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  • Serving DE, GA, MD, NC, NJ, PA, SC & VA
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  • Term
    Definition
  • Accelerated Death Benefit An optional provision in a life insurance policy that allows a specified percentage of the death benefit to be paid prior to the insured's death, if a doctor certifies that the insured's life expectancy is limited (usually 12 months or less).
  • Accident an unexpected event or circumstance without deliberate intent.
  • Accident Insurance  insurance for unforeseen bodily injury.
  • Accident Only  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  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(...)
  • Accidental Bodily Injury  unexpected injury to a person.
  • Accidental Death & Dismemberment  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  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  repayment value for indemnification due to loss or damage of property; in most cases it is replacement cost minus depreciation
  • Actuarial Report (PC Insurance) (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(...)
  • Actuary  business professional who analyzes probabilities of risk and risk management including calculation of premiums, dividends and other applicable insurance industry standards.
  • Adjuster  a person who investigates claims and recommends settlement options based on estimates of damage and insurance policies held.
  • Admission  hospital inpatient care for any medical condition.
  • Admitted Assets  insurer assets which can be valued and included on the balance sheet to determine financial viability of the company.
  • Admitted Company  an insurance company licensed to do business in a state(s), domiciled in an alternative state or country.
  • Advance Premiums  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  the social phenomenon whereby persons with a higher than average probability of loss seek greater insurance coverage than those with less risk.
  • Advisory Organization  a group supported by member companies whose function is to gather loss statistics and publish trended loss costs.
  • Affiliate  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  an individual who sells, services, or negotiates insurance policies either on behalf of a company or independently.
  • Aggregate  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  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(...)
  • Aircraft  coverage for aircraft (hull) and their contents; aircraft owners' and aircraft manufacturers liability to passengers, airports and other third parties.
  • ALAE  an estimate of the claims settlement associated with a particular claim or claims.
  • Alien Company  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  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.
  • Alternative Workers' Compensation  other than standard workers' compensation coverage, employer's liability and excess workers' compensation (e.g., large deductible, managed care).
  • Ambulatory Services  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  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 
    the beneficiary of an annuity payment, or person during whose life and annuity is payable.
  • Annuities – Immediate Non-Variable 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  a contract providing income for a specified period of time, or duration of life for a person or persons.
  • Appraisal  an estimate of value.
  • Arbitration  a binding dispute resolution tactic whereby a conciliator with no interest in the outcome intercedes.
  • Assessed Value  estimated value for real or personal property established by a taxing entity
  • Asset  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(...)
  • Asset Risk  in the risk
  • Assigned Risk 
    A governmental pool established to write business declined by carriers in the standard insurance market.
  • Assisted Living Care  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.
  • Assumed Reinsurance  the assumption of risk from another insurance entity within a reinsurance agreement or treaty.
  • Authorized Company  an insurer licensed or admitted to do business in a particular state.
  • Authorized Control Level Risk Based Capital  theoretical amount of capital plus surplus an insurance company should maintain.
  • Authorized Reinsurance  reinsurance placed with a reinsurer who is licensed or otherwise allowed to conduct reinsurance within a state.
  • Auto Liability  coverage that protects 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(...)
  • Auto Physical Damage  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,(...)
  • Automobile Liability Insurance  coverage for bodily injury and property damage incurred through ownership or operation of a vehicle.
  • Balance Sheet  accounting statement showing the financial condition of a company at a particular date.
  • BCEGS Building Code Effectiveness Grading Schedule 
  • Beneficiary  an individual who may become eligible to receive payment due to will, life insurance policy, retirement plan, annuity, trust, or other contract.
  • Benefits (Medical & Hospital Expenses)  total expenditures for health care services paid to or on behalf of a member.
  • Blanket coverage  coverage for property and liability that extends to more than one location, class of property or employee.
  • Boatowners/Personal Watercraft  covers damage to pleasure boats, motors, trailers, boating equipment and personal watercraft as well as bodily injury and property damage liability to others.
  • Bodily Injury  physical injury including sickness or disease to a person.
  • Boiler & Machinery or Equipment Breakdown & Machinery  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.(...)
  • Bonds  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(...)
  • Book Value  original cost, including capitalized acquisition costs and accumulated depreciation, unamortized premium and discount, deferred origination and commitment fees, direct write
  • Broker  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.
  • Builders' Risk Policies  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.
