Insurance Knowledge Aptitude Test (IKAT)

The ability of an insurer to meet its financial obligations as they become due, even those resulting from insured losses that may be claimed several years in the future.

A contract in which the insurer agrees, in the event of a covered loss, to pay an amount directly related to the amount of the loss.

Insurance that protects a n insured's assets by covering the cost of repairing or replacing property that is damaged, lost, or destroyed. If net income is lost or extra expenses are incurred because of a loss, those may be covered, too.

Any contract in which one party must accept a pre-written agreement, often written by the other party.

Sets of data that are too large to be gathered and analyzed by traditional methods.

A contract between the insurer and the insured where the insured transfers the possible costs of covered losses to the insurer. In return for the premiums paid by insureds, insurers promise to pay for the losses covered by the insurance policy, which reduces the uncertainty or insecurity an insured may have about paying for potential losses.

An insurer that is owned by its stockholders and formed as a corporation for the purpose of earning a profit for the stockholders.

Insurance that provides for payment on behalf of the insured for injury to others or damage to others' property for which the insured is legally responsible. It also covers the cost to defend the insured, up to the policy limit, against claims or suits alleging that the insured is legally responsible for injury or damage that the policy covers.

A network of objects that transmit data to and from each other without human interaction.

One of the two main sectors of the insurance industry, encompassing numerous types of insurance, most of which cover the financial consequences of damage to one's own property or legal liability to others.

Insurance that replaces the income-earning potential lost through death. It also helps to pay expenses related to an insured's death.

A business that primarily focuses on covering the loss exposures of its parent or members.

An insurer that is owned by its policyholders and formed as a corporation for the purpose of providing insurance to them.

The process of selecting insureds, pricing coverage, determining insurance policy terms and conditions, and then monitoring the underwriting decisions made.

A systematic, iterative plan to analyze and improve business processes through life-cycle phases to achieve long-term goals and client satisfaction.

An insurer licensed to operate in a state but incorporated in another state.

An insurance policy that covers an individual or a family against loss exposures arising out of the ownership, maintenance, or use of automobiles.

An insurer domiciled in a country other than the United States.

A state law that permits any producer with a surplus lines license issued by that state to procure insurance from an eligible surplus lines insurer if the applicant cannot obtain the desired type of insurance in the admitted market.

A conscious act or decision not to act that reduces the frequency and/or severity of losses or makes losses more predictable.

A methodical examination of a policyholder's operations, records, and books of account to determine the actual exposure units and premium for insurance coverages already provided.

An insurer to which a stale insurance department has granted a license to do business within that state.

An insurer not authorized by the state insurance department to do business within that state.

The transfer of insurance risk from one insurer to another through a contractual agreement under which one insurer (the reinsurer) agrees, in return for a reinsurance premium, to indemnify another insurer (the primary insurer) for some or all of the financial consequences of certain loss exposures covered by the primary's insurance policies.

An association of investors, grouped in syndicates, who are represented by underwriters to write insurance and reinsurance.

An insurer that is formed primarily to cover the loss exposures of its parent or members.

Insurance that covers ships and their cargo against losses like fire, lightning, and 'perils of the sea.' Most cargo that travels by water is insured as 'ocean marine' or 'wet marine.

The obligation to act in complete honesty and to disclose all relevant facts.

An insurer doing business in the jurisdiction in which it is incorporated.