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Insurance

It's an agreement where an insurance company protects you from specific future risks in exchange for regular payments (a premium).

Risk

• Uncertainty of a loss

Pure risk:

Insurable because it involves a chance of loss only

• Speculative risk:

• not insurable because it involves a chance of loss or
  gain, i.e. Gambling

• Hazards:

• Events or conditions that increase the chance of a loss

• Physical:

• a physical condition: medical history, blindness, deafness

• Moral (MO- RAL):

• a lie

• Morale (MO-RAH-LEE):

• doing really (REAL-LEE) unsafe things

Peril:

• The cause of a loss: fire, accident, flood

• Law of Large Numbers:

• Predicts the number of deaths that should occur
  within a similar group of people; the larger the number, the more accurate
  the prediction

• Captive/ Career agent:

• works for one company and sells only their products

• Independent agent:

• Works for self and sells products for many companies

• Domestic agent:

• incorporated in the state they are doing business (i.e.
  California)

• Foreign agent:

• incorporated in another state (i.e. Oregon or Arizona) but doing business in California

• Alien agent:

• incorporated in a country outside the United States (i.e. Canada or England) but doing business in California

• Fiduciary:

• a person in position of financial trust. For example, an agent that collects premiums must remit them promptly to the insurance company

• Appointment:

• Authorization of an agent/ producer by an insurer to represent the company

• Authorized/ Admitted:

• All companies (domestic, foreign, alien) must have a license to conduct business in a state regardless of where their company in incorporated; An authorized company has a Certificate of Authority to conduct business in a state

• Certificate of Authority:

• A license granted by the state's insurance authority which allows an insurer the right to conduct business in that state

• Expressed

Powers specifically stated ad written in the contracts

• Implied:

Not specifically stated in the contract but is assumed authority that is needed to conduct insurance businesses

• Commissioner

Public official in charge of the state's Department of Insurance responsible for regulating the insurance industry by enforcing the
insurance laws

Conditional Receipt:

A type of premium receipt that states the coverage will be effective either: the date of application or the date of medical exam, whichever is later, IF the premium is submitted with the application and the coverage is approved as applied for