Claims Adjuster Academy Chapter 3 Demo

Commissioner of Insurance The commissioner is the department’s chief executive and administrative officer. The commissioner administers and enforces insurance the laws of Texas, and other laws granting jurisdiction or applicable to the department or the commissioner. The commissioner is appointed by the Texas governor, with the Texas Senate approval, for a two-year period. The Texas Department of Insurance The governing body for all insurance regulation in The Great State of Texas. Law and the Legal System Criminal laws- Protect public interests by governing how suspects are investigated, charged, and tried; and specify punishment. Criminal laws are statutory laws designed to punish wrongdoers. Common Law- The body of law that has developed over time through the decisions of judges. Statutory Law- The body of law developed from statutes rather than decisions of judges. Statutes- Laws enacted by legislative bodies. Hearsay- Hearsay is a person’s testimony of what he or she has heard others say but of which he or she has no personal knowledge. Claims Agents and Their Role in Insurance The Law of Large Numbers- The Law of Large Numbers helps insurers to predict the number of losses they will pay in any given time period so that they can determine what premium is required to pay for those losses. Civil laws- Protect individuals’ private rights. Sources of Law

The Principle of Indemnity and Insurable Interest

Principle of Indemnity- Explains that an insured who has suffered a loss should be restored to the same financial position as before the loss. Insurers use the loss ratio as a tool to measure their profitability.

The pure loss ratio is expressed as a percentage, as shown below:

(INCURRED LOSSES DIVIDED BY EARNED PREMIUM) X 100 = PURE LOSS RATIO