{"id":5786,"date":"2024-05-02T13:38:22","date_gmt":"2024-05-02T13:38:22","guid":{"rendered":"https:\/\/swflinsurance.com\/?page_id=5786"},"modified":"2024-07-26T06:27:24","modified_gmt":"2024-07-26T06:27:24","slug":"insurance-glossary","status":"publish","type":"page","link":"https:\/\/swflinsurance.com\/insurance-glossary\/","title":{"rendered":"Insurance Glossary"},"content":{"rendered":"\t\t
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Insurance Glossary<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Insurance terms and definitions from SWFL Insurance.<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tCoverages and benefits listed below may not be available in your state. If available, some optional coverages and benefits might be offered at an additional charge. Contact SWFL Insurance today<\/a> to learn more.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Accident \u2013 an unexpected event or circumstance without deliberate intent.<\/p>

Accident Insurance \u2013 insurance for unforeseen bodily injury.<\/p>

Accident Only \u2013 an insurance contract that provides coverage, singly or in combination, for death, dismemberment, disability, or hospital and medical care caused by or necessitated as a result of accident or specified kinds of accident.<\/p>

Accident Only or AD&D \u2013 policies providing coverage, singly or in combination, for death, dismemberment, disability, or hospital and medical care caused by or necessitated as a result of accident or specified kinds of accidents. Types of coverage include student accident, sports accident, travel accident, blanket accident, specific accident or accidental death and dismemberment (AD&D).<\/p>

Accidental Bodily Injury \u2013 unexpected injury to a person.<\/p>

Accidental Death & Dismemberment \u2013 an insurance contract that pays a stated benefit in the event of death and\/or dismemberment caused by accident or specified kinds of accidents.<\/p>

Accumulation Period \u2013 period of time insured must incur eligible medical expenses at least equal to the deductible amount in order to establish a benefit period under a major medical expense or comprehensive medical expense policy.<\/p>

Actual Cash Value \u2013 repayment value for indemnification due to loss or damage of property; in most cases it is replacement cost minus depreciation<\/p>

Actuarial Report \u2013 (PC Insurance)a document or other presentation, prepared as a formal means of conveying to the state regulatory authority and the Board of Directors, or its equivalent, the actuary’s professional conclusions and recommendations, of recording and communicating the methods and procedures, of assuring that the parties addressed are aware of the significance of the actuary’s opinion or findings and that documents the analysis underlying the opinion. (In Life and Health) this document would be called an “Actuarial Memorandum.”<\/p>

Actuary \u2013 business professional who analyzes probabilities of risk and risk management including calculation of premiums, dividends and other applicable insurance industry standards.<\/p>

Adjuster \u2013 a person who investigates claims and recommends settlement options based on estimates of damage and insurance policies held.<\/p>

Admission \u2013 hospital inpatient care for any medical condition.<\/p>

Admitted Assets \u2013 insurer assets which can be valued and included on the balance sheet to determine financial viability of the company.<\/p>

Admitted Company \u2013 an insurance company licensed to do business in a state(s), domiciled in an alternative state or country.<\/p>

Advance Premiums \u2013 occur when a policy has been processed, and the premium has been paid prior to the effective date. These are a liability to the company and not included in written premium or the unearned premium reserve.<\/p>

Adverse Selection \u2013 the social phenomenon whereby persons with a higher than average probability of loss seek greater insurance coverage than those with less risk.<\/p>

Advisory Organization \u2013 a group supported by member companies whose function is to gather loss statistics and publish trended loss costs.<\/p>

Affiliate \u2013 a person or entity that directly, or indirectly, through one or more other persons or entities, controls, is controlled by or is under common control with the insurer.<\/p>

Agent \u2013 an individual who sells, services, or negotiates insurance policies either on behalf of a company or independently.<\/p>

Aggregate \u2013 the maximum dollar amount or total amount of coverage payable for a single loss, or multiple losses, during a policy period, or on a single project.<\/p>

Aggregate Cost Payments \u2013 method of reimbursement of a health plan with a corporate entity that directly provides care, where (1) the health plan is contractually required to pay the total operating costs of the corporate entity, less any income to the entity from other users of services, and (2) there are mutual unlimited guarantees of solvency between the entity and the health plan that put their respective capital and surplus at risk in guaranteeing each other.<\/p>

Aircraft \u2013 coverage for aircraft (hull) and their contents; aircraft owners’ and aircraft manufacturers liability to passengers, airports and other third parties.<\/p>

ALAE \u2013 an estimate of the claims settlement associated with a particular claim or claims.<\/p>

Alien Company \u2013 an insurance company formed according to the laws of a foreign country. The company must conform to state regulatory standards to legally sell insurance products in that state.<\/p>

Allied Lines \u2013 coverages which are generally written with property insurance, e.g., glass, tornado, windstorm and hail; sprinkler and water damage; explosion, riot, and civil commotion; growing crops; flood; rain; and damage from aircraft and vehicle, etc.<\/p>

All-Risk \u2013 also known as open peril, this type of policy covers a broad range of losses. The policy covers risks not explicitly excluded in the policy contract.<\/p>

Alternative Workers’ Compensation \u2013 other than standard workers’ compensation coverage, employer’s liability and excess workers’ compensation (e.g., large deductible, managed care).<\/p>

Ambulatory Services \u2013 health services provided to members who are not confined to a health care institution. Ambulatory services are often referred to as “outpatient” services.<\/p>

Annual Statement \u2013 an annual report required to be filed with each state in which an insurer does business. This report provides a snapshot of the financial condition of a company and significant events which occurred throughout the reporting year.<\/p>

Annuitant \u2013 the beneficiary of an annuity payment, or person during whose life and annuity is payable.<\/p>

Annuities \u2013 Immediate Non-variable \u2013 an annuity contract that provides for the fixed payment of the annuity at the end of the first interval of payment after purchase. The interval may vary, however the annuity payouts must begin within 13 months.<\/p>

Annuity \u2013 a contract providing income for a specified period of time, or duration of life for a person or persons.<\/p>

Appraisal \u2013 an estimate of value.<\/p>

Arbitration \u2013 a binding dispute resolution tactic whereby a conciliator with no interest in the outcome intercedes.<\/p>

Assessed Value \u2013 estimated value for real or personal property established by a taxing entity<\/p>

Asset \u2013 probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events. An asset has three essential characteristics: It embodies a probable future benefit that involves a capacity, singly or in combination with other assets, to contribute directly or indirectly to future net cash inflows; A particular entity can obtain the benefit and control others’ access to it; and The transaction or other event-giving rise to the entity’s right to or control of the benefit has already occurred.<\/p>

Asset Risk \u2013 in the risk-based capital formula, risk assigned to the company’s assets.<\/p>

Assigned Risk \u2013 A governmental pool established to write business declined by carriers in the standard insurance market.<\/p>

Assisted Living Care \u2013 a policy or rider that provides coverage only while a policyholder is confined to an assisted living facility and meets the policy requirements for coverage.<\/p>

Assumed Reinsurance \u2013 the assumption of risk from another insurance entity within a reinsurance agreement or treaty.<\/p>

Authorized Company \u2013 an insurer licensed or admitted to do business in a particular state.<\/p>

Authorized Control Level Risk Based Capital \u2013 theoretical amount of capital plus surplus an insurance company should maintain.<\/p>

Authorized Reinsurance \u2013 reinsurance placed with a reinsurer who is licensed or otherwise allowed to conduct reinsurance within a state.<\/p>

Auto Liability \u2013 coverage that can help protect against financial loss because of legal liability for motor vehicle related injuries (bodily injury and medical payments) or damage to the property of others caused by accidents arising out of ownership, maintenance or use of a motor vehicle (including recreational vehicles such as motor homes). Commercial is defined as all motor vehicle policies that include vehicles that are used primarily in connection with business, commercial establishments, activity, employment, or activities carried on for gain or profit. No Fault is defined by the state concerned.<\/p>

Auto Physical Damage \u2013 motor vehicle insurance coverage (including collision, vandalism, fire and theft) that insures against material damage to the insured’s vehicle. Commercial is defined as all motor vehicle policies that include vehicles that are used in connection with business, commercial establishments, activity, employment, or activities carried on for gain or profit.<\/p>

Automobile Liability Insurance \u2013 coverage for bodily injury and property damage incurred through ownership or operation of a vehicle.<\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t

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Balance Sheet \u2013 accounting statement showing the financial condition of a company at a particular date.
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\n BCEGS \u2013 Building Code Effectiveness Grading Schedule \u2013 classification system for assessment of building codes per geographic region with special emphasis on mitigation of losses from natural disasters.
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\n Beneficiary \u2013 an individual who may become eligible to receive payment due to will, life insurance policy, retirement plan, annuity, trust, or other contract.
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\n Benefits (Medical & Hospital Expenses) \u2013 total expenditures for health care services paid to or on behalf of a member.
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\n Blanket coverage \u2013 coverage for property and liability that extends to more than one location, class of property or employee.
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\n Boatowners\/Personal Watercraft \u2013 covers damage to pleasure boats, motors, trailers, boating equipment and personal watercraft as well as bodily injury and property damage liability to others.
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\n Bodily Injury \u2013 physical injury including sickness or disease to a person.
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\n Boiler & Machinery or Equipment Breakdown & Machinery \u2013 coverage for the failure of boilers, machinery and other electrical equipment. Benefits include (i) property of the insured, which has been directly damaged by the accident; (ii) costs of temporary repairs and expediting expenses; and (iii) liability for damage to the property of others. Coverage also includes inspection of the equipment.
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\n Bonds \u2013 a form of debt security whereby the debt holder has a creditor stake in the company. Obligations issued by business units, governmental units and certain nonprofit units having a fixed schedule for one or more future payments of money; includes commercial paper, negotiable certificates of deposit, repurchase agreements and equipment trust certificates.
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\n Book Value \u2013 original cost, including capitalized acquisition costs and accumulated depreciation, unamortized premium and discount, deferred origination and commitment fees, direct write-downs, and increase\/decrease by adjustment.
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\n Broker \u2013 an individual who receives commissions from the sale and service of insurance policies. These individuals work on behalf of the customer and are not restricted to selling policies for a specific company but commissions are paid by the company with which the sale was made.
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\n Builders\u2019 Risk Policies \u2013 typically written on a reporting or completed value form, this coverage insures against loss to buildings in the course of construction. The coverage also includes machinery and equipment used in the course of construction and to materials incidental to construction.
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\n Burglary and Theft \u2013 coverage for property taken or destroyed by breaking and entering the insured\u2019s premises, burglary or theft, forgery or counterfeiting, fraud, kidnap and ransom, and off-premises exposure.
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\n Business Auto \u2013 coverage for motor vehicles, other than those in the garage business, engaged in commerce. Business auto filings include singularly or in any combination coverage such as the following: Auto Liability, PIP, MP, Uninsured Motorist and\/or Underinsured Motorists (UM\/UIM); Specified Causes of Loss, Comprehensive, and Collision.
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\n Business Interruption \u2013 loss of income as a result of property damage to a business facility.
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\n Business owners Policy \u2013 business insurance typically for property, liability and business interruption coverage.
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Calendar Year Deductible \u2013 in health insurance, the amount that must be paid by the insured during a calendar year before the insurer becomes responsible for further loss costs.<\/p>

Capital and Surplus \u2013 a company’s assets minus its liabilities.<\/p>

Capital and Surplus Requirement \u2013 statutory requirement ordering companies to maintain their capital and surplus at an amount equal to or in excess of a specified amount to help assure the solvency of the company by providing a financial cushion against expected loss or misjudgments and generally measured as a company’s admitted assets minus its liabilities, determined on a statutory accounting basis.<\/p>

Capital Gains (Loss) \u2013 excess (deficiency) of the sales price of an asset over its book value. Calculated on the basis of original cost adjusted, as appropriate, for accrual of discount or amortization of premium and for depreciation.<\/p>

