Xcel Terms - CHAPTER 1 - PART 3

Nonparticipating Policy

This is a policy that’s typically issued by stock companies. This type of policy doesn’t allow policy owners to participate in dividends or to elect the board of directors.

Participating Policy

This is an insurance policy that pays policy dividends to policy owners. By receiving dividends, policy owners share in the company’s divisible surplus and also elect the company’s board of directors.

Personal Producing General Agency (PPGA)

This is an agency that represents one or more specific insurers. A PPGA is a similar agency system, but PPGAs don’t recruit, train, or supervise career agents.

Policy owner

This is the person who’s responsible for the payment of premiums and who possesses all ownership rights of the contract. Typically, the policy owner is also the insured.

Private (Commercial) Insurer 

This is an insurer that’s owned by private citizens or groups that offer one or more insurance lines. Commercial insurers are NOT government-owned.

Producer

This is an individual who’s licensed by one or more states to sell, solicit, or transact insurance in a given state.

Proposed Insured

This is the person whose life will be covered by an insurance policy. (See also: Insured).

Public Adjuster

This person acts on behalf of a consumer who’s settling an insurance claim.

Reciprocal Insurer

This is an unincorporated organization in which all members insure one another. An attorney-in-fact manages it.

Reinsurance

This is the acceptance by one or more insurers (referred to as reinsurers) of a portion of the risk being underwritten by another insurer that has contracted with a consumer to cover the entire risk.

Reinsurer

This is a company that provides financial protection to insurance companies. Reinsurers handle risks that are too large for insurance companies to cover on their own and make it possible for insurers to obtain more business than they would otherwise be able to obtain.