Legal Concepts and Systems: A Glossary of Key Terms and Definitions, Exams of Law

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LOMA 311 CURRENT EXAM

Parliamentary democracy - ANSWER Countries in which the legislative branch of government has ultimate authority to make all legislation

Statutes - ANSWER The laws made by a legislature, usually that declare, command, or forbid something.

Statutory law - A law passed by the United States. Congress or state legislatures are made up of legislative enactments.

Congress is the legislative of the United States government, made up of the Senate and the House of Representatives.

US Code - ANSWER A compendium of all statutes passed by the United States. Congress

ANSWER The Office of the Secretary of State is a state institution in charge of licensing enterprises and businesses.

Regulations - ANSWER Rules or orders issued by administrative authorities that have the force and effect of law, as long as they do not contradict the underlying laws.

A treaty is a legally binding agreement between two or more nations that agree to abide by its terms.

Case law is the written decisions made by courts.

Substantive laws are laws that establish, define, and govern legal rights and obligations.

Procedural laws outline the procedures and methods used by courts to enforce substantive laws.

Appellate courts are permitted to examine lower court rulings.

ANSWER: A legal system based on English common law.

Doctrine of state decisis - ANSWER When a court determines that a specific legal principle applies to a particular set of facts, that principle is applied to all subsequent cases in which the facts are substantially the same. The decision in a previous case is termed precedent.

Civil law system - ANSWER A legal system based on the Roman legal system in which laws are codified into written codes established by the legislature.

Mixed legal systems are those that have components from more than one main type of legal system (common law and civil law).

Customary legal system - ANSWER Members of a community have acknowledged local customs as binding on its members.

The law enshrined in the Koran (or Qur'an) is unchanging. These legal systems frequently incorporate parts of common law, civil law, or both, as well as Islamic law.

District courts - ANSWER Sit in every state and territory and operate as trial courts with the authority to hear just specified sorts of cases as defined in the Constitution and various federal legislation.

ANSWER: Thirteen circuit courts of appeal have the authority to hear matters in which the decision of a district court within that circuit is appealed by one of the parties engaged in a trial.

The Supreme Court is the country's highest court. It overturns only select appeals from lower courts and cases involving any of the states or a foreign person, such as an ambassador.

ANSWER Lower-level state appellate court.

State Supreme Court - A higher-level state appellate court.

Regtech is a form of technology that helps regulators and businesses conduct regulatory and compliance activities more effectively and at a lower cost.

Default judgment - ANSWER A judgment entered against a defendant who fails to plead (submit an answer within the requisite time) or defend the claim.

Dismissal is a court ruling or judgment that ends a civil action without a trial of the issues involved.

Discovery is the process by which the parties to a civil dispute acquire pertinent information in order to prepare to present their claims at trial.

Interrogatories are written inquiries that one party prepares and the other party must respond to in writing within a certain time frame.

Affidavit - Answer: A written statement delivered under oath.

Perjury occurs when you knowingly give false testimony under oath. Considered a crime in all jurisdictions.

Deposition - Answer Attorneys interviewing parties and other witnesses verbally under oath.

Contempt of court - ANSWER Any conduct that impairs the court's ability to administer justice or diminishes the court's authority and dignity

An issue of law is one in which the parties dispute on how the law should be applied to a certain set of facts.

Issue of fact - ANSWER An issue in which the parties differ on the facts of the action

ANSWER The judge in a nonjury trial or the jury in a jury trial is responsible for determining issues of fact.

The burden of proof is the responsibility to offer evidence to prove a specific truth or group of facts. Second, the obligation to convince the trier of fact that a claimed fact is true.

A prima facie case is evidence that is adequate to substantiate the components of a party's case and that entitles the party to judicial remedy until the opposing party provides evidence to the contrary.

Preponderance of the evidence - ANSWER The level of proof required in a civil action that is backed by the greater weight of evidence. In a criminal action, the level of proof required is higher.

Conclusive presumption: A presumption that cannot be contested.

Presumption - ANSWER A losing rule in which a truth is presumed to be true because another fact or combination of facts was demonstrated.

Strict responsibility - ANSWER responsibility imposed by tort law regardless of whether the defendant was at fault - only applies in very limited situations that are particularly risky.

Compensatory damages are meant to reimburse an injured party for the monetary losses caused by the defendant's improper behavior.

Punitive damages, also known as exemplary damages, are awarded in addition to compensatory damages when a defendant's wrongful behavior was malicious or willful.