Capitation Arrangement \u2013 a compensation plan used in connection with some managed care contracts where a physician or other medical provider is paid a flat amount, usually on a monthly basis, for each subscriber who has elected to use that physician or medical provider. Capitated payments are sometimes expressed in terms of a “per member\/per month” payment. The capitated provider is generally responsible, under the conditions of the contract, for delivering or arranging for the delivery of all contracted health services required by the covered person.<\/p>

Captive Agent \u2013 an individual who sells or services insurance contracts for a specific insurer or fleet of insurers.<\/p>

Captive Insurer \u2013 an insurance company established by a parent firm for the purpose of insuring the parent’s exposures.<\/p>

Carrying Value (Amount) \u2013 the SAP book value plus accrued interest and reduced by any valuation allowance and any nonadmitted adjustment applied to the individual investment.<\/p>

Cash \u2013 a medium of exchange.<\/p>

Cash Equivalent \u2013 short-term, highly liquid investments that are both (a) readily convertible to known amounts of cash, and (b) so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Investments with original maturities of three months or less qualify under this definition.<\/p>

Casualty Insurance \u2013 a form of liability insurance providing coverage for negligent acts and omissions such as workers compensation, errors and omissions, fidelity, crime, glass, boiler, and various malpractice coverages.<\/p>

Catastrophe Bonds \u2013 Bonds issued by an insurance company with funding tied to the company’s losses from disasters, or acts of God. A loss exceeding a certain size triggers a reduction in the bond value or a change in the bond structure as loss payments are paid out of bond funds.<\/p>

Catastrophe Loss \u2013 a large magnitude loss with little ability to forecast.<\/p>

Ceded Premium \u2013 amount of premium (fees) used to purchase reinsurance.<\/p>

Ceding Company \u2013 an insurance company that transfers risk by purchasing reinsurance.<\/p>

Centers for Medicare & Medicaid Services (CMS) \u2013 U.S. governmental agency responsible for the licensing of federally qualified HMOs. This was formerly the Health Care Financing Administration.<\/p>

Change in Valuation Basis \u2013 a change in the interest rate, mortality assumption or reserving method or other factors affecting the reserve computation of policies in force.<\/p>

Chartered Life Underwriter (CLU) \u2013 a professional designation awarded by the American College to persons in the life insurance field who pass a series of exams in insurance, investment, taxation, employee benefit plans, estate planning, accounting, management, and economics.<\/p>

Chartered Property Casualty Underwriter (CPCU) \u2013 a professional designation awarded by the American Institute of Property and Casualty Underwriters to persons in the property and liability insurance field who pass a series of exams in insurance, risk management, economics, finance, management, accounting, and law. Designates must also have at least three years experience in the insurance business or related field.<\/p>

Claim \u2013 a request made by the insured for insurer remittance of payment due to loss incurred and covered under the policy agreement.<\/p>

Claims Adjustment Expenses \u2013 costs expected to be incurred in connection with the adjustment and recording of accident and health, auto medical and workers’ compensation claims.<\/p>

Claims-made Form \u2013 A type of liability insurance form that only pays if the both event that causes (triggers)the claim and the actual claim are submitted to the insurance company during the policy term<\/p>

Class Rating \u2013 a method of determining rates for all applicants within a given set of characteristics such as personal demographic and geographic location.<\/p>

Coinsurance \u2013 A clause contained in most property insurance policies to encourage policy holders to carry a reasonable amount of insurance. If the insured fails to maintain the amount specified in the clause (Usually at least 80%), the insured shares a higher proportion of the loss. In medical insurance a percentage of each claim that the insured will bear.<\/p>

Collar \u2013 an agreement to receive payments as the buyer of an Option, Cap or Floor and to make payments as the seller of a different Option, Cap or Floor.<\/p>

Collateral Loans \u2013 unconditional obligations for the payment of money secured by the pledge of an investment.<\/p>

Collateralized Bond Obligations (CBOs) \u2013 an investment-grade bond backed by a pool of low-grade debt securities, such as junk bonds, separated into tranches based on various levels of credit risk.<\/p>

Collateralized Mortgage Obligations (CMOs) \u2013 a type of mortgage-backed security (MBS) with separate pools of pass-through security mortgages that contain varying classes of holders and maturities (tranches) with the advantage of predictable cash flow patterns.<\/p>

Combinations \u2013 a special form of package policy composed of personal automobile and homeowners insurance.<\/p>

Combined Ratio \u2013 an indication of the profitability of an insurance company, calculated by adding the loss and expense ratios.<\/p>

Commencement Date \u2013 date when the organization first became obligated for any insurance risk via the issuance of policies and\/or entering into a reinsurance agreement. Same as “effective date” of coverage.<\/p>

Commercial Auto \u2013 coverage for motor vehicles owned by a business engaged in commerce that can help protect the insured against financial loss because of legal liability for motor vehicle related injuries, or damage to the property of others caused by accidents arising out of the ownership, maintenance, use, or care-custody & control of a motor vehicle. This includes Commercial Auto Combinations of Business Auto, Garage, Truckers and\/or Other Commercial Auto.<\/p>

Commercial Earthquake \u2013 earthquake property coverage for commercial ventures.<\/p>

Commercial Farm and Ranch \u2013 a commercial package policy for farming and ranching risks that includes both property and liability coverage. Coverage includes barns, stables, other farm structures and farm inland marine, such as mobile equipment and livestock.<\/p>

Commercial Flood \u2013 separate flood insurance policy sold to commercial ventures.<\/p>

Commercial General Liability \u2013 flexible & broad commercial liability coverage with two major sub-lines: premises\/operations sub-line and products\/completed operations sub-line.<\/p>

Commercial Mortgage-Backed Securities \u2013 a type of mortgage-backed security that is secured by the loan on a commercial property.<\/p>

Commercial Multiple Peril \u2013 policy that packages two or more insurance coverages protecting an enterprise from various property and liability risk exposures. Frequently includes fire, allied lines, various other coverages (e.g., difference in conditions) and liability coverage. Such coverages would be included in other annual statement lines, if written individually. Include under this type of insurance multi-peril policies (other than farmowners, homeowners and automobile policies) that include coverage for liability other than auto.<\/p>

Commercial Package Policy \u2013 provides a broad package of property and liability coverages for commercial ventures other than those provided insurance through a business owners policy.<\/p>

Commercial Property \u2013 property insurance coverage sold to commercial ventures.<\/p>

Commission \u2013 a percentage of premium paid to agents by insurance companies for the sale of policies.<\/p>

Community Rating \u2013 a rating system where standard rating is established and usually adjusted within specific guidelines for each group on the basis of anticipated utilization by the group’s employees.<\/p>

Company Code \u2013 a five-digit identifying number assigned by NAIC, assigned to all insurance companies filing financial data with NAIC.<\/p>

Completed Operations Liability \u2013 policies covering the liability of contractors, plumbers, electricians, repair shops, and similar firms to persons who have incurred bodily injury or property damage from defective work or operations completed or abandoned by or for the insured, away from the insured’s premises.<\/p>

Comprehensive (Hospital and Medical) \u2013 line of business providing for medical coverages; includes hospital, surgical, major medical coverages; does not include Medicare Supplement, administrative services (ASC) contracts, administrative services only (ASO) contracts, federal employees health benefit plans (FEHBP), medical only programs, Medicare and Medicaid programs, vision only and dental only business.<\/p>

Commercial General Liability (CGL) \u2013 coverage for business liabilities unless specifically excluded in the policy contract.<\/p>

Personal Liability \u2013 liability coverage for exposures arising out of the residence premises and activities of individuals and family members. (Non-business liability exposure protection for individuals.)<\/p>

Comprehensive\/Major Medical \u2013 policies that provide fully insured indemnity, HMO, PPO, or Fee for Service coverage for hospital, medical, and surgical expenses. Coverage excludes Short-Term Medical Insurance, the Federal Employees Health Benefit Program and non-comprehensive coverage such as basic hospital only, medical only, hospital confinement indemnity, surgical, outpatient indemnity, specified disease, intensive care, and organ and tissue transplant coverage.<\/p>

Concurrent Causation \u2013 property loss incurred from two or more perils in which only one loss is covered but both are paid by the insurer due to simultaneous incident.<\/p>

Conditions \u2013 requirements specified in the insurance contract that must be upheld by the insured to qualify for indemnification.<\/p>

Condos \u2013 homeowners insurance sold to condominium owners occupying the described property.<\/p>

Construction and Alteration Liability \u2013 covering the liability of an insured to persons who have incurred bodily injury or property damage from alterations involving demolition, new construction or change in size of a structure on the insured’s premises.<\/p>

Contingency Reserves \u2013 required by some jurisdictions as a hedge against adverse experience from operations, particularly adverse claim experience.<\/p>

Contingent Liability \u2013 the liability of an insured to persons who have incurred bodily injury or property damage from work done by an independent contractor hired by the insured to perform work that was illegal, inherently dangerous, or directly supervised by the insured<\/p>

Continuation of Care Requirement \u2013 statutory or contractual provision requiring providers to deliver care to an enrollee for some period following the date of a Health Plan Company’s insolvency.<\/p>

Continuing Care Retirement Communities \u2013 senior housing arrangements that in addition to housing include some provision for skilled nursing care.<\/p>

Contract Reserves \u2013 reserves set up when, due to the gross premium structure, the future benefits exceed the future net premium. Contract reserves are in addition to claim and premium reserves.<\/p>

Contractual Liability \u2013 liability coverage of an insured who has assumed the legal liability of another party by written or oral contract. Includes a contractual liability policy providing coverage for all obligations and liabilities incurred by a service contract provider under the terms of service contracts issued by the provider.<\/p>

Convertible Term Insurance Policy \u2013 an insurance policy that can be converted into permanent insurance without a medical assessment. The insurer is required to renew the policy regardless of the health of the insured subject to policy conditions.<\/p>

Coordination of Benefits (COB) \u2013 provision to eliminate over insurance and establish a prompt and orderly claims payment system when a person is covered by more than one group insurance and\/or group service plan.<\/p>

Copay \u2013 a cost sharing mechanism in group insurance plans where the insured pays a specified dollar amount of incurred medical expenses and the insurer pays the remainder.<\/p>

Corrective Order \u2013 commissioner’s directive of action to be completed by an insurer.<\/p>

Covered Lives \u2013 The total number of lives insured, including dependents, under individual policies and group certificates.<\/p>

Credit \u2013 individual or group policies that provide benefits to a debtor for full or partial repayment of debt associated with a specific loan or other credit transaction upon disability or involuntary unemployment of debtor, except in connection with first mortgage loans.<\/p>

Credit \u2013 Assumption Agreement \u2013 an insurance certificate issued on an existing insurance contract indicating that another insurer has assumed all of the risk under the contract from the ceding insurance company.<\/p>

Credit \u2013 Credit Default \u2013 coverage purchased by manufacturers, merchants, educational institutions, or other providers of goods and services extending credit, for indemnification of losses or damages resulting from the nonpayment of debts owed to them for goods or services provided in the normal course of their business.<\/p>

Credit \u2013 Involuntary Unemployment \u2013 makes loan\/credit transaction payments to the creditor when the debtor becomes involuntarily unemployed.<\/p>

Credit Accident and Health (group and individual) \u2013 coverage provided to or offered to borrowers in connection with a consumer credit transaction where the proceeds are used to repay a debt or an installment loan in the event the consumer is disabled as the result of an accident, including business not exceeding 120 months duration.<\/p>

Credit Disability \u2013 makes monthly loan\/credit transaction payments to the creditor upon the disablement of an insured debtor.<\/p>

Credit Health Insurance \u2013 policy assigning creditor as beneficiary for insurance on a debtor thereby remitting balance of payment to creditor should the debtor become disabled.<\/p>