  • Burglary and Theft coverage for property taken or destroyed by breaking and entering the insured's premises, burglary or theft, forgery or counterfeiting, fraud, kidnap and ransom, and off-premises exposure.
  • Business Auto  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(...)
  • Business Interruption  loss of income as a result of property damage to a business facility.
  • Business owners Policy  business insurance typically for property, liability and business interruption coverage.
  • Calendar Year Deductible  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.
  • Capital and Surplus  a company's assets minus its liabilities.
  • Capital and Surplus Requirement  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(...)
  • Capital Gains (Loss)  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.
  • Capitation Arrangement  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(...)
  • Captive Agent  an individual who sells or services insurance contracts for a specific insurer or fleet of insurers.
  • Captive Insurer  an insurance company established by a parent firm for the purpose of insuring the parent's exposures.
  • Carrying Value (Amount)  the SAP book value plus accrued interest and reduced by any valuation allowance and any nonadmitted adjustment applied to the individual investment.
  • Cash  a medium of exchange.
  • Cash Equivalent 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(...)
  • Casualty Insurance  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.
  • Catastrophe Bonds  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.
  • Catastrophe Loss  a large magnitude loss with little ability to forecast.
  • Ceded Premium  amount of premium (fees) used to purchase reinsurance.
  • Ceding Company  an insurance company that transfers risk by purchasing reinsurance.
  • Centers for Medicare & Medicaid Services (CMS)  U.S. governmental agency responsible for the licensing of federally qualified HMOs. This was formerly the Health Care Financing Administration.
  • Change in Valuation Basis  a change in the interest rate, mortality assumption or reserving method or other factors affecting the reserve computation of policies in force.
  • Chartered Life Underwriter (CLU)  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.
  • Chartered Property Casualty Underwriter (CPCU)  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(...)
  • Claim  a request made by the insured for insurer remittance of payment due to loss incurred and covered under the policy agreement.
  • Claims Adjustment Expenses  costs expected to be incurred in connection with the adjustment and recording of accident and health, auto medical and workers' compensation claims.
  • Claims-Made FormA 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
  • Class Rating  a method of determining rates for all applicants within a given set of characteristics such as personal demographic and geographic location.
  • Coinsurance  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(...)
  • Collar  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.
  • Collateral Loans  unconditional obligations for the payment of money secured by the pledge of an investment.
  • Collateralized Bond Obligations (CBOs)  an investment
  • Collateralized Mortgage Obligations (CMOs) 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.
  • Combinations  a special form of package policy composed of personal automobile and homeowners insurance.
  • Combined Ratio  an indication of the profitability of an insurance company, calculated by adding the loss and expense ratios.
  • Commencement Date  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.
  • Commercial Auto coverage for motor vehicles owned by a business engaged in commerce that protects 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(...)
  • Commercial Earthquake  earthquake property coverage for commercial ventures.
  • Commercial Farm and Ranch  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.
  • Commercial Flood  separate flood insurance policy sold to commercial ventures.
  • Commercial General Liability flexible & broad commercial liability coverage with two major sub-line.
  • Commercial Mortgage Backed Securitya type of mortgage-backed security that is secured by the loan on a commercial property.
  • Commercial Multiple Peril 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(...)
  • Commercial Package Policy  provides a broad package of property and liability coverages for commercial ventures other than those provided insurance through a business owners policy.
  • Commercial Property  property insurance coverage sold to commercial ventures.
  • Commission  a percentage of premium paid to agents by insurance companies for the sale of policies.
  • Community Rating  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.
  • Company Code  a five
  • Completed Operations Liability  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.
  • Comprehensive General Liability (CGL)  coverage of all business liabilities unless specifically excluded in the policy contract.
  • Comprehensive (Hospital and Medical)  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(...)
  • Comprehensive/Major Medical 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(...)
  • Comprehensive Personal Liability comprehensive liability coverage for exposures arising out of the residence premises and activities of individuals and family members. (Non-business liability exposure protection for individuals.)
  • Concurrent Causation  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.
  • Conditions  requirements specified in the insurance contract that must be upheld by the insured to qualify for indemnification.
  • Condos  homeowners insurance sold to condominium owners occupying the described property.
  • Construction and Alteration Liability  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.
  • Contingency Reserves  required by some jurisdictions as a hedge against adverse experience from operations, particularly adverse claim experience.
  • Contingent Liability  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
  • Continuation of Care Requirement  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.
