Definitions
What does insurance do?
Transfers the risk
A business formed as a public or private corporation and owned by its stockholders, also known as shareholders.
Stock Insurer
A proposal made by one of the potential parties to the contract.
Offer
State where company is incorporated
Domestic Insurer
Not written but are the things agents normally do to sell insurance
Implied Authority
What is a peril?
A cause of loss
Mutual Insurer
A legal doctrine that prevents a party from denying an action if it had been accepted previously.
Estoppel
incorporated in any country other than USA
Alien Insurer
The insured and insurance company have a right to expect honesty from each other
Utmost Good Faith
Chance of loss or gain. Not insurable
Speculative Risk
Provides insurance and other benefits. Must be a member of the society to get the benefits.
Fraternal Insurer
Failure to disclose
Concealment
Insurance from the state or federal government
Residual Market
Authority that the agent's written contract with the company says
Express Authority
Chance of loss only. Insurance companies will insure.
Pure Risk
Unincorporated, members are assessed the amount they have to pay if a loss to any member of the group occurs, run by an attorney-in-fact.
Reciprocal Insurer
Pay for the loss but with no gain
Indemnity
Foreign Insurer
Intentional act to cheat another
Fraud
Larger the group; the more accurate losses can be predicted
Law of Large Numbers
A business that pays its own claims
Self-Insurance
Only 1 promise made. Insurance company promises to pay for a covered loss. Insured does not promise to pay the premium
Unilateral
Can only be sold to certain high risk insureds. Insurance sold by unauthorized/non-admitted insurers.
Surplus Lines
Things the agent does that a reasonable person would assume as authority, based on the agents' actions and statements
Apparent Authority