Key Terms
What is a policy?
Protects individuals and their families against financial losses arising from unexpected events impacting their personal assets.
What are PERSONAL lines?
The insurance of insurance companies.
What is REINSURANCE?
Price for risk, identify ways to limit exposures, restrict types of business, and use reinsurers when applicable.
What is Risk Management?
Risk management is the process of making and implementing decisions that will minimize the effects of losses.
What is BCRM (Best's Credit Rating Methodology)?
The amount paid by the policyholder for insurance coverage is known as this.
What is a premium?
Provides financial security for loved ones after a death.
What is LIFE insurance?
A legal responsibility for the financial cost of another person's losses?
What is LIABILITY?
Information Gathering, Risk Assessment, Decision Making, and Premium Setting
What are steps in the Underwriting Process?
Non-governmental organization that supports state insurance regulators in the U.S. by helping to coordinate regulator efforts, manage financial filings, and develop consistant standards for the insurance industry.
What is NAIC (National Association of Insurance Commissioners)?
This term describes the exposure to potential danger, harm, or loss.
What is risk?
Safeguards businesses and their assets from risks associated with business operations.
What are COMMERCIAL lines?
A strategy where an insurer collects premiums from a large number of people to cover the potential losses of a few.
What is Spread of Risk?
Insurance salesperson who searches the marketplace in the interest of clients, not insurance companies.
What is a Broker?
What is P&C (Property and Casualty)?
This individual or firm acquires and seeks protection from risk through an insurance policy.
What is a Policyholder?
Ensures access to medical care and manages associated costs during your lifetime.
What is HEALTH insurance?
Insurance companies offer policies to many different policyholders across various geographic locations.
What is Geographic Diversification?
The difference between what an insurer pays out in claims and expenses and the premiums collected.
What is Underwriting Profit?
Internal body responsible for establishment, maintenance, appropriateness, and documentation of policies, procedures, and methodologies pertaining to the production of ratings and other assessments or evaluations.
What is CRPC (Credit Rating Policy Committee)?
Insurance provision that requires the insured to pay an amount of the loss before the insurer is required to pay.
What is a deductible?
Provides broad coverage for cargo, ships, and other property during transit on water, land, or air.
What is MARINE Insurance?
A large group of people or entities contribute funds to a collective pot so the funds available to pay claims increases, and the chances of a single claim exhausting the available funds gets smaller.
What is Risk Pooling?
(Law of Large Numbers)
A group which writes commercial general liability and products liability insurance for entities who have difficulty obtaining insurance.
What is a Risk Retention Group?
A specialized type of insurance agent or broker who has been granted underwriting authority by an insurer.
What is MGA (Managing General Agent)?