Insurers and the Consumer
Table of Contents
Introduction |
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Table of Contents |
1 |
Welcome |
5 |
Chapter One: Insurers |
Page 7 |
Government Sponsorship |
7 |
Private Sponsorship |
8 |
Private Insurers |
8 |
Stock Companies |
8 |
Financial Soundness |
9 |
Capital Stock, surplus, surplus to policyholders |
10 |
Lloyds of London |
12 |
Transacting Lloyds’ of London Business |
14 |
Excess business, surplus insurance |
16 |
Self-Insurance |
16 |
Excess loss, share basis |
17 |
Captive Insurance Companies |
19 |
Risk-Retention Groups (RRG) |
20 |
Alternatives |
21 |
Compensating Balance Plans, Paid-loss retro |
21 |
Chapter Two: Controlling Loss |
Page 22 |
Risk/Chance of Loss |
22 |
Loss frequency, loss-severity |
23 |
Loss Control |
24 |
Engineering Approaches |
25 |
Human Approaches |
25 |
Prevention |
26 |
Risk Awareness |
30 |
Application of Loss Prevention |
32 |
Pre-Contact |
32 |
Contact |
33 |
Post-Contact |
33 |
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Chapter Three: Underwriting & Reinsurance |
Page 35 |
Pricing |
35 |
Adverse Selection, actuarial equity |
36 |
Selective Underwriting |
39 |
The First Step in the Selection Process |
39 |
Level of Risk |
40 |
Standard risk, Preferred risk, Sub-standard risk |
40 |
Post-Selection |
41 |
Adverse Selection |
42 |
Moral Hazard |
42 |
Morale Hazard |
43 |
Competing in the Marketplace |
43 |
Redlining |
44 |
Example |
44 |
The Underwriting Cycle |
45 |
Example |
45 |
What are we Insuring Against? |
46 |
The Economic Burden of Risk |
48 |
Types of Risk |
49 |
Determining degrees of Risk |
49 |
Probability of Loss |
50 |
The Law of Large Numbers |
51 |
Risk Information |
51 |
The Insurer’s View & The Consumer’s View |
52 |
Deductible Clauses |
54 |
Reinsurance |
55 |
Why is Reinsurance Used? |
56 |
Pro Rata & Excess of Loss |
57 |
Pro Rata |
58 |
Excess of Loss |
58 |
Shopping for Reinsurance |
59 |
Brokers |
61 |
What Else is Available? |
62 |
Chapter Four: Ratemaking |
Page 63 |
What is Ratemaking? |
63 |
A Matter of Class |
64 |
Territory Risk Groupings |
65 |
Special Aspects of Ratemaking |
66 |
Catastrophes |
66 |
Minimum Premiums |
67 |
Merit Rating |
67 |
Prospective Experience Rating |
69 |
Retrospective Experience Rating |
69 |
Fire Insurance |
70 |
Construction |
71 |
Occupancy |
72 |
Exposure |
72 |
Protection |
72 |
Where is the Structure Located? |
73 |
Time of Loss |
73 |
Following Proper Procedures Essential |
74 |
Schedule-rated risks |
75 |
Chapter Five: Insurance Regulation |
Page 77 |
Do We Need So Many Hoops? |
77 |
How Do These Traditions Come About? |
82 |
Paul versus Virginia |
82 |
How Does State Regulation Work? |
83 |
The Commissioner’s Primary Powers Include … |
87 |
Insurance: A Regulated Business |
89 |
What Do the States Do? |
89 |
Insurance Classes |
90 |
Taxation |
90 |
Regulating Agents & Brokers |
93 |
Premium Rates |
95 |
Prior approval |
96 |
Modified prior approval, file-and-use |
97 |
Insurer Assets |
98 |
Chapter Six: Terrorism Risk Insurance Act |
Page 101 |
Defining “Act of Terrorism” |
101 |
TRIA |
102 |
President Bush Signs the Act |
103 |
The Role of Terrorism Insurance |
104 |
Policy Restrictions |
106 |
Business Interruption Insurance |
106 |
Example |
108 |
Workers Compensation & Other Coverage |
108 |
Coverage Under Terrorism Insurance |
109 |
Key Benefits |
112 |
Chapter Seven: Ethics |
Page 115 |
“Agent, Protect Thyself” |
115 |
Why Would an Agent be Sued? |
117 |
What Are the Agent’s Professional Responsibilities? |
120 |
Example |
121 |
E & O Insurance |
122 |
Claims-Made Versus Occurrence Policies |
123 |
Example |
123 |
On the Personal Side of Ethics |
125 |
Example |
126 |
Valuing Human Relationships |
126 |
Truly Ethical or Simply Ethical for Show? |
127 |
Example |
129 |
Justice for All |
131 |
Objectivist Ethics: Preserve Life |
132 |
Value & Virtue |
134 |
What is Really Ethical? |
136 |
Just the Facts |
137 |
Viewing From a Different Angle |
143 |
Mores |
146 |
Example |
146 |
Relativism |
148 |
“Ought Implies Can” |
149 |
Example |
151 |
Personal Conditioning |
153 |
Example |
154 |
Example |
155 |
Example |
156 |
Example |
157 |
The Legal System |
159 |
Example |
160 |
Example |
162 |
Determining Right From Wrong |
163 |
Last Page |
165 |
United Insurance Educators, Inc.
PO BOX 1030
Eatonville, WA 98328
(800) 735-1155
Email: mail@uiece.com