FIN 341 LIEBENBERG TEST 2 QUESTIONS
more concentrated than the aggregate national property casualty insurance market -
Answers -the property-casualty insurance market in Mississippi is
stock insurers - Answers -a corporation owned by stockholders; objective is to earn
profit for stockholders by increasing the value of stock and paying dividends
mutual insurer - Answers -a corporation owned by the policy owners
demutualization - Answers -whereby a mutual company is converted into a stock
insurer
holding company - Answers -a company that directly or indirectly controls an authorized
insurer
pure conversion - Answers -mutual company amends its articles of incorporation to
reorganize as a stock company
merger - Answers -mutual company and stock company (organized or acquired by the
mutual company) join together into a single company; the stock company is the survivor
bulk reinsurance - Answers -cedes all of its insurance business and transfers all of its
assets and liabilities to a stock company; the mutual company is then dissolved
access equity capital and improve efficiency - Answers -mutual insurers demutualize in
order to
lloyd's of london - Answers -not an insurer, but a society of members who underwrite
insurance in syndicates
reciprocal exchange - Answers -an unincorporated organization in which insurance is
exchanged among the members (called subscribers)
captive insurer - Answers -an insurer owned by a parent firm for the purposes of
insuring the parent firm's loss exposures
agent - Answers -someone who legally represents the principal and has the authority to
act on the principal's behalf
binder - Answers -provides temporary insurance until the policy is actually written
broker - Answers -someone who legally represents the insured and: solicits
applications and attempts to place coverage with an appropriate insurer, is paid a
, commission from the insurers where the business is placed, and doesn't have the
authority to bind the insurer
surplus lines broker/wholesale broker - Answers -licensed to place business with a non-
admitted insurer
surplus lines - Answers -refer to any type of insurance for which there is no available
market within the state and coverage must be placed with a non-admitted insurer
a retail agent/broker and an insurance company - Answers -a wholesale broker is an
intermediary between
personal selling distribution system - Answers -the majority of life insurance policies
and annuities sold today are through
career/affiliated agents - Answers -full-time agents who usually represent one insurer
and are paid on a commission basis
multiple line agency system - Answers -agents who sell primarily property and casualty
insurance also sell individual life and health insurance products
independent agency - Answers -a business firm that usually represents several
unrelated insurers
exclusive agency system/captive agency system - Answers -the agent represents only
one insurer/group of insurers under common ownership
direct writer - Answers -an insurer in which the salesperson is an employee of the
insurer, not an independent contractor
direct response - Answers -insurer sells directly to the consumer by television or some
other media
multiple distribution systems - Answers -many property and casualty insurers use
production - Answers -refers to the sales and marketing activities of insurers
producers - Answers -agents are often referred to as
underwriting - Answers -refers to the process of selecting, classifying, and pricing
applicants for insurance
statement of underwriting policy - Answers -establishes policies that are consistent with
the companies objectives
more concentrated than the aggregate national property casualty insurance market -
Answers -the property-casualty insurance market in Mississippi is
stock insurers - Answers -a corporation owned by stockholders; objective is to earn
profit for stockholders by increasing the value of stock and paying dividends
mutual insurer - Answers -a corporation owned by the policy owners
demutualization - Answers -whereby a mutual company is converted into a stock
insurer
holding company - Answers -a company that directly or indirectly controls an authorized
insurer
pure conversion - Answers -mutual company amends its articles of incorporation to
reorganize as a stock company
merger - Answers -mutual company and stock company (organized or acquired by the
mutual company) join together into a single company; the stock company is the survivor
bulk reinsurance - Answers -cedes all of its insurance business and transfers all of its
assets and liabilities to a stock company; the mutual company is then dissolved
access equity capital and improve efficiency - Answers -mutual insurers demutualize in
order to
lloyd's of london - Answers -not an insurer, but a society of members who underwrite
insurance in syndicates
reciprocal exchange - Answers -an unincorporated organization in which insurance is
exchanged among the members (called subscribers)
captive insurer - Answers -an insurer owned by a parent firm for the purposes of
insuring the parent firm's loss exposures
agent - Answers -someone who legally represents the principal and has the authority to
act on the principal's behalf
binder - Answers -provides temporary insurance until the policy is actually written
broker - Answers -someone who legally represents the insured and: solicits
applications and attempts to place coverage with an appropriate insurer, is paid a
, commission from the insurers where the business is placed, and doesn't have the
authority to bind the insurer
surplus lines broker/wholesale broker - Answers -licensed to place business with a non-
admitted insurer
surplus lines - Answers -refer to any type of insurance for which there is no available
market within the state and coverage must be placed with a non-admitted insurer
a retail agent/broker and an insurance company - Answers -a wholesale broker is an
intermediary between
personal selling distribution system - Answers -the majority of life insurance policies
and annuities sold today are through
career/affiliated agents - Answers -full-time agents who usually represent one insurer
and are paid on a commission basis
multiple line agency system - Answers -agents who sell primarily property and casualty
insurance also sell individual life and health insurance products
independent agency - Answers -a business firm that usually represents several
unrelated insurers
exclusive agency system/captive agency system - Answers -the agent represents only
one insurer/group of insurers under common ownership
direct writer - Answers -an insurer in which the salesperson is an employee of the
insurer, not an independent contractor
direct response - Answers -insurer sells directly to the consumer by television or some
other media
multiple distribution systems - Answers -many property and casualty insurers use
production - Answers -refers to the sales and marketing activities of insurers
producers - Answers -agents are often referred to as
underwriting - Answers -refers to the process of selecting, classifying, and pricing
applicants for insurance
statement of underwriting policy - Answers -establishes policies that are consistent with
the companies objectives