Credit Involuntary Unemployment \u2013 credit insurance that provides a monthly or lump sum benefit during an unpaid leave of absence from employment resulting from specified causes, such as layoff, business closure, strike, illness of a close relative and adoption or birth of a child. This insurance is sometimes referred to as Credit Family Leave.<\/p>

Credit Life Insurance \u2013 policy assigning creditor as beneficiary for insurance on a debtor thereby remitting balance of payment to creditor upon death of debtor.<\/p>

Credit Personal Property Insurance \u2013 insurance written in connection with a credit transaction where the collateral is not a motor vehicle, mobile home or real estate and that covers perils to the goods purchased through a credit transaction or used as collateral for a credit transaction and that concerns a creditor’s interest in the purchased goods or pledged collateral, either in whole or in part; or covers perils to goods purchased in connection with an open-end transaction.<\/p>

Credit Placed Insurance \u2013 insurance that is purchased unilaterally by the creditor, who is the named insured, subsequent to the date of the credit transaction, providing coverage against loss, expense or damage to property as a result of fire, theft, collision or other risks of loss that would either impair a creditor’s interest or adversely affect the value of collateral. “Creditor Placed Home” means “Creditor Placed Insurance” on homes, mobile homes and other real estate. “Creditor Placed Auto” means insurance on automobiles, boats or other vehicles.<\/p>

Credit Risk \u2013 part of the risk-based capital formula that addresses the collectability of a company’s receivables and the risk of losing a provider or intermediary that has received advance capitation payments.<\/p>

Creditor-Placed Auto \u2013 single interest or dual interest credit insurance that is purchased unilaterally by the creditor, who is the named insured, subsequent to the date of the credit transaction, providing coverage against loss to property that would either impair a creditor’s interest or adversely affect the value of collateral on automobiles, boats, or other vehicles.<\/p>

Creditor-Placed Home \u2013 single interest or dual interest credit insurance purchased unilaterally by the creditor, who is the named insured, subsequent to the date of the credit transaction, providing coverage against loss to property that would either impair a creditor’s interest or adversely affect the value of collateral on homes, mobile homes, and other real estate.<\/p>

Crop \u2013 coverage protecting the insured against loss or damage to crops from a variety of perils, including but not limited to fire, lightening, loss of revenue, tornado, windstorm, hail, flood, rain, or damage by insects.<\/p>

Crop-Hail Insurance \u2013 coverage for crop damage due to hail, fire or lightning.<\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t

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Date of Issue \u2013 date when an insurance company issues a policy.
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\n Declarations \u2013 policy statements regarding the applicant and property covered such as demographic and occupational information, property specifications and expected mileage per year .
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\n Deductible \u2013 Portion of the insured loss (in dollars) paid by the policy holder
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\n Deferred Annuity \u2013 annuity payment to be made as a single payment or a series of installments to begin at some future date, such as in a specified number of years or at a specified age.
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\n Demutualization \u2013 conversion of a mutual insurance company to a capital stock company.
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\n Dental Insurance \u2013 policies providing only dental treatment benefits such as routine dental examinations, preventive dental work, and dental procedures needed to treat tooth decay and diseases of the teeth and jaw.
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\n Dental Only \u2013 line of business providing dental only coverage; coverage can be on a stand-alone basis or as a rider to a medical policy. If the coverage is as a rider, deductibles or out-of-pocket limits must be set separately from the medical coverage. Does not include self-insured business as well as FEHBP or Medicare and Medicaid programs.
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\n Derivative \u2013 securities priced according to the value of other financial instruments such as commodity prices, interest rates, stock market prices, foreign or exchange rates.
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\n Difference In Conditions (DIC) Insurance \u2013 special form of open-peril coverage written in conjunction with basic fire coverage and designed to provide protection against losses not reimbursed under the standard fire forms. Examples are flood and earthquake coverage.
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\n Direct Incurred Loss \u2013 loss whereby the proximate cause is equivalent to the insured peril.
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\n Direct Loss \u2013 Damage to covered real or personal property caused by a covered peril.
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\n Direct Writer \u2013 an insurance company that sells policies to the insured through salaried representatives or exclusive agents only; reinsurance companies that deal directly with ceding companies instead of using brokers.
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\n Direct Written Premium \u2013 total premiums received by an insurance company without any adjustments for the ceding of any portion of these premiums to the Reinsurer.
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\n Directors & Officers Liability \u2013 liability coverage protecting directors or officers of a corporation from liability arising out of the performance of their professional duties on behalf of the corporation.
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\n Disability Income \u2013 a policy designed to compensate insured individuals for a portion of the income they lose because of a disabling injury or illness.
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\n Disability Income \u2013 Long-Term \u2013 policies that provide a weekly or monthly income benefit for more than five years for individual coverage and more than one year for group coverage for full or partial disability arising from accident and\/or sickness.
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\n Disability Income \u2013 Short-Term \u2013 policies that provide a weekly or monthly income benefit for up to five years for individual coverage and up to one year for group coverage for full or partial disability arising from accident and\/or sickness.
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\n Dividend \u2013 a refund of a portion of the premium paid by the insured from insurer surplus.
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\n Domestic Insurer \u2013 an insurance company that is domiciled and licensed in the state in which it sells insurance.
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\n Dual Interest \u2013 insurance that protects the creditor\u2019s and the debtor\u2019s interest in the collateral securing the debtor\u2019s credit transaction. \u201cDual Interest\u201d includes insurance commonly referred to as \u201cLimited Dual Interest.\u201d
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\n Dwelling Property\/Personal Liability \u2013 a special form of package policy composed of dwelling fire and\/or allied lines, and personal liability insurance.<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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Early warning system \u2013 a system designed by insurance industry regulators of identifying practices and risk-related trends that contribute to systemic risk by measuring insurer’ financial stability.<\/p>

Earned Premium \u2013 portion of insured’s prepaid premium allocated to the insurance company’s loss experience, expenses, and profit year- to -date.<\/p>

Earthquake \u2013 property coverages for losses resulting from a sudden trembling or shaking of the earth, including that caused by volcanic eruption. Excluded are losses resulting from fire, explosion, flood or tidal wave following the covered event.<\/p>

EBNR \u2013 Earned but not reported \u2013 premium amount insurer reasonably expects to receive for which contracts are not yet final and exact amounts are not definite.<\/p>

EDP Policies \u2013 coverage to help protect against losses arising out of damage to or destruction of electronic data processing equipment and its software.<\/p>

Effective Date \u2013 date at which an insurance policy goes into force.<\/p>

Elevators and Escalators Liability \u2013 liability coverage for bodily injury or property damage arising from the use of elevators or escalators operated, maintained or controlled by the insured.<\/p>

Employee Benefit Liability \u2013 liability protection for an employer for claims arising from provisions in an employee benefit insurance plan provided for the economic and social welfare of employees. Examples of items covered are pension plans, group life insurance, group health insurance, group disability income insurance, and accidental death and dismemberment.<\/p>

Employee Retirement Income Security Act of 1974 (ERISA) \u2013 a federal statute governing standards for private pension plans, including vesting requirements, funding mechanisms, and plan design.<\/p>

Employers Liability \u2013 employers’ liability coverage for the legal liability of employers arising out of injuries to employees. This code should be used when coverage is issued as an endorsement, or as part of a statutory workers’ compensation policy.<\/p>

Employment Practices Liability Coverage \u2013 liability insurance for employers providing coverage for wrongful termination, discrimination, or sexual harassment of the insured’s current or former employees.<\/p>

Encumbrance \u2013 outstanding mortgages or other debt related to real estate and any unpaid accrued acquisition or construction costs.<\/p>

Endorsement \u2013 an amendment or rider to a policy adjusting the coverages and taking precedence over the general contract.<\/p>

Enrollment \u2013 The total number of plans, not the total number of covered lives, providing coverage to the enrollee and their dependents.<\/p>

Environmental Impairment Liability (EIL) \u2013 coverage for negligence or omission resulting in pollution or environmental contamination.<\/p>

Environmental Pollution Liability \u2013 liability coverage of an insured to persons who have incurred bodily injury or property damage from acids, fumes, smoke, toxic chemicals, waste materials or other pollutants.<\/p>

Equity Indexed Annuity \u2013 a fixed annuity that earns interest or provides benefits that are linked to an external reference or equity index, subject to a minimum guarantee.<\/p>

Errors and Omissions Liability | Professional Liability other than Medical \u2013 liability coverage of a professional or quasi professional insured to persons who have incurred bodily injury or property damage, or who have sustained any loss from omissions arising from the performance of services for others, errors in judgment, breaches of duty, or negligent or wrongful acts in business conduct.<\/p>

Event Cancellation \u2013 coverage for financial loss because of the cancellation or postponement of a specific event due to weather or other unexpected cause beyond the control of the insured.<\/p>

Excess and Umbrella Liability \u2013 liability coverage of an insured above a specific amount set forth in a basic policy issued by the primary insurer; or a self insurer for losses over a stated amount; or an insured or self insurer for known or unknown gaps in basic coverages or self insured retentions.<\/p>

Excess of Loss Reinsurance \u2013 loss sharing mechanism where an insurer pays all claims up to a specified amount and a reinsurance company pays any claims in excess of stated amount.<\/p>

Excess Workers’ Compensation \u2013 either specific and\/or aggregate excess workers’ compensation insurance written above an attachment point or self-insured retention.<\/p>

Expense Ratio \u2013 percentage of premium income used to attain and service policies. Derived by subtracting related expenses from incurred losses and dividing by written premiums.<\/p>

Experience Rating \u2013 rating system where each group is rated entirely on the basis of its own expected claims in the coming period, with retrospective adjustments for prior periods. This method is prohibited under the conditions for federal qualification.<\/p>

Exposure \u2013 risk of possible loss.<\/p>

Extra Expense Insurance \u2013 a type of property insurance for extraordinary expenses related to business interruption such as a back-up generator in case of power failure.<\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t

