Unit 1 Definitions

Definition: State license for an insurance company.

• Admitted
• A certificate of Authority
• Surplus Lines
• Non-admitted

Definition: risk that has a greater than average chance of loss.

• CANHAM
• Adverse Selection
• Reciprocal
• Residual

Which of these is not a method for handling risk

• Sharing
• Reduction
• Avoidance
• Toggling

Definition: Larger the group, the more accurate losses can be predicted.

• Exposure
• Law of Large Numbers
• Policy
• Hazard

All of the following are true about Mutual insurers except:

• Owned by policy holders
• Issues Participating Policies
• If profitable, can return excess premium to its policyholders with a taxable dividend.

Definition: Transfer of risk.

• Exposure
• Insurance
• Peril
• Hazard

Admitted companies have what type of license in the state they are doing business?

• Certificate of Authority

• Managing agent

• Surplus license

• reinsurance authority

SafeGARD insurance is headquartered in Calgary, Canada. It sells policies primarily in Detroit, MI. SafeGARD insurance is a _____insurer

• Alien
• Foreign
• Domestic
• World

Definition: Failure to disclose known facts

• Fraud
• Waiver
• Estoppel
• Concealment

A person in a position of financial responsibility

• a comingler

• a fiduciary

• an actuary

• an underwriter