Nominal damages are granted when a plaintiff was mistreated but did not suffer a loss as a result of the wrong, and cannot prove the amount of the loss with reasonable

Laches - ANSWER When the plaintiff is unreasonably late in pursuing a claim for relief and the defendant was disadvantaged in some way as a result of the undue delay

Reformation is an equitable remedy in which a written contract is recast to express the original agreement of the contractual parties.

Recission - ANSWER An equitable remedy in which a contract is cancelled or retracted and the parties are returned to the situation they would have been in if no contract had been established.

Specific performance is an equitable remedy that forces a party who has breached a contract to carry it out in accordance with its terms.

Declaratory judgment - ANSWER A court pronouncement that declares or denies the parties' legal rights but does not provide specific relief or measures to enforce such rights.

Injunction - ANSWER A court order that forbids a party from committing a certain conduct, frequently given in circumstances when a defendant is committing or threatens to commit an act that may hurt the plaintiff.

ANSWER: Restitution is a legal or equitable remedy in which a party is required to return property to its owner or the person who is entitled to it.

Alternative Dispute Resolution (ADR) techniques - ANSWER Any nonjudicial way of settling civil disputes (such as arbitration or mediation)

Conciliation - ANSWER A dispute resolution approach similar to meditation in which the parties are urged to reach a mutually agreeable agreement; a third person supports the negotiations and helps them resolve the dispute themselves.

The NAIC Corporate Governance Annual Disclosure Act - ANSWER requires an insurer to report information about its corporate governance procedures to its state of domicile annually by June 1st.

Demutualization - ANSWER A mutual insurer is transformed into a stock insurer.

ANSWER: An aleatory contract is one in which one party delivers something of value to another in exchange for a conditional commitment.

Conditional promise - ANSWER A promise to execute a declared act if a specific, uncertain act occurs (typically something neither side can control, like as a natural disaster or death).

Contracts of adhesion - ANSWER Contracts that one party writes and that the other party must accept or reject as a whole, with no haggling over the contents.

Offer - ANSWER A proposal that, if accepted by someone according to its terms, forms a binding contract.

Freedom of contract - ANSWER Principle states that parties have the right to contract with whoever they choose on whatever lawful terms they choose.

Gratuitous promise - ANSWER A commitment made without consideration. It is unenforceable.

Past consideration - ANSWER A commitment made in recompense for previous actions or events.

Preexisting duty - ANSWER A promise to perform what one has a legal obligation to accomplish. Not considered adequate attention.

Necessary - ANSWER Goods and services that a juvenile or other incompetent person requires to maintain their well-being. These contracts are not voidable by minors.

Disaffirmance - ANSWER A minor exercising their right to avoid a contract.

Caveat emptor - Answer: Let the buyer beware.

Accord and satisfaction - ANSWER When one party accepts anything other than what they were entitled to get under the original contract.

Statute of Frauds - ANSWER A legislation that considers certain sorts of contracts invalid unless they are evidenced by a written document signed by the person entrusted with carrying out the deal.

ANSWER: The parol evidence rule states that it is not admissible to add to, change, or contradict the terms of a written agreement.

ANSWER The rights, obligations, and liabilities that exist between the parties when an agent represents a principal in dealings with third parties.

Apparent authority - ANSWER Authority that is not formally granted on an agent or tacitly included with that express authority, but which the principal purposefully

Agency at will - ANSWER An agency partnership that will last for an indefinite period of time. Can be terminated by stated time of notice, or reasonable notice if not mentioned.

A security interest is a claim against a debtor's property that allows a creditor to take ownership of it if the debtor fails to repay the underlying loan.

Accession - ANSWER A person normally has the right to all that his property has produced, as well as anything added to or united with the property.

ANSWER: The power to create rules that promote public health, safety, and welfare (zoning regulations, building codes).

Intervivos transfers - ANSWER Transfers made during the property owner's lifetime

Testamentary transfers occur following a property owner's death.

Testator - ANSWER The person who creates a will.

ANSWER: A testamentary document that supplements a will.

Intestate - ANSWER A person dies without a valid will. A

Executor - ANSWER The personal representative in charge of settling the decedent's estate.

Administrator - ANSWER The personal representative appointed by the court to settle the decedent's inheritance

Copyright - ANSWER A right granted by statute to the author or inventor of an original literary or artistic work, giving the copyright holder the exclusive right to publish, create, or perform the right for a specified time.

Fair use doctrine is a legal doctrine that allows others to use certain portions of a copyrighted work for criticism, comment, new reporting, teaching, scholarship, or research.