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Face Amount \u2013 the value of a policy to be provided upon maturity date or death.
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\n Facultative Reinsurance \u2013 reinsurance for a specific policy for which terms can be negotiated by the original insurer and reinsurer.
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\n FAIR Plan \u2013 Fair Access to Insurance Requirements \u2013 state pools designed to provide insurance to property owners who are unable to obtain property insurance through conventional means.
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\n Fair Value \u2013 the amount at which an asset (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale. Quoted market prices in active markets are the best evidence of fair value and shall be used as the basis for the measurement, if available. If a quoted market price is available, the fair value is the product of the number of trading units times market price.
\n
\n Farmowners Insurance \u2013 farmowners insurance sold for personal, family or household purposes. This package policy is similar to a homeowners policy, in that it has been developed for farms and ranches and includes both property and liability coverage for personal and business losses. Coverage includes farm dwellings and their contents, barns, stables, other farm structures and farm inland marine, such as mobile equipment and livestock.
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\n Federal Flood Insurance \u2013 coverage for qualifying residents and businesses in flood prone regions through the National Flood Insurance Act, a federally subsidized flood insurance program enacted in 1968.
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\n Federally Reinsured Crop \u2013 crop insurance coverage that is either wholly or in part reinsured by the Federal Crop Insurance Corporation (FCIC) under the Standard Reinsurance Agreement (SRA). This includes the following products: Multiple Peril Crop Insurance (MPCI); Catastrophic Insurance, Crop Revenue Coverage (CRC); Income Protection and Revenue Assurance.
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\n Fees Payable \u2013 fees incurred but not yet paid.
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\n FEMA \u2013 Federal Emergency Management Agency \u2013 an independent agency, tasked with responding to, planning for, mitigating and recovery efforts of natural disasters.
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\n Fidelity \u2013 a bond or policy covering an employer\u2019s loss resulting from an employee\u2019s dishonest act (e.g., loss of cash, securities, valuables, etc.).
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\n Financial Guaranty \u2013 a surety bond, insurance policy, or an indemnity contract (when issued by an insurer), or similar guaranty types under which loss is payable upon proof of occurrence of financial loss to an insured claimant, obligee or indemnitee as a result of failure to perform a financial obligation or any other permissible product that is defined as or determined to be financial guaranty insurance.
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\n Financial Reporting \u2013 insurance companies are required to maintain records and file annual and quarterly financial statements with regulators in accordance with statutory accounting principles (SAP). Statutory rules also govern how insurers should establish reserves for invested assets and claims and the conditions under which they can claim credit for reinsurance ceded.
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\n Financial Responsibility Law \u2013 a statute requiring motorists to show capacity to pay for automobile-related losses.
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\n Financial Statement \u2013 balance sheet and profit and loss statement of an insurance company. This statement is used by the NAIC, and by State Insurance Commissioners to regulate an insurance company according to reserve requirements, assets, and other liabilities.
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\n Fire \u2013 coverage protecting the insured against the loss to real or personal property from damage caused by the peril of fire or lightning, including business interruption, loss of rents, etc.
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\n Fire Legal Liability \u2013 coverage for property loss liability as the result of separate negligent acts and\/or omissions of the insured that allows a spreading fire to cause bodily injury or property damage of others. An example is a tenant who, while occupying another party\u2019s property, through negligence causes fire damage to the property.
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\n Flood \u2013 coverage protecting the insured against loss or damage to real or personal property from flood. (Note: If coverage for flood is offered as an additional peril on a property insurance policy, file it under the applicable property insurance filing code.)
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\n Foreign Insurer \u2013 an insurance company selling policies in a state other than the state in which they are incorporated or domiciled.
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\n Foreign Investment \u2013 an investment in a foreign jurisdiction, or an investment in a person, real estate or asset domiciled in a foreign jurisdiction. An investment shall not be deemed to be foreign if the issuing person, qualified primary credits source or qualified guarantor is a domestic jurisdiction or a person domiciled in a domestic jurisdiction, unless: a) The issuing person is a shell business entity; and b) The investment is not assumed, accepted, guaranteed or insured or otherwise backed by a domestic jurisdiction or a person, that is not a shell business entity, domiciled in a domestic jurisdiction.
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\n Foreign jurisdiction \u2013 a jurisdiction outside of the United States, Canada or any province or political subdivision of the foregoing.
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\n Fraternal Insurance \u2013 a form of group coverage or disability insurance available to members of a fraternal organization.
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\n Fronting \u2013 an arrangement in which a primary insurer acts as the insurer of record by issuing a policy, but then passes the entire risk to a reinsurer in exchange for a commission. Often, the fronting insurer is licensed to do business in a state or country where the risk is located, but the reinsurer is not.<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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Generally Accepted Accounting Principles (GAAP) \u2013 an aggregate of the accounting standards, principles and best practices for the preparation of financial statements allowing for consistency in reporting.
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\n Gramm-Leach Bliley Act (GLBA) \u2013 act, repealing Glass-Steagal Act of 1933, allows consolidation of commercial banks, investment institutions and insurance companies. Established a framework of responsibilities of federal and state regulators for these financial industries. It permits financial services companies to merge and engage in a variety of new business activities, including insurance, while attempting to address the regulatory issues raised by such combinations.
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\n Goodwill \u2013 the difference between the cost of acquiring the entity and the reporting entity\u2019s share of the book value of the acquired entity.
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\n Gross Paid-in and Contributed Surplus \u2013 amount of capital received in excess of the par value of the stock issued.
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\n Gross Premium \u2013 the net premium for insurance plus commissions, operating and miscellaneous commissions. For life insurance, this is the premium including dividends.
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\n Group Accident and Health \u2013 coverage written on a group basis (e.g., employees of a single employer and their dependents) that pays scheduled benefits or medical expenses caused by disease, accidental injury or accidental death. Excludes amounts attributable to uninsured accidents and health plans and the uninsured portion of partially insured accident and health plans.
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\n Group Annuities \u2013 Deferred Non- Variable and Variable \u2013 an annuity contract that provides an accumulation based on both (1) funds that accumulate based on a guaranteed crediting interest rates or additional interest rate applied to designated considerations, and (2) funds where the accumulation vary in accordance with the rate of return of the underlying investment portfolio selected by the policyholder. The contract provides for the initiation of payments at some designated future date.
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\n Group Annuities \u2013 Deferred Variable \u2013 an annuity contract that provides an accumulation based fund where the accumulation varies in accordance with the rate of return of the underlying investment portfolio selected by the policyholder. Must include at least one option to have the accumulation vary in accordance with the rate of return of the underlying investment portfolio selected by the policyholder and may include at least one option to have the series of payments vary in accordance with the rate of return of the underlying investment portfolio selected by the policyholder. This annuity contract provides for the initiation of payments at some designated future date.
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\n Group Annuities \u2013 Immediate Non-Variable and Variable \u2013 an annuity contract that provides an accumulation based on both (1) funds that accumulate based on a guaranteed crediting interest rates or additional interest rate applied to designated considerations, and (2) funds where the accumulation vary in accordance with the rate of return of the underlying investment portfolio selected by the policyholder. The contract provides for the initiation of payments at some interval that may vary, however the annuity payouts must begin within 13 months.
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\n Group Annuities \u2013 Immediate Variable \u2013 an annuity contract that provides for the first payment of the annuity at the end of the fixed interval of payment after purchase. The interval may vary, however the annuity payouts must begin within 13 months. The amount varies with the value of equities (separate account) purchased as investments by the insurance companies.
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\n Group Annuities \u2013 Unallocated \u2013 annuity contracts or portions thereof where the Insurer purchases an annuity for the retirees.
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\n Group Annuity \u2013 a contract providing income for a specified period of time, or duration of life for a person or persons established to benefit a group of employees.
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\n Group Health \u2013 health insurance issued to employers, associations, trusts, or other groups covering employees or members and\/or their dependents, to whom a certificate of coverage may be provided.
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\n Group Code \u2013 a unique three to five digit number assigned by the NAIC to identify those companies that are part of a larger group of insurance companies.
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\n Group Credit \u2013 Life \u2013 contracts sold in connection with loan\/credit transactions or other credit transactions, which do not exceed a stated duration and\/or amount and provide insurance protection against death.
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\n Group Health Organizations \u2013 Health Maintenance (HMO) \u2013 a plan under which an enrollee pays a membership fixed fee in advance in return for a wide range of comprehensive health care services with the HMO\u2019s approved providers in a designated service area.
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\n Guaranty Fund \u2013 funding mechanism employed by states to provide funds to cover policyholder obligations of insolvent reporting entities.<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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Hard Market \u2013 a market characterized by high demand and low supply.
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\n Hazard \u2013 circumstance which tends to increase the probability or severity of a loss.
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\n Health \u2013 Excess\/Stop Loss \u2013 this type of insurance may be extended to either a health plan or a self-insured employer plan. Its purpose is to insure against the risk that any one claim will exceed a specific dollar amount or that an entire plan\u2019s losses will exceed a specific amount.
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\n Health Insurance \u2013 a generic term applying to all types of insurance indemnifying or reimbursing for losses caused by bodily injury or illness including related medical expenses.
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\n Health Maintenance Organization (HMO) \u2013 a medical group plan that provides physician, hospital, and clinical services to participating members in exchange for a periodic flat fee.
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\n Health Plan \u2013 written promise of coverage given to an individual, family, or group of covered individuals, where a beneficiary is entitled to receive a defined set of health care benefits in exchange for a defined consideration, such as a premium.
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\n Hold-Harmless Agreement \u2013 A risk transfer mechanism whereby one party assumes the liability of another party by contract
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\n Homeowners Insurance \u2013 a package policy combining real and personal property coverage with personal liability coverage. Coverage applicable to the dwelling, appurtenant structures, unscheduled personal property and additional living expense are typical. Includes mobile homes at a fixed location.
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\n Hospital Indemnity Coverage \u2013 coverage that provides a pre-determined, fixed benefit or daily indemnity for contingencies based on a stay at a hospital or intensive care facility.
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\n Hull Insurance \u2013 coverage for damage to a vessel or aircraft and affixed items.<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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Incontestability Provision \u2013 a life insurance and annuity provision limiting the time within which the insurer has the legal right to void the contract on grounds of material misrepresentation in the policy application.
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\n Incurred But Not Reported (IBNR) \u2013 (Pure IBNR) claims that have occurred but the insurer has not been notified of them at the reporting date. Estimates are established to book these claims. May include losses that have been reported to the reporting entity but have not yet been entered into the claims system or bulk provisions. Bulk provisions are reserves included with other IBNR reserves to reflect deficiencies in known case reserves. IBNR can sometimes include estimates of incurred but Not Enough Reported (IBNER)
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\n Incurred Claims \u2013 paid claims plus amounts held in reserve for those that have been incurred but not yet paid.
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\n Incurred Losses \u2013 sustained losses, paid or not, during a specified time period. Incurred losses are typically found by combining losses paid during the period plus unpaid losses sustained during the time period minus outstanding losses at the beginning of the period incurred in the previous period.
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\n Indemnity, Principle of \u2013 a general legal principle related to insurance that holds that the individual recovering under an insurance policy should be restored to the approximate financial position he or she was in prior to the loss. Legal principle limiting compensation for damages be equivalent to the losses incurred.
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\n Independent Adjuster \u2013 freelance contractor paid a fee for adjusting losses on behalf of companies.
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\n Independent Agent \u2013 a representative of multiple insurance companies who sells and services policies for records which they own and operate under the American Agency System.
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\n Independent Contractor \u2013 an individual who is not employed for a company but instead works for themselves providing goods or services to clients for a fee.
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\n Index Annuity \u2013 an interest bearing fixed annuity tied to an equity index, such as the Dow Jones Industrial Average or S & P 500.
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\n Individual Annuities \u2013 Deferred Variable \u2013 an annuity contract that provides an accumulation based fund where the accumulation varies in accordance with the rate of return of the underlying investment portfolio selected by the policyholder. Must include at least one option to have the accumulation vary in accordance with the rate of return of the underlying investment portfolio selected by the policyholder and may include at least one option to have the series of payments vary in accordance with the rate of return of the underlying investment portfolio selected by the policyholder. This annuity contract provides for the initiation of payments at some designated future date.
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\n Individual Annuities \u2013 Immediate Variable \u2013 an annuity contract that provides for the first payment of the annuity at the end of the fixed interval of payment after purchase. The interval may vary, however the annuity payouts must begin within 13 months. The amount varies with the value of equities (separate account) purchased as investments by the insurance companies.
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\n Individual Annuities \u2013 Special \u2013 contracts with certain noteworthy attributes.
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\n Individual Annuities- Deferred Non-Variable and Variable \u2013 an annuity contract that provides an accumulation based on both (1) funds that accumulate based on a guaranteed crediting interest rates or additional interest rate applied to designated considerations, and (2) funds where the accumulation vary in accordance with the rate of return of the underlying investment portfolio selected by the policyholder. The contract provides for the initiation of payments at some designated future date.
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\n Individual Annuities- Deferred Non-Variable \u2013 an annuity contract that provides an accumulation based on funds that accumulate based on a guaranteed crediting interest rate or additional interest rate. This annuity contract provides for the initiation of payments at some designated future date.
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\n Individual Annuities- Immediate Non-Variable \u2013 an annuity contract that provides for the fixed payment of the annuity at the end of the first interval of payment after purchase. The interval may vary, however the annuity payouts must begin within 13 months.
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\n Individual Annuities- Immediate Non-Variable and Variable \u2013 an annuity contract that provides an accumulation based on both (1) funds that accumulate based on a guaranteed crediting interest rates or additional interest rate applied to designated considerations, and (2) funds where the accumulation vary in accordance with the rate of return of the underlying investment portfolio selected by the policyholder. The contract provides for the initiation of payments at some interval that may vary, however the annuity payouts must begin within 13 months.
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\n Individual Health \u2013 health insurance where the policy is issued to an individual covering the individual and\/or their dependents in the individual market. This includes conversions from group policies.
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\n Individual Credit \u2013 Credit Disability \u2013 makes monthly loan\/credit transaction payments to the creditor upon the disablement of an insured debtor.
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\n Individual Credit \u2013 Life \u2013 contracts sold in connection with loan\/credit transactions or other credit transactions, which do not exceed a stated duration and\/or amount and provide insurance protection against death.
