Michigan Property & Casualty Exam Latest Update with Verified Solutions

Michigan Property & Casualty Exam Latest Update with Verified Solutions FIO (Federal Insurance Office) Monitors insurance industry and identifies issues and gaps in the state regulation of insurers. It also monitors access to affordable insurance by underserved communities and consumers. Insurance Regulation at State Level Insurance industry is regulated primarily at the state level. Legislature writes and passes laws, judicial branch interprets them. Surplus and Excess Insurance Insurance available when coverage cannot be obtained from admitted insurers. Cannot be solely utilized to receive lower cost coverage than would be available from an admitted carrier. Private vs Government Insurers Most insurance is written through private insurers, however there are instances where government provides an alternative, usually when there is a lot of risk involved and private insurers have no means to insure. (Gulf Coast) Residual Markets A private coverage source of last resort for businesses and individuals who have been rejected by voluntary market insurers. Insurance Agents/Producers Licensed individuals representing an insurance company when transacting insurance. Reinsurance Companies Insurance company that assumes all or a portion of a risk from a primary or ceding insurance company. Treaty Agreements Reinsurance agreement that covers all risks contained in the subject line(s) of business automatically. Insurers Manufacture and sell insurance coverage by way of insurance policies or contracts. Facultative Agreements Reinsurance agreements that allow ceding and reinsurance companies the opportunity to negotiate coverage for individual risks. Financial Rating Services Independent financial rating services evaluate and rate the financial stability of insurance companies. Assign ratings to show financial strength/weakness. Insurance Agency Independent organizations that recruit, contract with, and support sales agents and producers. Self Insurer Assume the financial risk of one's self. generally on an option for large companies. Insurance Regulation at the Federal Level Federal government cannot regulate insurance in areas over which states have authority. Government is last resort. The Insured Person or entity that buys insurance