1 • BASIC PRINCIPLES OF INSURANCE
KEYWORDS QUESTIONS AND
VERIFIED ANSWERS|100%
CORRECT|GRADE A+
Actuarial Department - ANSWER Calculates policy rates, reserves, and dividends
Alien Insurer - ANSWER An insurer whose principal office and domicile location is outside this country
Admitted Insurer - ANSWER (Also called authorized insurer) is an insurer who has received a certificate
of authority from a states department of insurance authorizing them to conduct insurance business in
that state
Broker - ANSWER Represents themselves and the insured
captive insurer - ANSWER Issuer established and owned by a parent firm for the purpose of insuring the
parent firm's loss exposure
Certificate of authority - ANSWER A license issued to an insurer by a Department of insurance (or
equivalent state agency) which authorizes that company to conduct insurance business in that particular
state
Claims Department - ANSWER Responsible for processing, investigating, and paying claims
Divisible surplus - ANSWER The amount of earnings paid to policy owners as dividends after the
insurance company set aside funds required to cover reserves, operating expenses, and general business
purposes
Domestic insurer - ANSWER An insurer with its principal or home office in a state where it is authorized
Foreign insurer - ANSWER An insurer with its principal office or domicile location in a state different from
the state it is transacting insurance business
KEYWORDS QUESTIONS AND
VERIFIED ANSWERS|100%
CORRECT|GRADE A+
Actuarial Department - ANSWER Calculates policy rates, reserves, and dividends
Alien Insurer - ANSWER An insurer whose principal office and domicile location is outside this country
Admitted Insurer - ANSWER (Also called authorized insurer) is an insurer who has received a certificate
of authority from a states department of insurance authorizing them to conduct insurance business in
that state
Broker - ANSWER Represents themselves and the insured
captive insurer - ANSWER Issuer established and owned by a parent firm for the purpose of insuring the
parent firm's loss exposure
Certificate of authority - ANSWER A license issued to an insurer by a Department of insurance (or
equivalent state agency) which authorizes that company to conduct insurance business in that particular
state
Claims Department - ANSWER Responsible for processing, investigating, and paying claims
Divisible surplus - ANSWER The amount of earnings paid to policy owners as dividends after the
insurance company set aside funds required to cover reserves, operating expenses, and general business
purposes
Domestic insurer - ANSWER An insurer with its principal or home office in a state where it is authorized
Foreign insurer - ANSWER An insurer with its principal office or domicile location in a state different from
the state it is transacting insurance business
