Chapter 5 life New Jersey
Laws Rules and
Regulations Common to
all Line Exam Questions
and Complete Solutions
Graded A+
Denning [Date] [Course title]
,The insurer - Answer: Or principal is the Company organization the issues of policy of insurance.
Insurance companies can be classified in a variety of ways based on ownership authority to transact
business location of incorporation marketing systems or reading.
Ownership - stock companies - Answer: Are owned by the stockholders will provide the capital
necessary to Starbush and operate the insurance company and who share in any profits or losses.
Officers are elected by the stockholders and men's sock insurance companies. Traditionally stock
companies issue with non-participating policies in which the policy owners do not share in profits or
losses. A non-participating policy does not pay dividends to policy owners: however taxable dividends
are paid to stockholders
Ownership: Mutual Companies - Answer: Are owned by the policy owner is an issue participating
policies. Policy owners are entitled to dividends which in the case of mutual company is our return of
excess premiums on there for non-taxable. Dividends or generated when the premiums and earnings
combined exceed the actual cost of providing coverage, creating a surplus. Dividends are not
guaranteed
Location of Incorporation(domicile) - Answer: Insurance companies are classified according to the
location of incorporation. Regardless of where in insurance companies Inc. it must obtain a certificate of
authority before transacting insurance within the state.
Domestic Insurer company - Answer: Is an insurance company that is incorporated in the state. In most
cases the companies home office is in the state in which it was formed four instance a company charge
in Pennsylvania would considered a Pennsylvania domestic compny
A foreign insurer company - Answer: Isn't insurance company that is incorporated in another state or
territorial position like Puerto Rico a company charted in California would be a foreign company with the
state of New York
An alien insurer company - Answer: Is an insurance company that is Inc. outside of United States
Certificate Authority - Answer: Before ensures me transact business in the state they must apply for and
be granted a license or certificate of authority from the state department of insurance and me any
financial requirements set by the state. Insurance who made the states financial requirements and are
approved to transact business in the state are considered authorize or admitted into the state as a legal
ensure those insurers who have not been approved to do business in the state are considered on off the
, rise or non-admit it. Most states have laws that prohibit on authorize insurers to conduct business in the
state except through license express and surplus loan brokers
Insurance agent - Answer: Is an insurance producer acting as an agent author rise in writing by any
insurance company to solicit negotiate or so insurance contract or collect premiums on his behalf. The
agent is also authorized to counter sign insurance policies on the company's behalf. The agents are
deemed to represent the insurance
Insurance broker - Answer: When an insurance producer negotiate for an insurance contract on behalf
of a client the producer is acting as a broker. And insurance broker active as a representative of an
insured or prospective insured, and helps with insurance transactions on the insurance behalf for
commission, brokerage fee, or other considerations
An insurance consultant - Answer: Is a person for a fee commission or other considerations offers any
advice counsel opinion or service regarding the benefits advantages or disadvantages of any insurance
policy issued in the state. Not included in the insurance consultant definition or a bank trust officers,
attorneys, and certified public accountant will negotiate contracts on behalf of others, or who provide
general financial counsel, if no commission or brokerage fee is paid for those services.
Insurance transaction includes - Answer: solicitation, negociations, sale, advising and individual
concerning coverage or claims
Sell vs. solicit vs. negotiate - Answer: Sell - to exchange a contract or policy of insurance by any means
for money or to equivalent on behalf of the insurer
Solicit - means to attempt to sell insurance or ask urgent person to apply for a specific type of insurance
from a particular insurer
Negotiate - means the active directly conferring with or offering advice to a purchaser or protective
purchase of a particular contract or policy of insurance concerning any of the benefits, terms or
conditions, provided that the person engage in the act either sells insurance or tails insurance from
insurance for purchasers
Insurance Related Conduct includes : - Answer: Selling soliciting negotiating and finding insurance
policies: all communication with the insured concerning any terms of the policy: office management
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