  • Continuing Care Retirement Communities  senior housing arrangements that in addition to housing include some provision for skilled nursing care.
  • Contract Reserves  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.
  • Contractual Liability  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(...)
  • Convertible Term Insurance Policy  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.
  • Coordination of Benefits (COB)  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.
  • Copay  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.
  • Corrective Order  commissioner's directive of action to be completed by an insurer.
  • Covered Lives  The total number of lives insured, including dependents, under individual policies and group certificates.
  • Credit - Credit Defaultcoverage 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.
  • Credit  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.
  • Credit Accident and Health (group and individual)  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.
  • Credit – Assumption Agreement  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.
  • Credit Disability  makes monthly loan/credit transaction payments to the creditor upon the disablement of an insured debtor.
  • Credit Health Insurance  policy assigning creditor as beneficiary for insurance on a debtor thereby remitting balance of payment to creditor should the debtor become disabled.
  • Credit – Involuntary Unemployment  makes loan/credit transaction payments to the creditor when the debtor becomes involuntarily unemployed.
  • Credit Involuntary Unemployment  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 Life Insurance  policy assigning creditor as beneficiary for insurance on a debtor thereby remitting balance of payment to creditor upon death of debtor.
  • Credit Personal Property Insurance 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(...)
  • Credit Placed Insurance  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(...)
  • Credit Risk 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.
  • Creditor-Placed Homesingle 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(...)
  • Crop-Hail Insurance
    coverage for crop damage due to hail, fire or lightning.
  • Crop  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.
  • Date of Issue  date when an insurance company issues a policy.
  • Declarations  policy statements regarding the applicant and property covered such as demographic and occupational information, property specifications and expected mileage per year .
  • Deductible  Portion of the insured loss (in dollars) paid by the policy holder
  • Deferred Annuity  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.
  • Demutualization  conversion of a mutual insurance company to a capital stock company.
  • Dental Insurance  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.
  • Dental Only  line of business providing dental only coverage; coverage can be on a stand
  • Derivative  securities priced according to the value of other financial instruments such as commodity prices, interest rates, stock market prices, foreign or exchange rates.
  • Difference In Conditions (DIC) Insurance  special form of open
  • Direct Incurred Loss  loss whereby the proximate cause is equivalent to the insured peril.
  • Direct Loss  Damage to covered real or personal property caused by a covered peril.
  • Direct Writer  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.
  • Direct Written Premium  total premiums received by an insurance company without any adjustments for the ceding of any portion of these premiums to the Reinsurer.
  • Directors & Officers Liability  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.
  • Disability Income Long
  • Disability Income Short
  • Disability Income  a policy designed to compensate insured individuals for a portion of the income they lose because of a disabling injury or illness.
  • Dividend  a refund of a portion of the premium paid by the insured from insurer surplus.
  • Domestic Insurer  an insurance company that is domiciled and licensed in the state in which it sells insurance.
  • Dual Interest  insurance that protects the creditor's and the debtor's interest in the collateral securing the debtor's credit transaction. "Dual Interest" includes insurance commonly referred to as "Limited Dual Interest."
  • Dwelling Property/Personal Liability  a special form of package policy composed of dwelling fire and/or allied lines, and personal liability insurance.
  • Early warning system a system designed by insurance industry regulators of identifying practices and risk-related trends that contribute to systemic risk by measuring insurer' financial stability.
  • Earned Premium  portion of insured's prepaid premium allocated to the insurance company's loss experience, expenses, and profit year
  • Earthquake  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.
  • EBNR - Earned but not reportedpremium amount insurer reasonably expects to receive for which contracts are not yet final and exact amounts are not definite.
  • EDP Policies  coverage to protect against losses arising out of damage to or destruction of electronic data processing equipment and its software.
  • Effective Date  date at which an insurance policy goes into force.
  • Elevators and Escalators Liability  liability coverage for bodily injury or property damage arising from the use of elevators or escalators operated, maintained or controlled by the insured.
  • Employee Benefit Liability  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(...)
  • Employee Retirement Income Security Act of 1974 (ERISA)  a federal statute governing standards for private pension plans, including vesting requirements, funding mechanisms, and plan design.
  • Employers Liability  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.
  • Employment Practices Liability Coverage  liability insurance for employers providing coverage for wrongful termination, discrimination, or sexual harassment of the insured's current or former employees.
  • Encumbrance  outstanding mortgages or other debt related to real estate and any unpaid accrued acquisition or construction costs.
