Unauthorized Insurer

Definition of 'Unauthorized Insurer'


A company that poses as an authorized provider of a financial protection plan. Unauthorized insurers are fraudulent operations that take advantage of consumers and sometimes even insurance agents to collect "premiums" on nonexistent policies. Victims lose their premium money and find themselves exposed to large potential losses that would have been protected by a legitimate insurance policy.

Investopedia explains 'Unauthorized Insurer'


Sometimes even legitimate insurance agents can be duped by unauthorized insurers. When this happens, it puts the agent in a very bad situation. Even if the agent has unknowingly acted as a representative of the unauthorized insurer, he or she can be personally responsible for clients' outstanding claims, can be charged with committing a crime, can have his or her insurance license revoked and can be forced to pay a professional fine. Insurance agents can avoid such outcomes by checking with their state's department of insurance to find out if an insurer is licensed to sell the insurance product they are offering. Agents should take this step before selling their clients any policies from a particular insurer.



comments powered by Disqus
Hot Definitions
  1. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  2. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  3. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  4. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
  5. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico and Philippines.' Similar to BRIC (Brazil, Russia, India and China), the acronym was coined by and investor/economist to group fast-growing emerging market economies in similar states of economic development.
  6. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all of the plan’s risk – e.g.: retirement payment liabilities to former employee beneficiaries. The plan sponsor can do this by offering vested plan participants a lump-sum payment to voluntarily leave the plan, or by negotiating with an insurance company to take on the responsibility for paying benefits.
Trading Center