Podcast
Questions and Answers
What is the primary purpose of investigating suspicious activities related to insurance?
What is the primary purpose of investigating suspicious activities related to insurance?
Which of the following is NOT a category covered by the 'Domicile of Insurer' classification?
Which of the following is NOT a category covered by the 'Domicile of Insurer' classification?
What is the maximum administrative penalty for a single violation of a Cease and Desist Order?
What is the maximum administrative penalty for a single violation of a Cease and Desist Order?
What does 'Surplus Lines' insurance provide to customers?
What does 'Surplus Lines' insurance provide to customers?
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What is the primary purpose of the Texas Property and Casualty Guaranty Association?
What is the primary purpose of the Texas Property and Casualty Guaranty Association?
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Which of the following is NOT a key activity considered 'transacting insurance' under the Joint Underwriting Association (JUA) model?
Which of the following is NOT a key activity considered 'transacting insurance' under the Joint Underwriting Association (JUA) model?
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A General Lines Property & Casualty Agent license in Texas allows individuals to sell which types of insurance?
A General Lines Property & Casualty Agent license in Texas allows individuals to sell which types of insurance?
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The 10/30 rule in Texas insurance regulations refers to the timeframe related to:
The 10/30 rule in Texas insurance regulations refers to the timeframe related to:
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What is the primary difference between a Stock insurer and a Mutual insurer?
What is the primary difference between a Stock insurer and a Mutual insurer?
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What is the most common type of company that participates in Lloyds of Texas?
What is the most common type of company that participates in Lloyds of Texas?
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What is the primary purpose of the Texas Medical Liability Insurance Underwriting Association (TMLIUA)?
What is the primary purpose of the Texas Medical Liability Insurance Underwriting Association (TMLIUA)?
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What is the requirement for a corporation to obtain an Agent Licensing in Texas?
What is the requirement for a corporation to obtain an Agent Licensing in Texas?
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What is the maximum duration for a temporary agent license in Texas?
What is the maximum duration for a temporary agent license in Texas?
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What is the primary requirement for a non-resident agent to sell insurance in Texas?
What is the primary requirement for a non-resident agent to sell insurance in Texas?
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Who are the primary beneficiaries of dividends in a mutual insurer?
Who are the primary beneficiaries of dividends in a mutual insurer?
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What is the primary purpose of 'reinsurance reserves' held by an insurer?
What is the primary purpose of 'reinsurance reserves' held by an insurer?
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Who is known as the first named insured in a policy?
Who is known as the first named insured in a policy?
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What does the principle of indemnity refer to?
What does the principle of indemnity refer to?
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What is an endorsement in insurance terms?
What is an endorsement in insurance terms?
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What does the term cancellation refer to in an insurance policy?
What does the term cancellation refer to in an insurance policy?
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What is the purpose of a binder in insurance?
What is the purpose of a binder in insurance?
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What does the term non-renewal indicate?
What does the term non-renewal indicate?
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Who is the commissioner of insurance?
Who is the commissioner of insurance?
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What does underwriting assess in an insurance context?
What does underwriting assess in an insurance context?
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Study Notes
Insurance Terminology
- Insurer: The company providing coverage.
- Insured: The person receiving protection (customer).
- Named Insured: The customer with the broadest coverage. Typically, the first name on the policy, and often the primary payer or plan selector.
- Additional Insured: A person or company added to the policy after the named insured.
- Principle of Indemnity: Compensation for damages at a fair market value.
- Underwriting: Assessing the insurer's ability to pay potential damages.
- Insurable Interest: Ensuring the insured isn't using insurance for personal gain.
Insurance Events & Actions
- Accident: An unexpected event causing damage.
- Occurrence: Ongoing damage over time, such as a leak causing gradual rot.
- Cancellation: Discontinuing a policy before its expiration date due to non-payment.
- Non-Renewal: Policy not renewed due to high risk or poor driving record (e.g., too many tickets).
- Binder: Temporary proof of insurance, stating coverage details and premium.
- Certificate of Insurance: Proof of coverage, including start date and types of coverage, kept by policyholder.
- Endorsement: Policy amendment.
- Arbitration: Resolving disagreements through a third party.
- Appraisal: Determining the value of a vehicle.
- Commissioner of Insurance: Texas official regulating insurers & ensuring compliance with laws and standards.
- Examination of Records: Financial stability evaluation conducted every 5 years.
- Investigation/Notice of Hearing: Examination of suspicious activities.
- Cease and Desist Order: Preventing policy violations. Penalties range from $50 - $500, but can be higher in excess.
- Reinsurance Reserves: Insurer funds to cover liabilities if they become bankrupt.
Insurance Types and Categories
- Surplus Lines Insurance: Handles insurance unavailable from 'admitted' insurers, often for high-risk scenarios.
- Texas Property and Casualty Guaranty Association: Non-profit organization covering claims if an insurer goes bankrupt, mandatory for admitted insurers.
- Certificate of Authority: Insurance license granted to insurers.
- Stock Insurer: Owned by shareholders, who receive dividends (potentially taxable).
- Mutual Insurer: Owned by policyholders, who receive dividends (potentially non-taxable).
- Lloyd's of Texas: Companies with multiple underwriters offering coverage for specified risks.
- Joint Underwriting Association (JUA): Insurer group offering coverage for difficult-to-obtain exposures.
Insurance Agents and Licensing
- General Lines Property & Casualty Agent: Standard license for selling various property and casualty insurance types. Requires U.S. citizenship and exam completion.
- Agent Licensing as a Corporation: Requires at least one licensed officer or partner. No suspended or revoked licenses for officers/partners.
- Temporary Agent: Short-term license (180 days), cannot be renewed more than once per six months, requires 40 hours supervised training.
- Non-Resident Agent: Licensed in another state, eligible to sell insurance in Texas. Requires reciprocal licensing.
- Limited Lines Agent: Focuses on specific types of insurance.
- Emergency License: Granted in specific circumstances (death, disability, insolvency) for a 90-day period within a 12-month period.
Insurer Types and Location
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Domicile of Insurer:
- Domestic: Home office in Texas.
- Foreign: Home office in another U.S. state.
- Alien: Home office in a foreign country.
- Admitted Insurer: Licensed to sell insurance in Texas.
- Non-admitted Insurer: Not licensed or authorized to sell insurance in Texas.
- Sanctions and Penalties: License revocation or other actions (e.g., commissioner must notify the insurer 10 days in advance of potential action, 10/30 rule).
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Description
Test your knowledge on essential insurance terminology and concepts. This quiz covers key terms such as insurer, insured, underwriting, and more. Perfect for those studying insurance or looking to refresh their understanding of the subject.
