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Chapter 10 Nature of the Insurance Industry
Chapter Summary
Section 10.1 Insurance Contracts
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insurance company.
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sections for declarations, insuring agreement, definitions, exclusions,
conditions, and endorsements.
Section 10.2 How Insurers Manage Risk
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larger numbers, which says the accuracy of a statistic increases with the
sample size.
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what premium to charge is underwriting, and the main goal is to guard
against adverse selection.
Section 10.3 Insurance Claims
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complex claim may involve an independent loss adjuster.
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appealed, and it may end up in arbitration.
Section 10.4 Consumer Resources
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an expert opinion on the health of companies and investment products.
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respective states.
Checkpoint 10.4
1. What service do ratings agencies perform?
2. What role does the financial analyst play in a ratings agency?
3. How do ratings agencies give their opinion of a company’s financial
health?
4. What professional collects and analyzes numerical data for ratings
agencies and other companies?
5. What entities supervise and regulate insurers?
Build Your Vocabulary
As you progress through this course, develop a personal glossary of
insurance terms. This will help you build your vocabulary and prepare you
for a career in insurance. Write out a definition for each of the following
terms, and add it to your personal insurance glossary.
ratings agencies
financial analyst
statisticians
state insurance departments