Types of Insurance Companies (Chapter 1) Flashcards Preview

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Flashcards in Types of Insurance Companies (Chapter 1) Deck (16)
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1
Q

Commercial Insurers (Private Insurance Companies)

A

Sell insurance for profit

Divided into two main groups, Mutual and Stock insurers

2
Q

Multi-line Insurer

A

Company that sells more than one line of insurance

3
Q

Stock Companies

A

Make profits for Stockholders/Shareholders
Are subject to taxation
Are Nonparticipating

4
Q

Mutual Companies

A

Owned by policy holders
Are not subject to taxation
Are Participating

5
Q

Mixed Insurer

A

Companies that are both participating and non participating

6
Q

Difference between Mutualization and Demutualization

A

From stock to Mutual = Mutualization

From Mutual to stock = Demutualization

7
Q

Strong Assessment Mutual Companies

List 2, explain

A
  1. Pure assessment Mutual Company - No premium in advance

2. Advance Premium assessment Mutual - Premiums are charged at the beginning

8
Q

Fraternal Benefit Societies

A

Non-profit, religious, ethnic, or Charitable organizations that provide insurance soley to their members.

9
Q

Risk Retention Groups

A

Companies formed by a group of people in the same profession/industry

10
Q

Service Providers

A

Offer benefits to SUBSCRIBERS. example: PPO & HMO

11
Q

Reciprocal Insurers

A

Individual members that provide insurance for other members through indemnity contracts

12
Q

Reinsurers

A

Assumes the risk from another insurer

13
Q

Ceding company

A

The company transferring risk to another company

14
Q

Captive insurer

A

Owned by a parent company to insure the parent company’s loss

15
Q

Home Service Insurer or Industrial Insurance

A

Sold by home service or debit life ins. companies, face amounts are small

16
Q

Self-insurers

A

Establish their own self funded plan to cover potential loss.
Example: Employer who pays insurance benefits from a fund derived from employer’s current revenue