Insurance Regulation
Foreign
A chance of loss or no loss, but no chance of gain.
Pure Risk
Name the 2 Financial Statements Covered
Income Statement & Balance Sheet
Insurance for Insurance Companies
Reinsurance
Insurance agent's authority to effect coverage on behalf of the insurer
Binding Authority
The ability of an insurer to meet its financial obligations as they become due
Solvency
Number of losses that occur within a specified period.
Loss Frequency
SECURA's Profit Share is based on which ratio?
Operating Ratio
Where you would insure unusual exposures- such as Aaron Rodger's throwing arm!
Lloyds (Lloyd's of London)
Tendency for people with the greatest probability of loss to be the ones most likely to purchase insurance
Adverse Selection
Rating Law: Insurers must file proposed rates but can immediately use the rates while state approval is pending.
File-and-Use Law
A Risk Control technique that involves ceasing or never undertaking an activity so that the possibility of a future loss occurring from that activity is eliminated.
Avoidance
Loss Ratio + Expense Ratio
Combined Ratio
"Take it or leave it" policy characteristic
Hint: Contract of...
Adhesion
Rating used by underwriters to rate one-of-a-kind risks
Judgment Rating
Adequate, Not Excessive & ...
Not unfairly discriminatory
Retention, Noninsurance Transfer & Insurance are examples of this.
Risk Financing Technique.
Net Investment Income/ Earned Premium
Investment Income Ratio
A wrongful act or an omission, other than a crime or breach of contract, that invades a legally protected right.
Tort
The process by which an insurer can, after it has paid a loss under the policy, recover the amount paid from any party (other than the insured) who caused the loss or is otherwise legally liable for the loss.
Subrogation
Requiring the purchase of insurance to be dependent on some other purchase or financial arrangement
Tie-in Sale
The final step in the risk management process
Monitoring results & revisiting the risk management program.
To determine how successful underwriters have been selecting profitable new business we would look at which ratio?
Combined Ratio
Name 3 Intentional Torts
Assault, Battery, Defamation, Slander, Libel, False Arrest, Invasion of Privacy
Name 3 Alternative Dispute Resolution Options
Mediation, Arbitration, Appraisal, Mini-Trail, Summary Jury Trial