INSURER OWNERSHIP

INSURER OWNERSHIP

1. stock insurers

   • Purpose formed to earn profits
   • Its a corporation
   • Owned by stockholder
   • Operated by directors

2. mutual insurers

   • To provide insurance for its owners
   • Its a Corporation
   • Owned by Policyholders
   • Operated by directors

3. reciprocal insurance exchanges

   • Owned by Subscribers
   • Purpose formed to provide reciprocity for subscribers
   • Unincorporated association
   • Operated by an attorney incharge

4. Lloyd's

   • Formed to earn a profit for its individual investors
   • Unincorporated association
   • Owned by Investors
   • regulated by the U.K. (FSA), which delegates much authority to the Council of Lloyd's.

5. INSURANCE FUNCTIONS

   • Marketing
     • significantly to an insurer's profit goals and its goals of meeting customers' needs
   • Underwriting
     • process of selecting insureds, pricing coverage, determining insurance policy terms and conditions,
   • Claims
     • person or business seeking to recover from an insurer for a loss that may be covered by an insurance policy
   • Risk control
     • decision not to act that reduces the frequency of severity of losses or makes losses more predictable.
   • Premium audit
     • determine adjustments to the premium that may be required based on the insured's actual loss exposures during that period.

6. REGULATIONS FOR INSURERS

   • To protect consumers
   • To maintain insurer solvency
   • To prevent destructive competition
   • Licensing Status
     • Domestic insurer
       • Only state insurer
     • Foreign Insurer
       • Other state insurer
     • Alien insurer
       • Other country insurer
   • Insurance Rate Regulation
     • Adequate
     • Not excessive
     • Not unfairly discriminatory
     • Exemptions From Rate
       • Surplus lines insurers are generally exempt from insurance regulations pertaining to policy forms and rates.
       • Many states have deregulated some commercial insurance coverages for large, sophisticated purchasers.
   • SURPLUS LINES MARKET
     • Unique Loss Exposures
     • Nonstandard Business
     • High Limits of Coverage
     • Unusually Broad Coverage
     • Require New Forms
     • Surplus Lines Regulation
       • A nonadmitted insurer that is eligible to accept business from a state is referred to as a surplus lines insurer.
       • the surplus lines licensee must collect the surplus lines premium tax stipulated by the surplus lines law