Maryland Property And Casualty Study Guide Rated A+

Risk Retention Groups (RRG) {Ans: a liability insurance company owned by its members. The members are exposed to similar liability risks by virtue of being in the same business or industry.}Captive agent {Ans: represent only one company and are compensated by commissions}Apparent Authority {Ans: the appearance or assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.}Physical Hazard {Ans: those arising from the material, structural, or operational features of the risk, apart from the persons owning or managing it}General Agency System {Ans: -agent-entrepreneur represents 1 company -exclusive -Compensation and commissions -appoint subagents}Adverse Selection {Ans: the insuring of risks that are more prone to losses than the average risk. Companies strive to protect themselves from this and are given the option to to refuse or restrict coverage, or charge a higher rate}Loss {Ans: defined as the reduction, decrease, or disappearance of value of the person or property insured in a policy, caused by a named peril. Insurance provides a means to transfer this.}Homogeneous exposure {Ans: larger number of units having similar exposure to loss. sharing risk among members of that group.}Contract of Adhesion