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LESSON 1: BASIC PRINCIPLES OF LIFE AND HEALTH INSURANCE and THE INSURANCE INDUSTRY

The following subjects are contained within Lesson 1:

Description: Newspaper

The Role of Insurance - The Significance and Purpose of Life and Health Insurance

Industry Overview - The Basic Reasons for Insurance; Overall Advantages of Insurance

The Nature of Insurance - Risk Pooling; Law of Large Numbers; The Difference Between Mortality and Morbidity

The Concept of Risk and Risk Management - Speculative Risks; Pure Risks; Perils; Hazards (Physical, Moral, Morale); Treatment of Risk (Risk Avoidance, Reduction, Retention, Transference); Elements of Insurable Risk; Adverse Selection

Private Insurers - (Stock Insurers; Mutual Insurers; Assessment Mutual Insurers; Reciprocal Insurers; Lloyd's of London; Reinsurers; Risk Retention Groups; Fraternal Benefit Societies; Home Service Insurers; Service Providers [HMOs, PPOs]; Self-Insurers)

Government Insurers - Social Insurance Programs

Distribution Systems - Captive Agents; Independent Agents; Solicitors; Consultants; Special Agents; Excess or Rejected Business; Agency Systems; Direct Selling; Mass Marketing

History of Regulation - Paul v. Virginia; U.S. vs. Southeastern Underwriters Association; The McCarran-Ferguson Act;

Intervention by the FTC; Intervention by the SEC; Fair Credit Reporting Act; Financial Services Modernization Act

State Self-Regulation - Domestic Insurers; Foreign Insurers; Alien Insurers

Marketing and Sales Practices - Needs-Based Selling (Suitability of Products, Full and Accurate Disclosure, Client Service Follow-up, Documentation); Prohibited Practices (Florida's Replacement Rule, Twisting, Churning, Misrepresentation, Misuse of Premiums, Rebating); Regulatory Associations (NAIC, State Guaranty Associations, NAIFA & NAHU)

Independent Rating Services - A.M. Best; Standard and Poor's; Moody's Investor Services; Fitch IBCA; Weiss Ratings

Lesson Review - Key Concepts; Quiz

The information contained in Lesson 1 can be found in
Units 1 and 2 of the Florida study manual.

IMPORTANT NOTICE

Prior to January 2015, the state examination will be based on the 28th edition of the Florida Life, Health, and Variable Annuity Study Manual. After January 2015, the state examination will be based on the 29th edition of the Life, Health, and Variable Contracts study manual. This course has been updated to reflect the latest changes.


Category: Annuity

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