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46 Cards in this Set
- Front
- Back
When a stock company turns into a mutual company
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Mutualization
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When a mutual company turns into a stock company
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Demutualization
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What is a risk transference?
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The act of shifting responsibility to another thru an insurance contract
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What is risk reduction?
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To lessen the chances of loss.. ex. to but anti-theft device for car
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What is risk retention?
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The insured retains part of the risk.. ex. auto insurance policy
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What is risk management?
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*To determine what exposures to loss exist *To determine the seriousness of exposures *To develop a way to minimize the effect of expos
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What is pure risk?
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Only a chance for loss.. only pure risk are insurable.
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What is speculative risk?
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Involve the chance of both loss and gain.
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What are morale hazards?
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Driving recklessly.. the chance of death or injury.
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What are physical hazards?
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Blindness and deafness.
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What are moral hazards?
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Alcoholism and drug addiction.
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What is a valued contract?
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Pays a stated sum regardless: of the actual loss.
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What is an Aleatory contract?
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Unequal value is given. Low premium and high benefits.
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What is an Indemnity contract?
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Contract that pays an amount to the loss.. to return to original financial position. ex. $100,000 policy with $5,000 actual loss the benefit paid is $5,000
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What does Florida law require to maintain a license?
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Continuing education requirements.Every 2 years... 24 hours. Every 6 years...20 hours.25+ ... 10
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Florida requires licensee to notify Department of change of address. When? If not, what?
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60 days.. can be fined up to $500.
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What are the possible consequences for acting as an agent without proper licensure?
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Charges of up to a first degree felony. Responsible for all unpaid claims.Suspension of license.
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What is sliding?
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When an agent tells a client that there will be no additional charges when there will be. Or charges for add. coverage in quiet
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What is Coercion, Boycott and Intimidation?
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Forcing somebody to do something against their will with the force of threats.
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What is Misrepresentation?
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To give an inaccurate or deliberately false account of the nature of somebody or something.
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What is Defamation?
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An attack on somebody's good name, character or reputation.
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What is Unfair Discrimination?
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Insurers are prohibited from showing any type of partiality to individuals in regard to their premiums and benefits.
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What is the Unfair Claims Settlement Practices Act?
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Laws passed by state Legislatures to regulate the behavior of Insurance companies with respect to the payment of claims.
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What is the Time Limit on Certain Defenses and how long?`
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States that the policy is incontestable after it has been in force for a period of time. Usually 2 years.
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What is a Grace Period? How long?
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A given # of days in which the premium is due yet stays in force. Weekly = 7 days Monthly = 10 days. All other is 31 days.
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What is Reinstatement? How long?
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Automatic after 45 days if the delinquent premium is accepted by the co. without a new application.
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What is Notice of Claim? How long?
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The policyowner's obligation to the insurer to provide notification of loss after 20 days of the occurence. or asap.
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What is Claim Forms?How long?
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The company's responsibility to supply a claim form to the insured within 15 days after receiving Notice of Claim.
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What is Proof of Loss?How long?
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After the company becomes liable for periodic payments, the claimant has 90 days to submit proof of loss.
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What is Time Payment of Claims? How long?
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Provides for immediate paymentof claims after the insurer receives notification on proof of loss within 45 days after first received.
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What is Legal Actions? How long?
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The insured cannot take legal action against the company in a claim dispute until after 60 days from the time the insured submits proof of loss. Within 5 yrs.
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What is Controlled Business?
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Taking out Life insurance or Annuity contracts covering the agent or family members.Limiting sales to specific groups.
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There are four entities that exercise regulatory authority over the insurance industry in Florida. What are they?
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The state legislature, the Department of Financial Services, The Office of Ins. Regulation and State court.
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What establishes and maintains the legal framework for state laws relating to insurance?
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The State Legislature.
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What oversees the insurance industry in the accordance with the provisions of the insurance code?
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The Department of Financial Services headed by the Cheif Financial Officer.
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What is the Cheif Financial Officer responsible for?
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(1) Regulation of insurance agents (2)insurance fraud (3) consumer protection
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How long must insurance agents keep records if it involves premium payments?
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For at least three years.
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The office can conduct a hearing anytime they have reason to believe that: What?
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Any person that is engaging in anything unfair, Without being properly licensed, or no interest of the public.
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What is an admitted insurance company?
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One that the Office of Insurance Regulation has licensed to transact ins. business in Fl. with state laws.
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What is a nonadmitted insurance company?
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It has not been licensed in or authorized to transact insurance business in Florida.
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What is a Certificate of Authority?
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Must obtain to operate as an insurer in the state.
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What is the State Court System?
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It identifies and makes legal determinations involving cases of conflict between ins. co. and policyowners and criminal penalties for violatiom.
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What are the possible consequences for Acting as an Insurer without proper licensure?
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First degree felony charges, Liability for all unpaid claims, and suspension of license.
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What is the Leeway or Basket Provision?
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The Insurance Code contains this provision which spells out the terms that allow domestic insurers the right to invest a certain % of total assets in loans or other.
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What is the Legal Reserve requirement?
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It is a certain amount of money that is set aside to fulfill future claims. It is as a liability on co.balance.
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What are unauthorized entities?
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Nonadmitted, meaning they have not been approved to sell insurance in the state.
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