insurer correct answers entity that facilitates the pooling of funds and payment of benefits
Legal form of ownership
Place of incorporation
licensing status
insurance distribution systems and channels correct answers Property casualty insurers classified in 4 ways:
proprietary cooperative ...
RMI 310 Chapter 1 || with 100% Correct Answers.
insurer correct answers entity that facilitates the pooling of funds and payment of benefits
Legal form of ownership
Place of incorporation
licensing status
insurance distribution systems and channels correct answers Property casualty insurers classified
in 4 ways:
proprietary cooperative correct answers The two major types of insurers in the classification of
legal form of ownership are _________ and _______
proprietary insurers correct answers include stock insurers, Lloyd's of London and American
Lloyds, and insurance exchanges. It is an insurer formed for the purpose of earning a profit for
its owners
cooperative insurers correct answers this type of insurer is owned by its policyholders and is
usually formed to provide insurance protection to its policyholders at minimum cost. It includes
mutual insurers, reciprocal insurance exchanges, and fraternal organizations
mutual insurer correct answers an insurer that is owned by its policyholders and formed as a
corporation for the purpose of providing insurance to them
reciprocal insurance exchange correct answers an insurer owned by its policyholders, formed as
an unincorporated association for the purpose of providing insurance coverage to its members,
and managed by an attorney-in-fact. Members agree to mutually insure each other, and they
share profits and losses in the same proportion as the amount of insurance purchased from the
exchange by that member
pool correct answers consists of several insurers, not otherwise related, that join together to
insure loss exposures that individual insurers are unwilling to insure
fair access to insurance requirements plans correct answers an insurance pool through which
private insurers collectively address an unmet need for property insurance on urban properties,
especially those susceptible to loss by riot or civil commotion
residual market correct answers the term referring collectively to insurers and other organizations
that make insurance available through a shared risk mechanism to those who cannot obtain
coverage in the admitted market
domestic insurer correct answers an insurer that is incorporated within a specific state or, it not
incorporated, is formed under the laws of that state
foreign insurer correct answers a domestic insurer that is licensed to do business in states other
than its domiciled state
, alien insurer correct answers insurer that is incorporated or formed in another country
surplus lines broker correct answers a person or firm that places business with insurers not
licensed in the state in which the transaction occurs but that is permitted to write insurance
because coverage is not available through standard market insurers
independent agency and brokerage marketing system correct answers an insurance marketing
system under which producers who are independent contractors, sell insurance, usually as
representatives of several unrelated insurers
direct writer marketing system correct answers an insurance marketing system that uses sales
agents who are direct employees of the insurer
exclusive agency marketing system correct answers an insurance marketing system under which
agents contract to sell insurance exclusively for one insurer
distribution channel correct answers the channel used by the producer of a product or service to
transfer that product or service the ultimate customer
Earn Profit
Meet Customer needs
Comply with legal requirements
Diversify Risk
Fulfill their duty to society correct answers Five major insurer goals
probable maximum loss correct answers the larges loss that an insured is likely to sustain
hard cycle correct answers cycle characterized by periods of decreased competition and rising
rates leading to increased profitability and high rates of return
soft cycle correct answers cycle when prices moderate or decline as competition increases and
profitability diminishes
underwriting correct answers the process of selecting insureds, pricing coverage, determining
insurance policy terms and conditions, and then monitoring the underwriting decisions made
book of business correct answers a group of policies with a common characteristic, such as
territory or type of coverage, or all policies written by a particular insurer or agency
underwriting guidelines correct answers a written manual that communicates an insurer's
underwriting policy and that specifies the attributes of an account that an insurer is willing to
insure
adverse selection correct answers in general, the tendency for people with the greatest probability
of loss to be the ones most likely to purchase insurance
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