Claims Adjuster Academy Chapter 3 Demo

There are several organizations that rate the financial strength of insurance carriers, based on an analysis of a company’s claims experience, investment performance, management, and other factors. These organizations include A.M. Best, Standard & Poor’s, Moody’s, Duff & Phelps, and

Weiss Research. Self-Insurance

The retaining of risk. Lloyd’s of London An exchange that provides facilities for its members but does not buy or sell securities itself. Principal In the insurance business, the principal is the insurance company and the agent is a person authorized to act on the company’s behalf. Authority Express Authority- Express actual authority means an agent has been expressly told he or she may act on behalf of a principal. Implied Authority- Implied actual authority, also called “usual authority”, is authority an agent has by virtue of being reasonably necessary to carry out his express authority. Apparent Authority- Exists where the principal’s words or conduct would lead a reasonable person in the third party’s position to believe that the agent was authorized to act, even if the principal and the purported agent had never discussed such a relationship. Insurable Interest The basic rule concerning who can be insured states that before the insured can benefit from insurance, he or she must have a chance of financial loss or have a financial interest in the property. This is called an insurable interest. Loss ratio Method used to determine an insurance company’s success in covering current losses out of current premium income; determined by dividing incurred losses by earned premium. Underwriting When the application comes to the insurance company, underwriters review it for its acceptability to the company. In addition to the application, underwriters may turn to other sources of information to help them evaluate the risk.