  • Endorsement  an amendment or rider to a policy adjusting the coverages and taking precedence over the general contract.
  • Enrollment The total number of plans, not the total number of covered lives, providing coverage to the enrollee and their dependents.
  • Environmental Impairment Liability (EIL)  coverage for negligence or omission resulting in pollution or environmental contamination.
  • Environmental Pollution Liability  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.
  • Equity Indexed Annuity  a fixed annuity that earns interest or provides benefits that are linked to an external reference or equity index, subject to a minimum guarantee.
  • Errors and Omissions Liability | Professional Liability other than Medical  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(...)
  • Event Cancellation  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.
  • Excess and Umbrella Liability  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.
  • Excess of Loss Reinsurance  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.
  • Excess Workers' Compensation  either specific and/or aggregate excess workers' compensation insurance written above an attachment point or self
  • Expense Ratio  percentage of premium income used to attain and service policies. Derived by subtracting related expenses from incurred losses and dividing by written premiums.
  • Experience Rating  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.
  • Exposure  risk of possible loss.
  • Extra Expense Insurance  a type of property insurance for extraordinary expenses related to business interruption such as a back
  • Face Amount  the value of a policy to be provided upon maturity date or death.
  • Facultative Reinsurance  reinsurance for a specific policy for which terms can be negotiated by the original insurer and reinsurer.
  • FAIR Plan - Fair Access to Insurance Requirementsstate pools designed to provide insurance to property owners who are unable to obtain property insurance through conventional means.
  • Fair Value  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(...)
  • Farmowners Insurance  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(...)
  • Federal Flood Insurance 
    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.
  • Federally Reinsured Crop  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);(...)
  • Fees Payable  fees incurred but not yet paid.
  • FEMA Federal Emergency Management Agency 
  • Fidelity  a bond or policy covering an employer's loss resulting from an employee's dishonest act (e.g., loss of cash, securities, valuables, etc.).
  • Financial Guaranty  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(...)
  • Financial Reporting  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(...)
  • Financial Responsibility Law  a statute requiring motorists to show capacity to pay for automobile
  • Financial Statement  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.
  • Fire  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.
  • Fire Legal Liability  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's property, through negligence causes fire(...)
  • Flood  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.)
  • Foreign Insurer  an insurance company selling policies in a state other than the state in which they are incorporated or domiciled.
  • Foreign Investment  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(...)
  • Foreign jurisdiction  a jurisdiction outside of the United States, Canada or any province or political subdivision of the foregoing.
  • Fraternal Insurance  a form of group coverage or disability insurance available to members of a fraternal organization.
  • Fronting  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.
  • Generally Accepted Accounting Principles (GAAP)  an aggregate of the accounting standards, principles and best practices for the preparation of financial statements allowing for consistency in reporting.
  • Goodwill  the difference between the cost of acquiring the entity and the reporting entity's share of the book value of the acquired entity.
  • Gramm-Leach Bliley Act (GLBA)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(...)
  • Gross Paid-in and Contributed Surplusamount of capital received in excess of the par value of the stock issued.
  • Gross Premium  the net premium for insurance plus commissions, operating and miscellaneous commissions. For life insurance, this is the premium including dividends.
  • Group Accident and Health  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(...)
  • Group Annuities – Deferred Non-Variable and Variablean 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(...)
  • Group Annuities – Deferred Variable  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(...)
  • Group Annuities – Immediate Non-Variable and Variablean 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(...)
  • Group Annuities – Immediate Variable  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(...)
  • Group Annuities – Unallocated  annuity contracts or portions thereof where the Insurer purchases an annuity for the retirees.
  • Group Annuity  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.
  • Group Code  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.
  • Group Credit – Life  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.
  • Group Health  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.
  • Group Health Organizations – Health Maintenance (HMO)  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's approved providers in a designated service area.
  • Guaranty Fund  funding mechanism employed by states to provide funds to cover policyholder obligations of insolvent reporting entities.
  • Hard Market  a market characterized by high demand and low supply.
  • Hazard  circumstance which tends to increase the probability or severity of a loss.
  • Health – Excess/Stop Loss 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's losses will exceed a specific amount.
  • Health Insurance  a generic term applying to all types of insurance indemnifying or reimbursing for losses caused by bodily injury or illness including related medical expenses.
  • Health Maintenance Organization (HMO)  a medical group plan that provides physician, hospital, and clinical services to participating members in exchange for a periodic flat fee.
