Ohio Personal Lines (Insurance Exam)

Stock Insurance Company - Answer- Issues non-participating policies and is owned by stockholders who received taxable corporate dividends as a return profit Reinsurance - Answer- The transfer of risk between insurance companies. The reinsurer assumes some or all of the risks of the ceding, or primary, insurance company Domestic - Answer- Insurer organized under the laws of the resident state Foreign - Answer- Insurer organized under the laws of another state within the United States Alien - Answer- Insurer oganized under the laws of a country outside of the United States Domicile - Answer- Refers to the state in which an insurer is incorporated Express - Answer- Authority that is written into the producers agency contract Implied - Answer- Authority that in which the public and the insurer assumes the agent possesses Apparent - Answer- Authority created when the agent exceeds express authority and the insurer does not respond FCRA - Answer- Protects consumer privacy by ensuring that any data collected by an insurer remains confidential, and is accurate, relevant, and used for a proper and specific purpose Risk - Answer- The uncertainty of a loss Peril - Answer- The cause of a loss Hazard - Answer- Increases the possibility of a loss Indemnity - Answer- Does not allow the insured to profit from a loss; instead, it restores the insured to the same financial or economic condition the existed prior to loss Adhesion - Answer- One party (the insurer) prepares the contract and presents it to the second party (the insured), who must accept it on a "take-it-or-leave-it" basis Types Of Insurers - Answer- Stock Insurers, Mutual Insurers, Reciprocal Insurers, and Self-Insurer Reduction - Answer- Minimizing the chance of a loss without eliminating the risk altogether