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\n Industrial Life \u2013 Industrial life insurance, also called \u201cdebit\u201d insurance, is insurance under which premiums are paid monthly or more often, the face amount of the policy does not exceed a stated amount, and the words \u201cindustrial policy\u201d are printed in prominent type on the face of the policy.
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\n Inland Marine \u2013 coverage for property that may be in transit, held by a bailee, at a fixed location, a movable good that is often at different locations (e.g., off road constructions equipment), or scheduled property (e.g., Homeowners Personal Property Floater) including items such as live animals, property with antique or collector\u2019s value, etc. This line also includes instrumentalities of transportation and communication, such as bridges, tunnels, piers, wharves, docks, pipelines, power and phone lines, and radio and television towers.
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\n Insurable Interest \u2013 A right or relationship in regard to the subject matter of the insured contract such that the insured can suffer a financial loss from damage, loss or destruction to it. (Bickelhaupt and Magee )
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\n Insurance \u2013 an economic device transferring risk from an individual to a company and reducing the uncertainty of risk via pooling.
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\n Insurance Holding Company System \u2013 consists of two or more affiliated persons, one or more of which is an insurer.
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\n Insurance Regulatory Information System (IRIS) \u2013 a baseline solvency screening system for the National Association of Insurance Commissioners (NAIC) and state insurance regulators established in the mid-1970s.
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\n Insurance to Value \u2013 Amount of insurance purchased vs. the actual replacement cost of the insured property expressed as a ratio.
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\n Insured \u2013 party(ies) covered by an insurance policy.
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\n Insurer \u2013 an insurer or reinsurer authorized to write property and\/or casualty insurance under the laws of any state.
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\n Intermediary \u2013 a person, corporation or other business entity (not licensed as a medical provider) that arranges, by contracts with physicians and other licensed medical providers, to deliver health services for a health insurer and its enrollees via a separate contract between the intermediary and the insurer.
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\n International \u2013 includes all business transacted outside the U.S. and its territories and possessions where the appropriate line of business is not determinable.
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\n Internet Liability Insurance\/Cyber Insurance \u2013 coverage for cyber commerce including copyright infringement, libel, and violation of privacy.
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\n Investment grade \u2013 the obligation has been determined to be in one of the top four generic lettered rating classifications by a securities rating agency acceptable to the commissioner, that the obligation has been identified in writing by such a rating agency to be of investment grade quality, or, if the obligation has not been submitted to any such rating agency, that the obligation has been determined to be investment grade (Class 1 and Class 2) by the Securities Valuation Office of the National Association of Insurance Commissioners.
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\n Investment Income Accrued \u2013 investment income earned as of the reporting date but not legally due to be paid to the reporting entity until subsequent to the reporting date.
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\n Investment Income Due \u2013 investment income earned and legally due to be paid to the reporting entity as of the reporting date.
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\n Investment Income Gross \u2013 shall be recorded as earned and shall include investment income collected during the period, the change in investment income due and accrued, the change in unearned investment income plus any amortization (e.g., discounts or premiums on bonds, origination fees on mortgage loans, etc.)
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\n Irrevocable Beneficiary \u2013 a life insurance policy beneficiary who has a vested interest in the policy proceeds even during the insured\u2019s lifetime because the policy owner has the right to change the beneficiary designation only after obtaining the beneficiary\u2019s consent.<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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Joint and Last Survivor Annuity \u2013 retirement plan that continues to payout so long as at least one, of two or more, annuitants is alive.
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\n Joint Underwriting Association (JUA) \u2013 a loss-sharing mechanism combining several insurance companies to provide extra capacity due to type or size of exposure.
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\n Joint-Life Annuity \u2013 an annuity contract that ceases upon the death of the first of two or more annuitants.<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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Key-Persons Insurance \u2013 a policy purchased by, for the benefit of, a business insuring the life or lives of personnel integral to the business operations.
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\n Kidnap\/Ransom Insurance \u2013 coverage for ransom or extortion costs and related expenses.<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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Lapse \u2013 termination of a policy due to failure to pay the required renewal premium.
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\n Level Premium Insurance \u2013 life insurance policy for which the cost is equally distributed over the term of the premium period, remaining constant throughout.
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\n Liability \u2013 a certain or probable future sacrifice of economic benefits arising from present obligations of a particular entity to transfer assets or to provide services to other entities in the future as a result of a past transactions(s) or event(s). three essential characteristics: a)    It embodies a present duty or responsibility to one or more other entities that entails settlement by probable future transfer or use of assets at a specified or determinable date, on occurrence of a specified event, or on demand; b)    The duty or responsibility obligates a particular entity, leaving it little or no discretion to avoid the future sacrifice; and c)    The transaction or other event obligating the entity has already happened.
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\n Life \u2013 Endowment \u2013 insurance that pays the same benefit amount should the insured die during the term of the contract, or if the insured survives to the end of the specified coverage term or age.
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\n Life \u2013 Flexible Premium Adjustable Life \u2013 a group life insurance that provides a face amount that is adjustable to the certificate holder and allows the certificate holder to vary the modal premium that is paid or to skip a payment so long as the certificate value is sufficient to keep the certificate in force, and under which separately identified interest credits (other than in connection with dividend accumulation, premium deposit funds or other supplementary accounts) and mortality and expense charges are made to individual certificates while providing minimum guaranteed values.
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\n Life Settlements \u2013 a contract or agreement in which a policyholder agrees to sell or transfer ownership in all or part of a life insurance policy to a third party for compensation that is less than the expected death benefit of a policy.
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\n Lifetime Disability Benefit \u2013 a provision in some disability income policies to recoup lost wages for the term of disability or remainder of insured\u2019s life in case of permanent disability.
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\n Limited Benefit \u2013 policies that provide coverage for vision, prescription drug, and\/or any other single service plan or program. Also include short-term care policies that provide coverage for less than one year for medical and other services provided in a setting other than an acute care unit of the hospital.
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\n Limited Payment Life Insurance \u2013 a form of whole-life insurance with a pre-defined number of premiums to be paid.
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\n Limited Policies \u2013 health insurance coverage for a certain ailment, such as cancer.
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\n Limits \u2013 maximum value to be derived from a policy.
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\n Line of Business \u2013 classification of business written by insurers.
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\n Liquor Liability \u2013 coverage for the liability of an entity involved in the retail or wholesale sales of alcoholic beverages, or the serving of alcoholic beverages, to persons who have incurred bodily injury or property damage arising from an intoxicated person.
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\n Living benefits rider \u2013 a rider attached to a life insurance policy providing long term care for the terminally ill.
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\n Lloyd\u2019s of London \u2013 association offering membership in various syndicates of wealthy individuals organized for the purpose of writing insurance for a particular hazard.
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\n Loan-backed Securities \u2013 pass-through certificates, collateralized mortgage obligations (CMOs), and other securitized loans not included in structured securities where payment of interest and\/or principal is directly proportional to the interest and\/or principal received by the issuer from the mortgage pool or other underlying securities.
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\n Long Duration Contracts \u2013 contracts, excluding financial guaranty contracts, mortgage guaranty contracts and surety contracts, that fulfill both of the following conditions: (1) the contract term is greater than or equal to thirteen months and (2) the insurer can neither cancel nor increase the premium during the contract term.
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\n Long-Term Care \u2013 policies that provide coverage for not less than one year for diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services provided in a setting other than an acute care unit of a hospital, including policies that provide benefits for cognitive impairment or loss of functional capacity. This includes policies providing only nursing home care, home health care, community based care, or any combination. The policy does not include coverage provided under comprehensive\/major medical policies, Medicare Advantage, or for accelerated heath benefit-type products.
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\n Long-Term Disability Income Insurance \u2013 policy providing monthly income payments for insureds who become disabled for an extensive length of time, typically two years or longer.
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\n Loss \u2013 physical damage to property or bodily injury, Including loss of use or loss of income
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\n Loss Adjustment Expense (LAE) \u2013 expected payments for costs to be incurred in connection with the adjustment and recording of losses. Can be classified into two broad categories: Defense and Cost Containment (DCC) and Adjusting and Other (AO). Can also be separated into (Allocated Loss Adjustment Expense) and (Unallocated Loss Adjustment Expense for ratemaking purposes.
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\n Loss Frequency \u2013 incidence of claims on a policy during a premium period.
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\n Loss of Use Insurance \u2013 policy providing protection against loss of use due to damage or destruction of property.
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\n Loss Payable Clause \u2013 coverage for third party mortgagee in case of default on insured property, secured by a loan, that has been lost or damaged.
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\n Loss Ratio \u2013 the percentage of incurred losses to earned premiums.
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\n Loss Reserve \u2013 the amount that insurers set aside to cover claims incurred but not yet paid.
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\n Loss Reserves \u2013 an estimate of liability or provision in an insurer\u2019s financial statement, indicating the amount the insurer expects to pay for losses incurred but not yet reported or reported claims that haven\u2019t been paid.
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\n Losses Incurred \u2013 Includes claims that have been paid and\/or have amounts held in reserve for future payment
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\n Losses Incurred But Not Reported (IBNR) \u2013 An estimated amount set aside by the insurance company to pay claims that may have occurred, but for some reason have not yet been reported to the insurance company.<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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Major Medical \u2013 a hospital\/surgical\/medical expense contract that provides comprehensive benefits as defined in the state in which the contract will be delivered.
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\n Malpractice \u2013 alleged misconduct or negligence in a professional act resulting in loss or injury.
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\n Managed Care \u2013 system of health care delivery that attempts to influence the utilization, quality, and cost of services provided.
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\n Mandated benefits \u2013 insurance required by state or federal law.
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\n Manufacturers Output Policies \u2013 provides broad form coverage of personal property of an insured manufacturer including raw material, goods in process, finished goods and goods shipped to customers.
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\n Margin Premium \u2013 a deposit that an organization is required to maintain with a broker with respect to the Futures Contracts purchased or sold.
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\n Market Value \u2013 fair value or the price that could be derived from current sale of an asset.
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\n Mechanical Breakdown Insurance \u2013 premiums attributable to policies covering repair or replacement service, or indemnification for that service, for the operational or structural failure of property due to defects in materials or workmanship, or normal wear and tear. (May cover motor vehicles, mobile equipment, boats, appliances, electronics, residual structures, etc.)
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\n Medicaid \u2013 policies issued in association with the Federal\/State entitlement program created by Title XIX of the Social Security Act of 1965 that pays for medical assistance for certain individuals and families with low incomes and resources.
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\n Medical & Hospital Expenses (Benefits or Claims) \u2013 total expenditures for health care services paid to or on behalf of members.
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\n Medical Malpractice \u2013 insurance coverage protecting a licensed health care provider or health care facility against legal liability resulting from the death or injury of any person due to the insured\u2019s misconduct, negligence, or incompetence, in rendering or failure to render professional services.
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\n Medical Only \u2013 line of business that provides medical only benefits without hospital coverage. An example would be provider-sponsored organizations where there is no coverage for other than provider (non-hospital) services. Does not include self-insured business, FEHBP, Medicare and Medicaid programs, or dental only business.
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\n Medical Professional Liability \u2013 insurance coverage protecting a licensed health care provider or health care facility against legal liability resulting from the death or injury of any person due to the insured\u2019s misconduct, negligence, or incompetence in rendering professional services. Medical Professional Liability is also known as Medical Malpractice.
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\n Medicare \u2013 a state assistance program, passed under Title XVIII of the Social Security Amendments of 1965, to provide hospital and medical expense insurance to those over 65 years of age.
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\n Medicare + Choice \u2013 a major initiative in the Balanced Budget Act of 1997 (also called Medicare Part C), under which Medicare beneficiaries may select from among several managed care options or a Medicare system.
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\n Medicare Advantage Plan \u2013 an HMO, PPO, or Private Fee-For Service Plan that contracts with Medicare Advantage Prescription Drug Plan also includes drug benefits. The plan may provide extra coverage such as vision, hearing, dental, and\/or health and wellness programs. Medicare pays a fixed amount for insured\u2019s care every month to the companies offering Medicare Advantage plans.
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\n Medicare Cost \u2013 contract with Center for Medicare and Medicaid Services (CMS) for Medicare coverage. These contracts with CMS provide reimbursement through pre-determined monthly amount per member based on a total estimated budget. The beneficiary may use providers outside the provider network. Does not include stand alone Medicare Part D Plans.
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\n Medicare Part D \u2013 Stand-Alone \u2013 stand-alone Part D coverage written through individual contracts; stand-alone Part D coverage written through group contracts and certificates; and Part D coverage written on employer groups where the reporting entity is responsible for reporting claims to the Centers for Medicare & Medicaid Services (CMS).
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\n Medicare Supplement \u2013 Insurance coverage sold on an individual or group basis to help fill the \u201cgaps\u201d in the protections granted by the federal Medicare program. This is strictly supplemental coverage and cannot duplicate any benefits provided by Medicare. It is structured to pay part or all of Medicare\u2019s deductibles and co-payments. It may also cover some services and expenses not covered by Medicare. Also known as Medigap\u201d insurance.
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\n Medigap \u2013 supplementary private health insurance products to Medicare insurance benefits.
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\n Minimum Premium Plan \u2013 an arrangement under which an insurance carrier will, for a fee, handle the administration of claims and insure against large claims for a self-insured group. The employer self-funds a fixed percentage (e.g. 90%) of the estimated monthly claims, and the insurer covers the remainder.
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\n Mobile Homes \u2013 Homeowners \u2013 homeowners insurance sold to owners occupying the described mobile home.
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\n Mobile Homes under Transport \u2013 coverage for mobile homes while under transport for personal or commercial use.
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\n Modified Guaranteed \u2013 an annuity that contains a provision that adjusts the value of withdrawn funds based on a formula in the contract. The formula reflects market value adjustments.
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\n Member \u2013 A person who has enrolled as a subscriber or an eligible dependent of a subscriber and for whom the health organization has accepted the responsibility for the provision of health services as may be contracted for.
