Uniform Reciprocal Licensing Act

DEFINITION of 'Uniform Reciprocal Licensing Act'

A law that regulates unlicensed insurers. The uniform reciprocal licensing act allows the insurer's home state to revoke the insurer's license if deemed that they were unlicensed and doing business in another state. Insurance companies must be registerd and be licensed under the state they operate in.

BREAKING DOWN 'Uniform Reciprocal Licensing Act'

This act is used to protect the citizens of the state by ensuring the insurance companies are aware of and follow the regulations set out by the state they live in. It also exists to protect legitimate insurers from price undercutting by unlicensed insurance companies. Not all insurance companies fall under this act however, a few exceptions include reinsurers.

RELATED TERMS
  1. Admitted Company

    An insurance company that is domiciled in one state but is admitted ...
  2. State Guaranty Fund

    A fund administered by a U.S. state to protect policy holders ...
  3. Surplus Lines Insurance

    A policy that protects against a financial risk that is too high ...
  4. Bureau Rate

    A standard price per unit of insurance set by a state's insurance ...
  5. Licensed For Reinsurance Only

    A license that allows a company to engage in services related ...
  6. Early Warning Tests

    A series of financial ratios and other performance criteria used ...
Related Articles
  1. Personal Finance

    The History Of Insurance In America

    Insurance was a latecomer to the American landscape, largely due to the country's unknown risks.
  2. Personal Finance

    What Happens If Your Insurance Company Goes Bankrupt?

    When insurance companies go bankrupt or face financial difficulty, it's bad news for policy holders.
  3. Personal Finance

    Exploring Advanced Insurance Contract Fundamentals

    Understanding your contract can help you protect our family's financial security.
  4. Personal Finance

    Understanding Your Insurance Contract

    Learn how to read one of the most important documents you own.
  5. Personal Finance

    Bundle Your Insurance For Big Savings

    Bundling your insurance can save you money and time. Read on to see how get the most out of multiline insurance discounts.
  6. Personal Finance

    Explaining Insurance

    Insurance is a form of contract between an individual and an insurance company that spreads risk in exchange for premium payments.
  7. Financial Advisor

    Becoming An Insurance Agent

    Few careers match the opportunity for as quick and large a paycheck as does being a life insurance agent.
  8. Markets

    Insurance Companies Vs. Banks: Separate And Not Equal

    Insurance companies and banks are both financial intermediaries. However, they don't always face the same risks and are regulated by different authorities.
  9. Personal Finance

    Top 5 Car Insurance Companies in Texas (PGR, ALL)

    Examine the five biggest automobile insurance companies operating in the state of Texas, ranked based on market share in the state.
  10. Markets

    The 5 Biggest Canadian Insurance Companies

    Learn more about the insurance industry as a whole, how it functions in Canada, and the five largest Canada-based insurance companies.
RELATED FAQS
  1. Can your insurance company cancel your policy without notice?

    Learn about your rights as an insured when it comes to your insurance policy being canceled, including how to access your ... Read Answer >>
  2. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
  3. What are examples of the largest companies in the insurance sector?

    Read about some of the largest and most influential companies in the insurance sector, a list that includes Berkshire Hathaway ... Read Answer >>
  4. What is reinsurance?

    Reinsurance occurs when multiple insurance companies share risk by purchasing insurance policies from other insurers to limit ... Read Answer >>
  5. What demographic trends are creating potential profits for insurance companies?

    Discover the ways in which insurance companies can profit from demographic trends. Two major ones are aging populations and ... Read Answer >>
  6. What are some examples of when insurance bundling is a bad idea?

    Learn about situations where insurance bundling may not be a favorable option. Bundling insurance is often a good idea, but ... Read Answer >>
Hot Definitions
  1. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  2. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  3. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  4. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  5. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  6. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
Trading Center