  • Health Plan  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.
  • Hold-Harmless AgreementA risk transfer mechanism whereby one party assumes the liability of another party by contract.
  • Homeowners Insurance  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.
  • Hospital Indemnity Coverage coverage that provides a pre-determined, fixed benefit or daily indemnity for contingencies based on a stay at a hospital or intensive care facility.
  • Hull Insurance  coverage for damage to a vessel or aircraft and affixed items.
  • Incontestability Provision  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.
  • Incurred But Not Reported (IBNR)  (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(...)
  • Incurred Claims  paid claims plus amounts held in reserve for those that have been incurred but not yet paid.
  • Incurred Losses  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.
  • Indemnity, Principle of  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.
  • Independent Adjuster  freelance contractor paid a fee for adjusting losses on behalf of companies.
  • Independent Agent  a representative of multiple insurance companies who sells and services policies for records which they own and operate under the American Agency System.
  • Independent Contractor  an individual who is not employed for a company but instead works for themselves providing goods or services to clients for a fee.
  • Index Annuity  an interest bearing fixed annuity tied to an equity index, such as the Dow Jones Industrial Average or S & P 500.
  • Individual Annuities- Immediate Non-Variablean 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.
  • Individual Annuities – Deferred Variable  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(...)
  • Individual Annuities – Immediate Variable  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(...)
  • Individual Annuities – Special  contracts with certain noteworthy attributes.
  • Individual Credit – Credit Disability  makes monthly loan/credit transaction payments to the creditor upon the disablement of an insured debtor.
  • Individual Credit – Life  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.
  • Individual Health  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.
  • Industrial Life  Industrial life insurance, also called "debit" 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 "industrial policy" are printed in prominent type on the face of the policy.
  • Inland Marine  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(...)
  • Insurable Interest  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 )
  • Insurance  an economic device transferring risk from an individual to a company and reducing the uncertainty of risk via pooling.
  • Insurance Holding Company System  consists of two or more affiliated persons, one or more of which is an insurer.
  • Insurance Regulatory Information System (IRIS) a baseline solvency screening system for the National Association of Insurance Commissioners (NAIC) and state insurance regulators established in the mid-1970's.
  • Insurance to Value  Amount of insurance purchased vs. the actual replacement cost of the insured property expressed as a ratio.
  • Insured  party(ies) covered by an insurance policy.
  • Insurer  an insurer or reinsurer authorized to write property and/or casualty insurance under the laws of any state.
  • Intermediary  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.
  • International  includes all business transacted outside the U.S. and its territories and possessions where the appropriate line of business is not determinable.
  • Internet Liability Insurance/Cyber Insurance  coverage for cyber commerce including copyright infringement, libel, and violation of privacy.
  • Investment grade  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(...)
  • Investment Income Accrued  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.
  • Investment Income Due  investment income earned and legally due to be paid to the reporting entity as of the reporting date.
  • Investment Income Gross  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.)
  • Irrevocable Beneficiary  a life insurance policy beneficiary who has a vested interest in the policy proceeds even during the insured's lifetime because the policy owner has the right to change the beneficiary designation only after obtaining the beneficiary's consent.
  • Joint-Life Annuityan annuity contract that ceases upon the death of the first of two or more annuitants.
  • Joint and Last Survivor Annuity  retirement plan that continues to payout so long as at least one, of two or more, annuitants is alive.
  • Joint Underwriting Association (JUA) a loss-sharing mechanism combining several insurance companies to provide extra capacity due to type or size of exposure.
  • Key-Persons Insurancea policy purchased by, for the benefit of, a business insuring the life or lives of personnel integral to the business operations.
  • Kidnap/Ransom Insurance  coverage for ransom or extortion costs and related expenses.
  • Lapse  termination of a policy due to failure to pay the required renewal premium.
  • Level Premium Insurance  life insurance policy for which the cost is equally distributed over the term of the premium period, remaining constant throughout.
  • Liability  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(...)
  • Life – Endowment  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.
  • Life – Flexible Premium Adjustable Life  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(...)
  • Life Settlements  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.
  • Lifetime Disability Benefit  a provision in some disability income policies to recoup lost wages for the term of disability or remainder of insured's life in case of permanent disability.
  • Limited Benefit 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.
  • Limited Payment Life Insurance a form of whole-life insurance with a pre-defined number of premiums to be paid.