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\n Moral Hazard \u2013 personality characteristics that increase probability of losses. For example not taking proper care to protect insured property because the insured knows the insurance company will replace it if it is damaged or stolen.
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\n Morale Hazard \u2013 negligence or disregard on the part of the insured which could lead to probable loss.
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\n Morbidity \u2013 the frequency or severity of disease or illness within a subset of the population.
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\n Morbidity Risk \u2013 the potential for a person to experience illness, injury, or other physical or psychological impairment, whether temporary or permanent. Morbidity risk excludes the potential for an individual\u2019s death, but includes the potential for an illness or injury that results in death.
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\n Morbidity Table \u2013 a statistical record of the rate of illness among the defined age groups.
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\n Mortality Table \u2013 chart that shows the death rates of a particular population at each age displayed as the number of deaths per thousand.
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\n Mortgage \u2013 a note used to secure a loan for real property.
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\n Mortgage Guaranty \u2013 insurance that indemnifies a lender for loss upon foreclosure if a borrower fails to meet required mortgage payments.
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\n Mortgage Insurance \u2013 a form of life insurance coverage payable to a third party lender\/mortgagee upon the death of the insured\/mortgagor for loss of loan payments.
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\n Mortgage-Backed Securities \u2013 a type of asset-backed security that is secured by a mortgage or collection of mortgages. These securities must also be grouped in one of the top two ratings as determined by an accredited credit rating agency, and usually pay periodic payments that are similar to coupon payments. Furthermore, the mortgage must have originated from a regulated and authorized financial institution.
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\n Multi-Peril Insurance \u2013 personal and business property coverage combining several types of property insurance in one policy.
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\n Municipal Bond Guarantee Insurance \u2013 coverage sold to municipalities to guarantee the principle payment on bonds issued.
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\n Municipal Liability \u2013 liability coverage for the acts of a municipality.
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\n Municipal obligation bond \u2013 any security, or other instrument, including a state lease but not a lease of any other governmental entity, under which a payment obligation is created, issued by or on behalf of a governmental unit to finance a project servicing a substantial public purpose, and 1) Payable from tax revenues, but not tax allocations, within the jurisdiction of such governmental unit; 2) Payable or guaranteed by the United States of America or any agency, department or instrumentality thereof, or by a state housing agency; 3) Payable from rates or charges (but not tolls) levied or collected in respect of a non-nuclear utility project, public transportation facility (other than an airport facility) or public higher education facility; or 4) With respect to lease obligations, payable from future appropriations.
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\n Mutual Insurance Company \u2013 a privately held insurer owned by its policyholders, operated as a non-profit that may or may not be incorporated.
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\n Mutual Insurance Holding Company \u2013 a company organized as a mutual and owning a capital stock insurer or insurers for the benefit of pooling risk for many people, typically those in the same industry.<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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Named Insured \u2013 the individual defined as the insured in the policy contract. .
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\n Named Peril Coverage \u2013 insurance for losses explicitly defined in the policy contract.
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\n National Association of Insurance Commissioners (NAIC) \u2013 the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.
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\n Negligence \u2013 failure to exercise reasonable consideration resulting in loss or damage to oneself or others.
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\n Net Admitted Assets \u2013 total of assets whose values are permitted by state law to be included in the annual statement of the insurer.
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\n Net Income \u2013 total revenues from an insurer\u2019s operations less total expenses and income taxes
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\n Net Premiums Earned \u2013 premiums on property\/casualty or health policies that will not have to be returned to the policyholder if the policy is cancelled.
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\n NFIP \u2013 National Flood Insurance Program \u2013 flood insurance and floodplain management for personal and business property administered under the National Flood Act of 1968. Encourages participation by private insurers through a flood insurance pool .
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\n Nonadmitted Assets \u2013 assets having economic value other than those which can be used to fulfill policyholder obligations, or those assets which are unavailable due to encumbrances or other third party interests and should not be recognized on the balance sheet.
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\n Nonadmitted Insurer \u2013 insurance company not licensed to do business within a given state.
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\n Non-controlled stock insurers \u2013 insurers in which a parent company has: 1) a financial interest represented by the direct or indirect ownership of less than 50% of voting shares, and 2) does not have the ability to exercise control over the insurer, e.g., through voting stock or management contract
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\n Non-proportional Reinsurance \u2013 reinsurance that is not secured on individual lives for specific individual amount of reinsurance, but rather reinsurance that protects the ceding company\u2019s overall experience on its entire portfolio of business, or at least a broad segment of it. The most common forms of non-proportional reinsurance are stop loss and catastrophe.
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\n Notional Value \u2013 the principal value upon which future payments are based in a derivative transaction as at a specific period in time (the \u201cas of\u201d reporting date) in the reporting currency.
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\n Nationally Recognized Statistical Rating Organization (NRSRO) \u2013 refers to rating organizations so designated by the SEC whose status has been confirmed by the Securities Valuation Office. Examples are: Moody\u2019s Investors Service, Inc., Standard & Poor\u2019s (S&P), A.M. Best Company (A.M. Best) and Fitch Ratings and Dominion Bond Rating Service (DBRS).
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\n Nuclear Energy Liability \u2013 coverage for bodily injury and property damage liability resulting from the nuclear energy material (whether or not radioactive) on the insured business\u2019s premises or in transit.<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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Occurrence \u2013 an accident , including injurious exposure to conditions, which results, during the policy period in bodily injury or property damage neither expected or intended from the standpoint of the insured. (Bickelhaupt and Magee)
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\n Ocean Marine \u2013 coverage for ocean and inland water transportation exposures; goods or cargoes; ships or hulls; earnings; and liability.
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\n Officer \u2013 a president, vice-president, treasurer, actuary, secretary, controller and any other person who performs for the company functions corresponding to those performed by the foregoing officers.
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\n Option \u2013 an agreement giving the buyer the right to buy or receive, sell or deliver, enter into, extend or terminate, or effect a cash settlement based on the actual or expected price, level, performance or value of one or more Underlying Interests.
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\n Other Accident and Health \u2013 accident and health coverages not otherwise properly classified as Group Accident and Health or Credit Accident and Health (e.g., collectively renewable and individual non-cancelable, guaranteed renewable, non-renewable for stated reasons only, etc.). Include all Medicare Part D Prescription Drug Coverage, whether sold on a stand-alone basis or through a Medicare Advantage product and whether sold directly to an individual or through a group.
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\n Other Considerations \u2013 Unallocated annuity considerations and other unallocated deposits that incorporate any mortality or morbidity risk and are not reported as direct premiums, direct annuity considerations or deposit-type contract funds.
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\n Other Liability \u2013 coverage protecting the insured against legal liability resulting from negligence, carelessness, or a failure to act resulting in property damage or personal injury to others.
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\n Other Underwriting Expenses \u2013 allocable expenses other than loss adjustment expenses and investment expenses.
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\n Owner Occupied \u2013 homeowners insurance sold to owners occupying the described property.<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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Package Policy \u2013 two or more distinct policies combined into a single contract.
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\n Par Value \u2013 the nominal or face value of a stock or bond.
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\n Peril \u2013 the cause of property damage or personal injury, origin of desire for insurance. \u201cCause of Loss\u201d
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\n Permanent Life Insurance \u2013 policy that remains active for the life of the insured.
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\n Personal Auto Policy \u2013 coverage designed to insure private passenger automobiles and certain types of trucks owned by an individual or husband and wife.
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\n Personal Earthquake \u2013 earthquake property coverage for personal, family or household purposes.
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\n Personal Flood \u2013 separate flood insurance policy sold for personal, family or household purposes.
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\n Personal GAP Insurance \u2013 credit insurance that insures the excess of the outstanding indebtedness over the primary property insurance benefits in the event of a total loss to a collateral asset.
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\n Personal Injury Liability \u2013 liability coverage for those who have been discriminated against, falsely arrested, illegally detained, libeled, maliciously prosecuted, slandered, suffered from identity theft, mental anguish or alienation of affections, or have had their right of privacy violated.
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\n Personal Injury Protection Coverage\/PIP \u2013 automobile coverage available in states that have enacted no-fault laws or other auto reparation reform laws for treatment of injuries to the insured and passengers of the insured.
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\n Personal Property \u2013 single interest or dual interest credit insurance (where collateral is not a motor vehicle, mobile home, or real estate) that covers perils to goods purchased or used as collateral and that concerns a creditor\u2019s interest in the purchased goods or pledged collateral either in whole or in part; or covers perils to goods purchased in connection with an open-end credit transaction.
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\n Pet Insurance Plans \u2013 veterinary care plan insurance policy providing care for a pet animal (e.g., dog or cat) of the insured owner in the event of its illness or accident.
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\n Policy \u2013 a written contract ratifying the legality of an insurance agreement.
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\n Policy Dividend \u2013 a refund of part of the premium on a participating life insurance policy. Amount of payment is determined by subtracting the actual premium expense from the premium charged. The payment can be taken as cash, applied to a purchase an increment of paid-up insurance, left on deposit with the insurance company or applied to purchase term insurance for one year.
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\n Policy Period \u2013 time period during which insurance coverage is in effect.
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\n Policy Reserve \u2013 the amount of money allocated specifically for the fulfillment of policy obligations by a life insurance company; reserves are in place to safeguard that the company is able to pay all future claims.
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\n Policyholders Surplus \u2013 assets in excess of the liabilities of a company or net income above any monies indebted to legal obligation.
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\n Pollution \u2013 environmental contamination.
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\n Pool \u2013 an association organized for the purpose of absorbing losses through a risk-sharing mechanism thereby limiting individual exposures.
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\n Preferred Provider Organization (PPO) \u2013 arrangement, insured or uninsured, where contracts are established by Health Plan Companies (typically, commercial insurers, and, in some circumstances, by self-insured employers) with health care providers. The Health Plans involved will often designate these contracted providers as \u201cpreferred\u201d and will provide an incentive, usually in the form of lower deductibles or co-payments, to encourage covered individuals to use these providers. Members are allowed benefits for non-participating provider services on an indemnity basis with significant copayments and providers are often, but not always, paid on a discounted fee for service basis.
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\n Preferred Risk \u2013 insured, or applicant for insurance, who presents likelihood of risk lower than that of the standard applicant.
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\n Premises and Operations \u2013 policies covering the liability of an insured to persons who have incurred bodily injury or property damage on an insured\u2019s premises during normal operations or routine maintenance, or from an insured\u2019s business operations either on or off of the insured\u2019s premises.
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\n Premium \u2013 Money charged for the insurance coverage reflecting expectation of loss.
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\n Premiums Earned \u2013 the portion of premium for which the policy protection or coverage has already been given during the now-expired portion of the policy term.
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\n Premiums Net \u2013 is the amount calculated on the basis of the interest and mortality table used to calculate the reporting entity\u2019s statutory policy reserves.
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\n Premiums Written \u2013 total premiums generated from all policies (contracts) written by an insurer within a given period of time.
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\n Primary Insurance \u2013 coverage that takes precedence when more than one policy covers the same loss.
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\n Prior Approval Law \u2013 a state regulatory requirement for pre-approval of all insurance rates and forms.
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\n Private Passenger Auto (PPA) \u2013 filings that include singularly or in any combination coverage such as the following: Auto Liability, Personal Injury Protection (PIP), Medical Payments (MP), Uninsured\/Underinsured (UM\/UIM); Specified Causes of Loss, Comprehensive, and Collision.
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\n Producer \u2013 an individual who sells, services, or negotiates insurance policies either on behalf of a company or independently.
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\n Product Liability \u2013 insurance coverage protecting the manufacturer, distributor, seller, or lessor of a product against legal liability resulting from a defective condition causing personal injury, or damage, to any individual or entity, associated with the use of the product.
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\n Professional Errors and Omissions Liability \u2013 coverage available to pay for liability arising out of the performance of professional or business related duties, with coverage being tailored to the needs of the specific profession. Examples include abstracters, accountants, insurance adjusters, architects, engineers, insurance agents and brokers, lawyers, real estate agents, stockbrokers.
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\n Property \u2013 coverage protecting the insured against loss or damage to real or personal property from a variety of perils, including but not limited to fire, lightening, business interruption, loss of rents, glass breakage, tornado, windstorm, hail, water damage, explosion, riot, civil commotion, rain, or damage from aircraft or vehicles.
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\n Pro-rata (proportional) Reinsurance \u2013 portion of the losses and premium reinsurer shares with the ceding entity.
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\n Protected Cell \u2013 an insurance-linked security retained within the insurance or reinsurance company and is used to insulate the proceeds of the securities offering from the general business risks of the insurer, granting an additional comfort level for investors of the securitized instrument.
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\n Protection and Indemnity (P&I) Insurance \u2013 a broad form of marine legal liability insurance coverage.
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\n Provider Sponsored Network (PSN) \u2013 formal affiliations of providers, sometimes called \u201cintegrated delivery systems\u201d, organized and operated to provide an integrated network of health care providers with which third parties, such as insurance companies, HMOs, or other Health Plan Companies, may contract for health care services to covered individuals. Some models of integration include Physician Hospital Organizations, Management Service Organizations, Group Practices Without Walls, Medical Foundations, and Health Provider Cooperatives.
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\n Provisions \u2013 contingencies outlined in an insurance policy.
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\n Proximate Cause \u2013 event covered under insured\u2019s policy agreement.
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\n Public Adjuster \u2013 independent claims adjuster representing policyholders instead of insurance companies.
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\n Pure Premium \u2013 that portion of the premium equal to expected losses void of insurance company expenses, premium taxes, contingencies, or profit margin.
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\n Pure Risk \u2013 circumstance including possibility of loss or no loss but no possibility of gain.<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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Qualified Actuary \u2013 a person who meets the basic education, experience and continuing education requirements (these differ by line of business) of the Specific Qualification Standard for Statements of Actuarial Opinion, NAIC Property and Casualty Annual Statement, as set forth in the Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States, promulgated by the American Academy of Actuaries, and is in good standing of the American Academy of Actuaries who has been approved as qualified for signing casualty loss reserve opinions by the Casualty Practice Council of the American Academy of Actuaries.<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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Rate \u2013 value of insured losses expressed as a cost per unit of insurance.
