Representations and Warranties Representations are statements the applicant makes on an application that are deemed to be true to the applicant's best knowledge. Warranties are statements the insurer makes in the contract. Underwriting vs. Actuarial Departments Two related insurance company functions. Through the process of _________, applications are assessed for insurability and to assign premium rates. The ________ department analyzes data to help estimate future losses and to produce rate tables. Managerial System vs. General Agency System Two variations of the career agency system in which producers represent a single company. One is headed by a company employee called a general manager (GM), the other by an independent contractor called a general agent (GA). Fraternal Insurance Company A non-profit form of insurance provider sponsored by an organization of people who share a common ethnic, religious, or vocational affiliation. Peril and Hazard Two related general insurance terms: Peril is the immediate cause of a loss (and the event that is insured against). Hazard is any condition that increases the risk of incurring a loss. Contract of adhesion A type of contract in which one party (the offeror) drafts the terms that must be accepted as-is by the offeree. Insurance policies are this type. Mutual Insurance Company A form of insurance company that is owned by policyowners. May distribute policy dividends (non-taxable) through participating policies. Independent Agency System An insurance distribution system in which the manager and producers are fully independent and not affiliated with any single insurer.