lOMoARcPSD|46354221
Life Insurance and Health Insurance Terms Glossary
Life Insurance (The Pennsylvania State University)
, lOMoARcPSD|46354221
Actuarial Department: This is the department that calculates policy rates, reserves,
and dividends.
Adjuster: This is the person who investigates claims and arranges for them to be
settled or denied.
Alien Insurer: In the United States, this is an insurer whose principal office and
domicile location is outside this country.
Admitted Insurer: This is an insurer who has received a certificate of authority from a
state’s department of insurance which authorizes them to conduct insurance business in
that state.
Agent: This is an individual or organization that’s authorized to solicit, sell, and transact
(bind) coverage for specific insurance providers under the terms of one or more agent
contracts.
Authorized Insurer: This is an admitted insurer.
Broker: This is a person who represents himself and the insured (i.e., the client or
customer). A broker cannot bind coverage on behalf of an insurance carrier because a
broker is not appointed as an agent.
Captive Insurer: This is an insurer that’s established and owned by a parent firm for
the purpose of insuring the parent firm’s loss exposure.
Certificate of Authority: This is a license that’s issued to an insurer by an insurance
department (or equivalent state agency) that authorizes that company to conduct
insurance business in that particular state.
Claims Department: This is the department that’s responsible for processing,
investigating, and paying claims.
Divisible Surplus: This is the amount of earnings that are paid to policy owners as
dividends after the insurance company sets aside funds required to cover reserves,
operating expenses, and general business purposes.
Domestic Insurer: This is an insurer with its principal or home office in the state in
which it’s authorized.
Foreign Insurer: This is an insurer whose principal office or domicile location is in a
state that’s different from the state in which it’s transacting insurance business.
, lOMoARcPSD|46354221
Fraternal Benefit Society: This is a non-profit benevolent organization that provides
insurance to its members.
Independent Insurance Agency: This is an agency that can represent any number of
insurance companies through contractual agreements. Unlike a captive agency, they
are not limited to one insurance company.
Insurance: This is the transfer of risk through the pooling or accumulation of funds.
Insured: This is the customer who receives insurance protection under an insurance
policy.
Insurer: This is an insurance company.
Lloyds of London: This is NOT an insurer but a group of individuals and companies
that underwrite unusual insurance policies.
Marketing Division: This is the division that’s responsible for acquiring prospective
applicants through various advertising media.
Monoline Insurer: This is an insurance carrier that only sells one line of insurance.
Multi-Line Insurer: This is an insurance company or independent agent that provides
a “one-stop-shop” for businesses or individuals who are seeking coverage for all of their
insurance needs. For example, many large insurers offer individual policies for
automobile, homeowner, long-term care, life, and health insurance needs.
Mutual Insurance Company: This is an insurance company that’s characterized by
having no capital stock, being owned by their policy owners, and typically issuing
participating insurance.
Non-Admitted (Unauthorized) Insurer: This is an insurer that has not received a
certificate of authority from a state’s department of insurance which authorizes it to
conduct insurance business in that state.
Nonparticipating Policy: This is a policy that’s typically issued by stock companies.
This type of policy doesn’t allow policy owners to participate in dividends or to elect the
board of directors.
Participating Policy: This is an insurance policy that pays policy dividends to policy
owners. By receiving dividends, policy owners share in the company’s divisible surplus
and also elect the company’s board of directors.
, lOMoARcPSD|46354221
Personal Producing General Agency (PPGA): This is an agency that represents one
or more specific insurers. A PPGA is a similar agency system, but PPGAs don’t recruit,
train, or supervise career agents.
Policy owner: This is the person who’s responsible for the payment of premiums and
who possesses all ownership rights of the contract. Typically, the policy owner is also
the insured.
Private (Commercial) Insurer: This is an insurer that’s owned by private citizens or
groups that offer one or more insurance lines. Commercial insurers are NOT
government-owned.
Producer: This is an individual who’s licensed by one or more states to sell, solicit, or
transact insurance in a given state.
Proposed Insured: This is the person whose life will be covered by an insurance
policy. (See also: Insured).
Public Adjuster: This person acts on behalf of a consumer who’s settling an insurance
claim.
Reciprocal Insurer: This is an unincorporated organization in which all members
insure one another. An attorney-in-fact manages it.
Reinsurance: This is the acceptance by one or more insurers (referred to as
reinsurers) of a portion of the risk being underwritten by another insurer that has
contracted with a consumer to cover the entire risk.
Reinsurer: This is a company that provides financial protection to insurance
companies. Reinsurers handle risks that are too large for insurance companies to cover
on their own and make it possible for insurers to obtain more business than they would
otherwise be able to obtain.
Risk Retention Group: This is a group-owned liability insurer that assumes and
spreads product liability and other forms of commercial liability risks among its
members.
Sales Department: This department acquires clients through one-on-one meetings in
which consumers complete applications.
Self-Insurer: This is a company that establishes a self-funded plan to cover potential
losses rather than transferring the risk to an insurance company.
