

Physical Hazard

A

the hazard that can be seen

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10
Q

Moral hazard

A

a belief that intentionally causing a loss is acceptable

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11
Q

Morale Hazard

A

Carelessness

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12
Q

Starr

A

Methods of handing risk

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13
Q

What are Starr terms

A

Sharing, Transfer, Avoidance, Retention and Reduction

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14
Q

Insurance

A

Risk Transfer

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15
Q

Contract

A

(policy) an agreement between the insured and the insurer

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16
Q

1st party

A

Insured (customer)

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17
Q

2nd party

A

Insurer (the insurance company)

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18
Q

Law of large numbers

A

Larger the group, the more accurate losses can be predicted

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19
Q

Canham Risks

A

That can be insured have the following characteristics

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20
Q

Canham risks

A

Calculable, Affordable, Non-catastrophic, Homogeneous, Accidental and Measurable

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21
Q

Adverse selection

A

Risk that have a greater then average chance of loss

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22
Q

Reinsurance

A

An insurance company (the ceding company) paying another insurance company (re insurer) to take some of the companies risk of catastrophic loss

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23
Q

Stock insurer

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A

pubically owned by stockholders/shareholders If the company makes money, a taxable dividend from the profits may be paid to the stockholders/shareholders. issue non-par policies

24
Q

Mutual insurer

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A

Owned by policy holders (customers) if the company is proitable. can return excess premium to its policyholders. nontaxable dividend. issue participating polcies

25
Fraternal Insurer
Provides insurance and other benefits, must be a member of the society to get the benefits.
26
Reciprocal insurer
Unincorporated, members are assessed the amount they have to pay if a loss to any of the member of the group occurs. Run by attorney in fact.
27
Lloyd's association
Insurance provided by underwriters not companies
28
Risk retention group
Liability insurance company created for and owned by policyholders from the same industry
29
Risk purchasing group
a group of businesses from the same industry joining together to buy liability insurance from an insurance company
30
Self insurance
a business that pays its own claims
31
Residual market
insurance from the state or federal government
32
Insurance company locations
Domestic =state where company is incorporated Foreign =any state or Us territory other then the state where incorporated alien =incorporated in any country other then the USA
33
Certificate of authority
state license for an insurance company
34
Admitted or authorized
state requires the insurance company to have a certificate of authority
35
Non-admitted
unauthorized insurance company not required to have a certificate of authority from the state
36
Surplus lines
insurance sold by unauthorized/non-admitted insurers, if the state approved list of surplus insurers. Can only be sold to certain high risk insureds. Cannot be sold just for a cheaper rate then licensed/admitted insurers.
37
Financial strength rating
a report card of the company
38
Methods of marketing
independent, exclusive or captive. general agents or managing general agents, direct writing companies and direct response no agent/producer involved
39
Agency
The insurance agent acts on behalf of the principal (insurance company)
40
Agent authority
Express =What the agents written contract with the company says Implied =not written but are things agents normally do to sell insurance Apparent =Things the agent does that a reasonable person would assume as authority, based on the agents actions and statements
41
Fiduciary trust
Promptly sends premiums to insurer, knowledge of products, comply with laws and regulations and no commingling
42
Legal contract (CLOAC)
Consideration giving something of value, insured gives information and money (premium) to the insurance company. insurance company gives a promise to pay(policy) to the insured ■ Legal purpose—risk transfer doesn’t violate the law ■ Offer (made by insured) –– Insured submits application and first month’s premium to insurer –– Counteroffer (made by insurer) ■ Agrees to issue policy but with higher premium or restrictions/exclusions ■ Insured either accepts the conditions or withdraws her application ■ Acceptance—insurer accepts risk as presented ■ Competent parties—insured age 18 and sane
43
Adhesion
Policy written by insurance company ■ If ambiguous(not clear)—court will take the side of the insured
44
Aleatory
not equal value small premium for a large amount of coverage
45
Upmost good faith
the insured and insurance company have a right to expect honestly from each other
46
Unilateral
Only one promise made, insurance company promises to pay for covered loss insured does not promise to pay premium
47
Personal
Contract between the insurance company and the insured, cannot be changed to someone else
48
Conditional
Insured must pay the premium for coverage and file a claim if a loss occurs
49
Indemnity
pay for the loss but with no gain
50
Representation
Believed to be true Misrepresentation—information given that is not true—however, the correct information would not affect the insurance companies decision – insured mistakenly gives one number of their address wrong—doesn’t void coverage ■ Material misrepresentation— information give that is not true—this information DOES affect the insurers decision—insured has a conviction for driving while intoxicated—could void coverage
51
Warranty
A promise Always made by the insurance company—if promise to pay is broken—company could be sued by the insured. ■ May be made by the insured—if promise is broken—insured may have no coverage ■ Guaranteed to be true
52
Concealment
Failure to disclose If intentional, and the information is material (important)—coverage could be voided ■ If NOT intentional—coverage cannot be voided
53
Fraud
intentional act to cheat another
54
Waiver
voluntarily giving up a right
55
Estoppel
Actions reasonably relied on by one party can't be denied by the party that accepted same previously
56
Fraud and false statements
Fine and or imprisonment (10-15 years) Embezzlement included

Health insurance (13 decks)

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