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\n Risk Based Capital (RBC) Ratio \u2013 ratio used to identify insurance companies that are poorly capitalized. Calculated by dividing the company\u2019s capital by the minimum amount of capital regulatory authorities have deemed necessary to support the insurance operations.
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\n Rebate \u2013 a refund of part or all of a premium payment.
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\n Reinsurance \u2013 a transaction between a primary insurer and another licensed (re) insurer where the reinsurer agrees to cover all or part of the losses and\/or loss adjustment expenses of the primary insurer. The assumption is in exchange for a premium. Indemnification is on a proportional or non-proportional basis.
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\n Reinsurer \u2013 company assuming reinsurance risk.
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\n Renewable Term Insurance \u2013 insurance that is renewable for a limited number of successive terms by the policyholder and is not contingent upon medical examination.
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\n Renters Insurance \u2013 liability coverage for contents within a renter\u2019s residence. Coverage does not include the structure but does include any affixed items provided or changed by the renter.
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\n Replacement Cost \u2013 the cost of replacing property without a reduction for depreciation due to normal wear and tear.
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\n Reported Losses \u2013 Includes both expected payments for losses relating to insured events that have occurred and have been reported to the insurance company, but not yet paid.
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\n Reserve \u2013 A portion of the premium retained to pay future claims
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\n Reserve Credit \u2013 reduction of reserve amounts for reinsurance ceded. Reductions may include the claim reserve and\/or the unearned premium reserve.
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\n Residence \u2013 the domicile location of a member as shown by his or her determination as a resident.
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\n Residual Market Plan \u2013 method devised for coverage of greater than average risk individuals who cannot obtain insurance through normal market channels.
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\n Retention \u2013 a mechanism of internal fund allocation for loss exposure used in place of or as a supplement to risk transfer to an insurance company.
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\n Retention Limit \u2013 maximum amount of medical and hospital expense an insurer will carry on its own. The limit can be for an individual claim and\/or for the insurers total claims, depending upon the terms of the reinsurance contract.
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\n Retrocession \u2013 the portion of risk that a reinsurance company cedes or amount of insurance the company chooses not to retain.
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\n Retrospective Rating \u2013 the process of determining the cost of an insurance policy based on the actual loss experience determined as an adjustment to the initial premium payment.
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\n Rider \u2013 an amendment to a policy agreement.
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\n Risk \u2013 Uncertainty concerning the possibility of loss by a peril for which insurance is pursued.
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\n Risk Retention Act \u2013 a 1986 federal statute amending portions of the Product Liability Risk Retention Act of 1981 and enacted to make organization of Risk Retention Groups and Purchasing Groups more efficient.
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\n Risk Retention Group \u2013 group-owned insurer organized for the purpose of assuming and spreading the liability risks to its members.<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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Salvage \u2013 value recoverable after a loss.
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\n Statutory Accounting Principles (SAP) \u2013 a set of accounting principles set forth by the National Association of Insurance Commissioners used to prepare statutory financial statements for insurance companies.
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\n Securitization of Insurance Risk \u2013 a method for insurance companies to access capital and hedge risks by converting policies into securities that can be sold in financial markets.
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\n Security \u2013 a share, participation, or other interest in property or in an enterprise of the issuer or an obligation of the issuer.
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\n Self-Insurance \u2013 type of insurance often used for high frequency low severity risks where risk is not transferred to an insurance company but retained and accounted for internally.
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\n Separate Account \u2013 segregated funds held and invested independently of other assets by an insurer for the purpose of a group retirement fund.
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\n Short-term Disability \u2013 a company standard defining a period of time employees are eligible for short-term disability coverage, typically for 2 years or less.
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\n Short-Term Medical \u2013 policies that provide major medical coverage for a short period of time, typically 30 to 180 days. These policies may be renewable for multiple periods.
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\n Situs of Contract \u2013 the jurisdiction in which the contract is issued or delivered as stated in the contract.
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\n Social Insurance \u2013 compulsory insurance plan administered by a federal or state government agency with the primary emphasis on social adequacy.
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\n Soft Market \u2013 a buyer\u2019s market characterized by abundant supply of insurance driving premiums down.
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\n Special revenue bond \u2013 any security, or other instrument under which a payment obligation is created, issued by or on behalf of a governmental unit to finance a project serving a substantial public purpose and not payable from the sources in connection with the payment of municipal obligation bonds.
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\n Specified Disease Coverage \u2013 coverage that provides primarily pre-determined benefits for expenses of the care of cancer and\/or other specified diseases.
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\n Specified\/Named Disease \u2013 policies that provide benefits only for the diagnosis and\/or treatment of a specifically named disease or diseases. Benefits can be paid as expense incurred, per diem or as a principal sum.
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\n Standard Risk \u2013 a person who, according to a company\u2019s underwriting standards, is considered a normal risk and insurable at standard rates. High or low risk candidates may qualify for extra or discounted rates based on their deviation from the standard.
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\n State Children\u2019s Health Insurance Program \u2013 policies issued in association with the Federal\/State partnership created by title XXI of the Social Security Act.
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\n State of Domicile \u2013 the state where a company\u2019s home office is located.
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\n State Page \u2013 Exhibit of Premiums and Losses for each state a company is licensed. The state of domicile receives a schedule for each jurisdiction the company wrote direct business, or has amounts paid, incurred or unpaid.
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\n Statement Type \u2013 refers to the primary business type under which the company files its annual and quarterly statement, such as Life, Property, Health, Fraternal, Title.
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\n Statement Value \u2013 the Statutory Accounting Principle book value reduced by any valuation allowance and non-admitted adjustment applied to an individual investment or a similar group of investments, e.g., bonds, mortgage loans, common stock.
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\n Statutory Accounting \u2013 method of accounting standards and principles used by state regulatory authorities to measure the financial condition of regulated companies and other insurance enterprises. This method tends to be more conservative than the Generally Accepted Accounting Principles used by most businesses. Compliance with solvency and other standards is determined using financial documents prepared in accordance with Statutory Accounting Principles.
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\n Stock Insurance Company \u2013 business owned by stockholders.
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\n Stop Loss\/Excess Loss \u2013 individual or group policies providing coverage to a health plan, a self-insured employer plan, or a medical provider providing coverage to insure against the risk that any one claim or an entire plan\u2019s losses will exceed a specified dollar amount.
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\n Structured Securities \u2013 loan-backed securities that have been divided into two or more classes of investors where the payment of interest and\/or principal of any class of securities has been allocated in a manner that is not proportional to interest and\/or principal received by the issuer from the mortgage pool or other underlying securities.
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\n Structured Settlements \u2013 periodic fixed payments to a claimant for a determinable period, or for life, for the settlement of a claim.
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\n Subrogation \u2013 situation where an insurer, on behalf of the insured, has a legal right to bring a liability suit against a third party who caused losses to the insured. Insurer maintains the right to seek reimbursement for losses incurred by insurer at the fault of a third party.
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\n Subrogation Clause \u2013 section of insurance policies giving an insurer the right to take legal action against a third party responsible for a loss to an insured for which a claim has been paid.
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\n Subsequent Event \u2013 events or transactions that occur subsequent to the balance sheet date, but before the issuance of the statutory financial statements and before the date the audited financial statements are issued, or available to be issued.
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\n Substandard Risk \u2013 (impaired risk) risks deemed undesirable due to medical condition or hazardous occupation requiring the use of a waiver, a special policy form, or a higher premium charge.
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\n Superfund \u2013 federal act mandating retroactive liability for environmental pollution where responsible party maintains accountability for environmental clean-up regardless of length of time since polluting event occurred.
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\n Surety Bond \u2013 a three-party agreement whereby a guarantor (insurer) assumes an obligation or responsibility to pay a second party (obligee) should the principal debtor (obligor) become in default.
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\n Surplus \u2013 insurance term referring to retained earnings.
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\n Surplus Line \u2013 specialized property or liability coverage available via nonadmitted insurers where coverage is not available through an admitted insurer, licensed to sell that particular coverage in the state.
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\n Swap \u2013 an agreement to exchange or net payments as the buyer of an Option, Cap or Floor and to make payments as the seller of a different Option, Cap or Floor.<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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Tenants \u2013 homeowners insurance sold to tenants occupying the described property.
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\n Term \u2013 period of time for which policy is in effect.
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\n Term Insurance \u2013 life insurance payable only if death of insured occurs within a specified time, such as 5 or 10 years, or before a specified age.
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\n Third Party \u2013 person other than the insured or insurer who has incurred losses or is entitled to receive payment due to acts or omissions of the insured.
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\n Title Insurance \u2013 coverage that guarantees the validity of a title to real and personal property. Buyers of real and personal property and mortgage lenders rely upon the coverage to protect them against losses from undiscovered defects in existence when the policy is issued.
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\n Total Liabilities \u2013 total money owed or expected to be owed by the insurance company.
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\n Total Revenue \u2013 premiums, revenue, investment income, and income from other sources.
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\n Travel Coverage \u2013 covers financial loss due to trip cancellation\/interruption; lost or damaged baggage; trip or baggage delays; missed connections and\/or changes in itinerary; and casualty losses due to rental vehicle damage.
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\n Treaty \u2013 a reinsurance agreement between the ceding company and reinsurer.<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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Unallocated Loss Adjustment Expense (ULAE) \u2013 loss adjustment expenses that cannot be specifically tied to a claim.
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\n Umbrella and Excess (Commercial) \u2013 coverage for the liability of a commercial venture above a specific amount set forth in a basic policy issued by the primary insurer; or a self-insurer for losses over a stated amount; or an insured or self-insurer for known or unknown gaps in basic coverages or self-insured retentions.
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\n Umbrella and Excess (Personal) \u2013 non-business liability protection for individuals above a specific amount set forth in a basic policy issued by the primary insurer; or a self-insurer for losses over a stated amount; or an insured or self-insurer for known or unknown gaps in basic coverages or self-insured retentions.
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\n Unauthorized Reinsurance \u2013 reinsurance placed with a company not authorized in the reporting company\u2019s state of domicile.
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\n Underinsured Motorist Coverage \u2013 policy option for bodily injury or property losses caused by a motorist with coverage insufficient to cover total dollar amount of losses. Compensation for the injured party is equal to the difference between the losses incurred and the liability covered by the motorist at fault.
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\n Underlying Interest \u2013 the asset(s), liability(ies) or other interest(s) underlying a derivative instrument, including, but not limited to, any one or more securities, currencies, rates indices, commodities, derivative instruments, or other financial market instruments.
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\n Underwriter \u2013 person who identifies, examines and classifies the degree of risk represented by a proposed insured in order to determine whether or not coverage should be provided and, if so, at what rate.
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\n Underwriting \u2013 the process by which an insurance company examines risk and determines whether the insurer will accept the risk or not, classifies those accepted and determines the appropriate rate for coverage provided.
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\n Underwriting Risk \u2013 section of the risk-based capital formula calculating requirements for reserves and premiums.
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\n Unearned Premium \u2013 amount of premium for which payment has been made by the policyholder but coverage has not yet been provided.
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\n Unearned Premium Reserve \u2013 all premiums (fees) received for coverage extending beyond the statement date; appears as a liability on the balance sheet.
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\n Universal Life Insurance \u2013 adjustable life insurance under which premiums and coverage are adjustable, company expenses are not specifically disclosed to the insured but a financial report is provided to policyholder\u2019s annually.
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\n Unpaid Losses \u2013 claims that are in the course of settlement. The term may also include claims that have been incurred but not reported.<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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Valued Policy \u2013 an insurance contract for which the value is agreed upon in advance and is not related to the amount of the insured loss.
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\n Valued Policy Law \u2013 state legislation which specifies that the insured shall receive the face amount of the policy in the event of a total loss to a dwelling rather than the actual cash value regardless of the principle of indemnity.
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\n Viatical Settlements \u2013 contracts or agreements in which a buyer agrees to purchase all or a part of a life insurance policy.
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\n Vision \u2013 limited benefit expense policies. Provides benefits for eye care and eye care accessories. Generally provides a stated dollar amount per annual eye examination. Benefits often include a stated dollar amount for glasses and contacts. May include surgical benefits for injury or sickness associated with the eye.<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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Warrant \u2013 an agreement that gives the holder the right to purchase an underlying financial instrument at a given price and time or at a series of prices and times according to a schedule or warrant agreement.
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\n Warranty \u2013 coverage that protects against manufacturer\u2019s defects past the normal warranty period and for repair after breakdown to return a product to its originally intended use. Warranty insurance generally protects consumers from financial loss caused by the seller\u2019s failure to rectify or compensate for defective or incomplete work and cost of parts and labor necessary to restore a product\u2019s usefulness. Includes but is not limited to coverage for all obligations and liabilities incurred by a service contract provider, mechanical breakdown insurance and service contracts written by insurers.
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\n Whole Life \u2013 life insurance that may be kept in force for a person\u2019s entire life and that pays a benefit upon the person\u2019s death, whenever that may be.
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\n Whole Life Insurance \u2013 life insurance that may be kept in force for the duration of a person\u2019s life and pays a benefit upon the person\u2019s death. Premiums are made for same time period.
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\n Workers\u2019 Compensation \u2013 insurance that covers an employer\u2019s liability for injuries, disability or death to persons in their employment, without regard to fault, as prescribed by state or federal workers\u2019 compensation laws and other statutes.
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\n Written Premium \u2013 the contractually determined amount charged by the reporting entity to the policyholder for the effective period of the contract based on the expectation of risk, policy benefits, and expenses associated with the coverage provided by the terms of the insurance contract.<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

