LESSON 1: BASIC PRINCIPLES OF LIFE AND HEALTH INSURANCE and THE INSURANCE INDUSTRY
The following subjects are contained within Lesson 1:
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; The Armstrong Investigation; 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
Chapters 1 and 2 of the Florida study manual.
IMPORTANT NOTICE
Prior to January 2010, the state examination will be based on the 23rd edition of the Florida Life, Health, and Variable Annuity Study Manual. After January 2010, the state examination will be based on the 24th edition of the study manual. Most of the changes concern statistical updates (2008 figures vs. 2009 figures, which are the latest available for publication). This course has been updated to reflect the latest changes.
