Health and Life Insurance

Actuarial Department

The department that calculates policy rates, reserves, and dividends.

Adjuster

The person who investigates claims and arranges for them to be settled or denied.

Alien Insurer

An insurer whose principal office and domicile location is outside the United States.

Admitted Insurer

An insurer that has received a certificate of authority from a state’s department of insurance to conduct insurance business in that state.

Agent

An individual or organization authorized to solicit, sell, and transact coverage for specific insurance providers.

Authorized Insurer

An admitted insurer.

Broker

A person who represents himself and the insured, but cannot bind coverage on behalf of an insurance carrier.

Captive Insurer

An insurer established and owned by a parent firm to insure the parent firm’s loss exposure.

Certificate of Authority

A license issued to an insurer by an insurance department that authorizes the company to conduct insurance business in that state.

Claims Department

The department responsible for processing, investigating, and paying claims.

Divisible Surplus

The amount of earnings paid to policy owners as dividends after the company sets aside necessary funds.

Domestic Insurer

An insurer with its principal office in the state where it is authorized.

Foreign Insurer

An insurer whose principal office is in a state different from where it transacts business.

Fraternal Benefit Society

A non-profit organization that provides insurance to its members.

To be characterized as a fraternal benefit society, the organization must have the following characteristics:

• It must be a non-profit organization

• It must have a lodge system that includes ritualistic work and must maintain a representative government form with elected officers

• It must exist for reasons other than obtaining insurance

Independent Insurance Agency

An agency that represents multiple insurance companies through contractual agreements.

Insurance

The transfer of risk through the pooling or accumulation of funds.

Insured

The customer who receives insurance protection under an insurance policy.

Insurer

An insurance company.

Lloyds of London

A group of individuals and companies that underwrite unusual insurance policies, not an insurer.

Marketing Division

The division responsible for acquiring prospective applicants through advertising.

Monoline Insurer

An insurance carrier that sells only one line of insurance.

Multi-Line Insurer

An insurance company that provides coverage for various insurance needs.

Mutual Insurance Company

An insurance company owned by its policy owners that issues participating insurance.

Non-Admitted (Unauthorized) Insurer

An insurer that has not received a certificate of authority to conduct business in a state.

Nonparticipating Policy

A policy typically issued by stock companies that doesn't allow participation in dividends.

Participating Policy

An insurance policy that pays dividends to policy owners.

Personal Producing General Agency (PPGA)

An agency that represents specific insurers without recruiting or supervising career agents.

Policy owner

The person responsible for payment of premiums and possessing ownership rights of the contract.

Private (Commercial) Insurer

An insurer owned by private citizens or groups offering insurance lines.

Producer

An individual licensed to sell, solicit, or transact insurance in a given state.

Proposed Insured

The person whose life is covered by an insurance policy.

Public Adjuster

A person who acts on behalf of a consumer settling an insurance claim.

Reciprocal Insurer

An unincorporated organization where all members insure one another, managed by an attorney-in-fact.

Reinsurance

The acceptance of a portion of risk by reinsurers from another insurer.

Reinsurer

A company that provides financial protection to insurance companies.

Risk Retention Group

A group-owned liability insurer spreading risks among its members.

Sales Department

The department that acquires clients through one-on-one meetings.

Self-Insurer

A company that establishes a self-funded plan to cover potential losses.

Service Representatives

Customer service employees not required to obtain a license.

Solicitors

Individuals who schedule sales meetings between consumers and producers.

Stock Insurance Company

An insurance company owned by stockholders, issuing nonparticipating policies.

Surplus Lines Insurance

Non-traditional insurance from surplus lines insurers for unusual risks.

Unauthorized Insurer

A non-admitted insurer.

Underwriting Department

The department responsible for reviewing applications and assigning risk classifications.