Insurance Glossary Insurance terms and definitions from SWFL Insurance. Coverages and benefits listed below may not be available in your state. If available, some optional coverages and benefits might be offered at an additional charge. Contact SWFL Insurance today to learn more. A Accident \u2013 an unexpected event or circumstance without deliberate intent. Accident Insurance \u2013 insurance for unforeseen bodily injury. Accident Only \u2013 an insurance contract that provides coverage, singly or in combination, for death, dismemberment, disability, or hospital and medical care caused by or necessitated as a result of accident or specified kinds of accident. Accident Only or AD&D \u2013 policies providing coverage, singly or in combination, for death, dismemberment, disability, or hospital and medical care caused by or necessitated as a result of accident or specified kinds of accidents. Types of coverage include student accident, sports accident, travel accident, blanket accident, specific accident or accidental death and dismemberment (AD&D). Accidental Bodily Injury \u2013 unexpected injury to a person. Accidental Death & Dismemberment \u2013 an insurance contract that pays a stated benefit in the event of death and\/or dismemberment caused by accident or specified kinds of accidents. Accumulation Period \u2013 period of time insured must incur eligible medical expenses at least equal to the deductible amount in order to establish a benefit period under a major medical expense or comprehensive medical expense policy. Actual Cash Value \u2013 repayment value for indemnification due to loss or damage of property; in most cases it is replacement cost minus depreciation Actuarial Report \u2013 (PC Insurance)a document or other presentation, prepared as a formal means of conveying to the state regulatory authority and the Board of Directors, or its equivalent, the actuary’s professional conclusions and recommendations, of recording and communicating the methods and procedures, of assuring that the parties addressed are aware of the significance of the actuary’s opinion or findings and that documents the analysis underlying the opinion. (In Life and Health) this document would be called an “Actuarial Memorandum.” Actuary \u2013 business professional who analyzes probabilities of risk and risk management including calculation of premiums, dividends and other applicable insurance industry standards. Adjuster \u2013 a person who investigates claims and recommends settlement options based on estimates of damage and insurance policies held. Admission \u2013 hospital inpatient care for any medical condition. Admitted Assets \u2013 insurer assets which can be valued and included on the balance sheet to determine financial viability of the company. Admitted Company \u2013 an insurance company licensed to do business in a state(s), domiciled in an alternative state or country. Advance Premiums \u2013 occur when a policy has been processed, and the premium has been paid prior to the effective date. These are a liability to the company and not included in written premium or the unearned premium reserve. Adverse Selection \u2013 the social phenomenon whereby persons with a higher than average probability of loss seek greater insurance coverage than those with less risk. Advisory Organization \u2013 a group supported by member companies whose function is to gather loss statistics and publish trended loss costs. Affiliate \u2013 a person or entity that directly, or indirectly, through one or more other persons or entities, controls, is controlled by or is under common control with the insurer. Agent \u2013 an individual who sells, services, or negotiates insurance policies either on behalf of a company or independently. Aggregate \u2013 the maximum dollar amount or total amount of coverage payable for a single loss, or multiple losses, during a policy period, or on a single project. Aggregate Cost Payments \u2013 method of reimbursement of a health plan with a corporate entity that directly provides care, where (1) the health plan is contractually required to pay the total operating costs of the corporate entity, less any income to the entity from other users of services, and (2) there are mutual unlimited guarantees of solvency between the entity and the health plan that put their respective capital and surplus at risk in guaranteeing each other. Aircraft \u2013 coverage for aircraft (hull) and their contents; aircraft owners’ and aircraft manufacturers liability to passengers, airports and other third parties. ALAE \u2013 an estimate of the claims settlement associated with a particular claim or claims. Alien Company \u2013 an insurance company formed according to the laws of a foreign country. The company must conform to state regulatory standards to legally sell insurance products in that state. Allied Lines \u2013 coverages which are generally written with property insurance, e.g., glass, tornado, windstorm and hail; sprinkler and water damage; explosion, riot, and civil commotion; growing crops; flood; rain; and damage from aircraft and vehicle, etc. All-Risk \u2013 also known as open peril, this type of policy covers a broad range of losses. The policy covers risks not explicitly excluded in the policy contract. Alternative Workers’ Compensation \u2013 other than standard workers’ compensation coverage, employer’s liability and excess workers’ compensation (e.g., large deductible, managed care). Ambulatory Services \u2013 health services provided to members who are not confined to a health care institution. Ambulatory services are often referred to as “outpatient” services. Annual Statement \u2013 an annual report required to be filed with each state in which an insurer does business. This report provides a snapshot of the financial condition of a company and significant events which occurred throughout the reporting year. Annuitant \u2013 the beneficiary of an annuity payment, or person during whose life and annuity is payable. Annuities \u2013 Immediate Non-variable \u2013 an annuity contract that provides for the fixed payment of the annuity at the end of the first interval of payment after purchase. The interval may vary, however the annuity payouts must begin within 13 months. Annuity \u2013 a contract providing income for a specified period of time, or duration of life for a person or persons. Appraisal \u2013 an estimate of value. Arbitration \u2013 a binding dispute resolution tactic whereby a conciliator with no interest in the outcome intercedes. Assessed Value \u2013 estimated value for real or personal property established by a taxing entity<\/p>\n","protected":false},"author":2,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"_yoast_wpseo_title":"Comprehensive Insurance Glossary | SWFL Insurance","_yoast_wpseo_metadesc":"Explore our comprehensive insurance glossary with terms and definitions from SWFL Insurance. 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