Most states require that excess line insurers submit financial information, articles of incorporation, a list of officers, and other general information. [27] They also may not write insurance that is typically available in the admitted market, do not participate in state guarantee funds (and therefore policyholders do not have any recourse through these funds if an insurer becomes insolvent and cannot pay claims), may pay higher taxes, only may write coverage for a risk if it has been rejected by three different admitted insurers, and only when the insurance producer placing the business has a surplus lines license. [27] Generally, when an excess line insurer writes a policy, it must, pursuant to state laws, provide disclosure to the policyholder that the policyholder's policy is being written by an excess line insurer.
Excess line insurance companies (also known as Excess and Surplus) typically insure risks not covered by the standard lines insurance market, due to a variety of reasons (e. g. , new entity or an entity that does not have an adequate loss history, an entity with unique risk characteristics, or an entity that has a loss history that does not fit the underwriting requirements of the standard lines insurance market). [27] They are typically referred to as non-admitted or unlicensed insurers. [27] Non-admitted insurers are generally not licensed or authorized in the states in which they write business, although they must be licensed or authorized in the state in which they are domiciled. [27] These companies have more flexibility and can react faster than standard line insurance companies because they are not required to file rates and forms. [27] However, they still have substantial regulatory requirements placed upon them.
In the European Union, the Third Non-Life Directive and the Third Life Directive, both passed in 1992 and effective 1994, created a single insurance market in Europe and allowed insurance companies to offer insurance anywhere in the EU (subject to permission from authority in the head office) and allowed insurance consumers to purchase insurance from any insurer in the EU. [34] As far as insurance in the United Kingdom, the Financial Services Authority took over insurance regulation from the General Insurance Standards Council in 2005;[35] laws passed include the Insurance Companies Act 1973 and another in 1982,[36] and reforms to warranty and other aspects under discussion as of 2012.
To reduce their own financial exposure, insurance companies have contractual clauses that mitigate their obligation to provide coverage if the insured engages in behavior that grossly magnifies their risk of loss or liability.
Generally, an insurance contract includes, at a minimum, the following elements: identification of participating parties (the insurer, the insured, the beneficiaries), the premium, the period of coverage, the particular loss event covered, the amount of coverage (i. e. , the amount to be paid to the insured or beneficiary in the event of a loss), and exclusions (events not covered).
For policies that are complicated, where claims may be complex, the insured may take out a separate insurance policy add on, called loss recovery insurance, which covers the cost of a public adjuster in the case of a claim.
While on the surface it appears the broker represents the buyer (not the insurance company), and typically counsels the buyer on appropriate coverage and policy limitations, in the vast majority of cases a broker's compensation comes in the form of a commission as a percentage of the insurance premium, creating a conflict of interest in that the broker's financial interest is tilted towards encouraging an insured to purchase more insurance than might be necessary at a higher price.
The advantages of whole life insurance are guaranteed death benefits, guaranteed cash values, fixed, predictable annual premiums and mortality and expense charges that will not reduce the cash value of the policy.
Life insurance (or commonly life assurance, especially in the Commonwealth) is a contract between an insured (insurance policy holder) and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money (the "benefits") in exchange for a premium, upon the death of the insured person.
Consequently, in a group of one thousand 25-year-old males with a $100,000 policy, all of average health, a life insurance company would have to collect approximately $50 a year from each participant to cover the relatively few expected claims. (0. 35 to 0. 66 expected deaths in each year x $100,000 payout per death = $35 per policy).
Joint life insurance is either a term or permanent policy insuring two or more persons with the proceeds payable on either the first or second death.
In at least one case, an insurance company which sold a policy to a purchaser with no insurable interest (who later murdered the CQV for the proceeds), was found liable in court for contributing to the wrongful death of the victim (Liberty National Life v. Weldon, 267 Ala. 171 (1957)).
In the case of life insurance, there is a possible motive to purchase a life insurance policy, particularly if the face value is substantial, and then murder the insured.
Another type of permanent insurance is Limited-pay life insurance, in which all the premiums are paid over a specified period after which no additional premiums are due to the policy in force.
The insurance policy is generally an integrated contract, meaning that it includes all forms associated with the agreement between the insured and insurer. [1]:10 In some cases, however, supplementary writings such as letters sent after the final agreement can make the insurance policy a non-integrated contract. [1]:11 One insurance textbook states that generally "courts consider all prior negotiations or agreements ... every contractual term in the policy at the time of delivery, as well as those written afterwards as policy riders and endorsements ... with both parties' consent, are part of written policy". [2] The textbook also states that the policy must refer to all papers which are part of the policy. [2] Oral agreements are subject to the parol evidence rule, and may not be considered part of the policy if the contract appears to be whole.
In the United States, property & casualty insurers typically use similar or even identical language in their standard insurance policies, which are drafted by advisory organizations such as the Insurance Services Office and the American Association of Insurance Services. [9] This reduces the regulatory burden for insurers as these forms must be approved by states and also allows consumers to more readily compare policies, albeit at the expense of consumer choice. [9] In addition, as these forms are reviewed by courts the interpretations become predictable.
In the 1940s, the insurance industry shifted to the current system where covered risks are initially defined broadly in an insuring agreement on a general policy form (e. g. , "We will pay all sums that the insured becomes legally obligated to pay as damages.. ". ), then narrowed down by subsequent exclusion clauses (e. g. , "This insurance does not apply to.. ". ).
In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the insured, known as the policyholder, which determines the claims which the insurer is legally required to pay.
However, certain types of insurance, such as media insurance, are written as manuscript policies, which are either custom-drafted from scratch or written from a mix of standard and nonstandard forms. a b c Wollner KS. (1999).
Since insurance policies are standard forms, they feature boilerplate language which is similar across a wide variety of different types of insurance policies.
The uncertainty can be either as to when the event will happen (e. g. in a life insurance policy, the time of the insured's death is uncertain) or as to if it will happen at all (e. g. in a fire insurance policy, whether or not a fire will occur at all).
If the accident was the other driver's fault, and this fault is accepted by the third party's insurer, then the vehicle owner may be able to reclaim the excess payment from the other person's insurance company.
Within New Zealand, the Accident Compensation Corporation (ACC) provides nationwide no-fault personal injury insurance. [9] Injuries involving motor vehicles operating on public roads are covered by the Motor Vehicle Account, for which premiums are collected through levies on petrol and through vehicle licensing fees.
In New South Wales and the Northern Territory Compulsory Third Party Insurance (commonly known as CTP Insurance) is a mandatory requirement and each individual car must be insured or the vehicle will not be considered legal.
Vehicle insurance (also known as auto insurance, GAP insurance, car insurance, or motor insurance) is insurance purchased for cars, trucks, motorcycles, and other road vehicles.
In 1930, the UK government introduced a law that required every person who used a vehicle on the road to have at least third party personal injury insurance.
Since 1939, it has been compulsory to have third party personal insurance before keeping a motor vehicle in all federal states of Germany.
Third Party Property Insurance covers damage to someone else's property or vehicle, but not your own vehicle.
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