Life Insurance and Health Insurance Terms Glossary
Life Insurance (The Pennsylvania State University)
, lOMoARcPSD|46354221
Actuarial Department: This is the department that calculates policy rates, reserves,
and dividends.
Adjuster: This is the person who investigates claims and arranges for them to be
settled or denied.
Alien Insurer: In the United States, this is an insurer whose principal office and
domicile location is outside this country.
Admitted Insurer: This is an insurer who has received a certificate of authority from a
state’s department of insurance which authorizes them to conduct insurance business in
that state.
Agent: This is an individual or organization that’s authorized to solicit, sell, and transact
(bind) coverage for specific insurance providers under the terms of one or more agent
contracts.
Authorized Insurer: This is an admitted insurer.
Broker: This is a person who represents himself and the insured (i.e., the client or
customer). A broker cannot bind coverage on behalf of an insurance carrier because a
broker is not appointed as an agent.
Captive Insurer: This is an insurer that’s established and owned by a parent firm for
the purpose of insuring the parent firm’s loss exposure.
Certificate of Authority: This is a license that’s issued to an insurer by an insurance
department (or equivalent state agency) that authorizes that company to conduct
insurance business in that particular state.
Claims Department: This is the department that’s responsible for processing,
investigating, and paying claims.
Divisible Surplus: This is the amount of earnings that are paid to policy owners as
dividends after the insurance company sets aside funds required to cover reserves,
operating expenses, and general business purposes.
Domestic Insurer: This is an insurer with its principal or home office in the state in
which it’s authorized.
Foreign Insurer: This is an insurer whose principal office or domicile location is in a
state that’s different from the state in which it’s transacting insurance business.
, lOMoARcPSD|46354221
Fraternal Benefit Society: This is a non-profit benevolent organization that provides
insurance to its members.
Independent Insurance Agency: This is an agency that can represent any number of
insurance companies through contractual agreements. Unlike a captive agency, they
are not limited to one insurance company.
Insurance: This is the transfer of risk through the pooling or accumulation of funds.
Insured: This is the customer who receives insurance protection under an insurance
policy.
Insurer: This is an insurance company.
Lloyds of London: This is NOT an insurer but a group of individuals and companies
that underwrite unusual insurance policies.
Marketing Division: This is the division that’s responsible for acquiring prospective
applicants through various advertising media.
Monoline Insurer: This is an insurance carrier that only sells one line of insurance.
Multi-Line Insurer: This is an insurance company or independent agent that provides
a “one-stop-shop” for businesses or individuals who are seeking coverage for all of their
insurance needs. For example, many large insurers offer individual policies for
automobile, homeowner, long-term care, life, and health insurance needs.
Mutual Insurance Company: This is an insurance company that’s characterized by
having no capital stock, being owned by their policy owners, and typically issuing
participating insurance.
Non-Admitted (Unauthorized) Insurer: This is an insurer that has not received a
certificate of authority from a state’s department of insurance which authorizes it to
conduct insurance business in that state.
Nonparticipating Policy: This is a policy that’s typically issued by stock companies.
This type of policy doesn’t allow policy owners to participate in dividends or to elect the
board of directors.
Participating Policy: This is an insurance policy that pays policy dividends to policy
owners. By receiving dividends, policy owners share in the company’s divisible surplus
and also elect the company’s board of directors.
, lOMoARcPSD|46354221
Personal Producing General Agency (PPGA): This is an agency that represents one
or more specific insurers. A PPGA is a similar agency system, but PPGAs don’t recruit,
train, or supervise career agents.
Policy owner: This is the person who’s responsible for the payment of premiums and
who possesses all ownership rights of the contract. Typically, the policy owner is also
the insured.
Private (Commercial) Insurer: This is an insurer that’s owned by private citizens or
groups that offer one or more insurance lines. Commercial insurers are NOT
government-owned.
Producer: This is an individual who’s licensed by one or more states to sell, solicit, or
transact insurance in a given state.
Proposed Insured: This is the person whose life will be covered by an insurance
policy. (See also: Insured).
Public Adjuster: This person acts on behalf of a consumer who’s settling an insurance
claim.
Reciprocal Insurer: This is an unincorporated organization in which all members
insure one another. An attorney-in-fact manages it.
Reinsurance: This is the acceptance by one or more insurers (referred to as
reinsurers) of a portion of the risk being underwritten by another insurer that has
contracted with a consumer to cover the entire risk.
Reinsurer: This is a company that provides financial protection to insurance
companies. Reinsurers handle risks that are too large for insurance companies to cover
on their own and make it possible for insurers to obtain more business than they would
otherwise be able to obtain.
Risk Retention Group: This is a group-owned liability insurer that assumes and
spreads product liability and other forms of commercial liability risks among its
members.
Sales Department: This department acquires clients through one-on-one meetings in
which consumers complete applications.
Self-Insurer: This is a company that establishes a self-funded plan to cover potential
losses rather than transferring the risk to an insurance company.
