Principles of Insurance - (Mississippi State - Seth Pounds - Exam 2) Latest Update Graded A+

Principles of Insurance - (Mississippi State - Seth Pounds - Exam 2) Latest Update Graded A+ A ___________________ is a corporation *owned by stockholders.* - *Objective:* earn profit for stockholders by increasing the value of stock and paying dividends - Stockholders *elect board of directors,* who in turn appoint executive officers to manage the corporation. - Stockholders *bear all losses.* - Insurer cannot issue an *assessable policy.* stock insurer A _____________________is a corporation *owned by the policyowners.* - Policyowners elect *board of directors*, who appoint executives to manage the corporation. - Policyholders may receive *dividends or rate reductions.* mutual insurer A(n) _____________________ has the *right to assess policyowners* an additional amount if the insurer's financial operations are unfavorable. assessment mutual ___________________________ *is not an insurer*, but *a society of members who underwrite* insurance in syndicates. - Membership includes *corporations, individual members (called Names), and limited partnerships.* - New individual members now have limited legal liability - Corporations with limited legal liability and limited liability partnerships can also join ______________________. - Members must meet stringent financial requirements - ____________________ is *licensed only in a small number* of jurisdictions in the U.S. Lloyd's of London A ______________ *provides TEMPORARY insurance* until the policy is actually WRITTEN. binder A __________ is someone who *legally represents the insured*, and: - *solicits applications* and attempts to place coverage with an appropriate insurer - is paid a commission from the insurers where the business is placed - *DOES NOT have the authority to bind the insurer* broker A _____________________ is licensed to place business with a non-admitted insurer surplus lines broker are *independent agents* who DO NOT have an *exclusive contract* with any single insurer Brokers A(n) ________________ is someone who *legally represents the principal* and has the authority to *act on the principal's behalf.* agent