A patent is a government grant of property rights to the inventor or creator of an original procedure, machine, manufactured object, or chemical composition.

A trademark is a term, phrase, symbol, design, or combination thereof that identifies and distinguishes one party's goods from those of another.

ANSWER: A service mark is similar to a trademark, except it identifies and differentiates the source of a service rather than commodities.

The Uniform Commercial Code (UCC) is a model legislation developed by the American legislation Institute and the National Conference of Commissioners to oversee commercial activities.

Restrictive endorsement - ANSWER An endorsement by signature containing instructions on how to operate the instrument.

Holder in due process - ANSWER One who acquires a negotiable instrument in good faith and for compensation, without knowledge of any defenses or claims against its payment, and so gains certain rights over the original payee.

Secured party - ANSWER A creditor who acquires a security interest in a debtor's property.

A financing statement is a document submitted with a specific state or local government authority to record the existence of a security interest in a debtor's identifiable property.

Preemption is a legal doctrine that states that certain subjects are of such national importance that federal laws take precedence over conflicting state laws.

The McCarran-Ferguson Act - ANSWER gives the states main authority to regulate insurance as long as Congress judges such state regulation appropriate.

Annual statement - ANSWER A thorough financial report that insurers must file with the NAIC and all states in which they are licensed on March 1st of each year.

ANSWER: The National Council of Insurance Regulators (NCOIL) is mostly made up of state legislators who serve on legislative insurance committees.

Admitted assets are assets that an insurer may include in its annual statement. All others are known as non-admitted assets.

Risk-based capital (RBC) ratio requirements - ANSWER Allow regulators to assess the adequacy of an insurer's capital in relation to the riskiness of its operations.

Receivership (conservatorship) - ANSWER The state takes over and manages the insurer's assets and obligations. The receiver is tasked for creating a plan to conserve and control assets while fulfilling the insurer's obligations.

Guaranty association - ANSWER An organization that acts to safeguard policyowners, insureds, beneficiaries, annuitants, payees, and assignees from losses that may come from a life or health insurer's impairment or insolvency.

Gramm-Leach-Bliley Act (GLBA) - ANSWER A US federal law that allows financial institutions to affiliate, resulting in a more competitive and integrated financial services market.

The Dodd-Frank Wall Street Reform and Consumer Protection Act is a US federal law that regulates the financial services industry, enhances accountability and transparency, and protects consumers from abusive tactics.

Systemically important financial institutions include banks and non-banks, including insurers, whose failure could represent a risk to the financial system.

Policy dividends provision - ANSWER Describes how an owner of a participating policy can obtain policy dividends.

The free look provision gives the policyholder a period of time (typically 10 days) after policy delivery to cancel the policy and obtain a return of all premiums paid.

Reinstatement provision - ANSWER Describes the criteria the policyholder must follow to restore the policy after a lapse.

System for Electronic Rate and Form Filing (SERFF) - ANSWER An electronic filing system operated by the NAIC that allows insurers to evaluate each participating insurance department's policy filing requirements.

Interstate Insurance Production Regulation Commission (IIPRC) - ANSWER A multistate public institution that works alongside state insurance departments.

Reciprocity - ANSWER An agreement between two states in which each offers citizens of the other state specific advantages.

Uniform Electronic Transactions Act (UETA) - ANSWER Model law developed by the National Conference of Commissions on Uniform State Laws (NCCUSL) to ensure the effectiveness of electronic signatures

The Age Discrimination in workplace Act (ADEA) - ANSWER Act forbids workplace discrimination against people over the age of 40. Allows businesses to lower the amount of some group life insurance benefits so that the cost of providing

these benefits to older workers is no greater than the cost of providing full benefits to younger workers.

Constructive delivery - ANSWER A legally adequate delivery of a life insurance policy that occurs when the insurer gives up control of the policy and intends to be obliged by the terms of the contract.

A closed contract is one in which only the terms and conditions printed in or attached to the contract are regarded to be part of the agreement.

Open contract - ANSWER A contract that identifies the papers that make up the contract between the parties, but not all of the documents listed are necessarily attached to the contract. issued by fraternal insurers.

A condition that must exist before one party is obligated to fulfill a promise.

a condition that, if it occurs, cancels one party's obligation to perform a commitment.

Conditional premium receipt - ANSWER Offers temporary insurance coverage only when certain requirements are met.

insurability premium receipt - ANSWER Provides temporary insurance coverage if the insurer determines that the proposed insured is insurable as a standard or preferred risk