  • Limited Policies  health insurance coverage for a certain ailment, such as cancer.
  • Limits  maximum value to be derived from a policy.
  • Line of Business  classification of business written by insurers.
  • Liquor Liability  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.
  • Living benefits rider  a rider attached to a life insurance policy providing long term care for the terminally ill.
  • Lloyd's of London  association offering membership in various syndicates of wealthy individuals organized for the purpose of writing insurance for a particular hazard.
  • Loan-backed Securitiespass-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(...)
  • Long-Term Disability Income Insurancepolicy providing monthly income payments for insureds who become disabled for an extensive length of time, typically two years or longer.
  • Long Duration Contracts  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(...)
  • Loss  physical damage to property or bodily injury, Including loss of use or loss of income
  • Loss Adjustment Expense (LAE)  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 Frequency  incidence of claims on a policy during a premium period.
  • Loss of Use Insurance  policy providing protection against loss of use due to damage or destruction of property.
  • Loss Payable Clause  coverage for third party mortgagee in case of default on insured property, secured by a loan, that has been lost or damaged.
  • Loss Ratio  the percentage of incurred losses to earned premiums.
  • Loss Reserve  the amount that insurers set aside to cover claims incurred but not yet paid.
  • Loss Reserves  an estimate of liability or provision in an insurer's financial statement, indicating the amount the insurer expects to pay for losses incurred but not yet reported or reported claims that haven't been paid.
  • Losses Incurred  Includes claims that have been paid and/or have amounts held in reserve for future payment
  • Losses Incurred But Not Reported (IBNR)  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.
  • Major Medical  a hospital/surgical/medical expense contract that provides comprehensive benefits as defined in the state in which the contract will be delivered.
  • Malpractice  alleged misconduct or negligence in a professional act resulting in loss or injury.
  • Managed Care  system of health care delivery that attempts to influence the utilization, quality, and cost of services provided.
  • Mandated benefits  insurance required by state or federal law.
  • Manufacturers Output Policies  provides broad form coverage of personal property of an insured manufacturer including raw material, goods in process, finished goods and goods shipped to customers.
  • Margin Premium  a deposit that an organization is required to maintain with a broker with respect to the Futures Contracts purchased or sold.
  • Market Value  fair value or the price that could be derived from current sale of an asset.
  • Mechanical Breakdown Insurance  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,(...)
  • Medicaid  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.
  • Medical & Hospital Expenses (Benefits or Claims)  total expenditures for health care services paid to or on behalf of members.
  • Medical Malpractice  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's misconduct, negligence, or incompetence, in rendering or failure to render professional services.
  • Medical Only  line of business that provides medical only benefits without hospital coverage. An example would be provider
  • Medical Professional Liability  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's misconduct, negligence, or incompetence in rendering professional services. Medical Professional Liability is(...)
  • Medicare Medicare is a Federal health insurance program for people 65 or older.  You may be eligible to get Medicare earlier if you have a disability, End-Stage Renal Disease (ESRD), or ALS (also called Lou Gehrig’s disease).
  • Medicare Advantage Plan  an HMO, PPO, or Private Fee
  • Medicare + Choice  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.
  • Medicare Cost 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(...)
  • Medicare Part D -Stand Alonestand-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(...)
  • Medicare Part DMedicare prescription drug coverage. Can be purchased as a stand alone plan or as part of a Medicare Advantage Plan with Part D coverage.
  • Medicare Supplement Insurance coverage sold on an individual or group basis to help fill the "gaps" 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's(...)
  • Medigap  supplementary private health insurance products to Medicare insurance benefits.
  • Member  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.
  • Minimum Premium Plan  an arrangement under which an insurance carrier will, for a fee, handle the administration of claims and insure against large claims for a self
  • Mobile Homes - Homeownershomeowners insurance sold to owners occupying the described mobile home.
  • Mobile Homes under Transport  coverage for mobile homes while under transport for personal or commercial use.
  • Modified Guaranteed  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.
  • Moral Hazard  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.
  • Morale Hazard  negligence or disregard on the part of the insured which could lead to probable loss.
  • Morbidity  the frequency or severity of disease or illness within a subset of the population.
  • Morbidity Risk  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's death, but includes the potential for an illness or injury that results in death.
  • Morbidity Table  a statistical record of the rate of illness among the defined age groups.
  • Mortality Table  chart that shows the death rates of a particular population at each age displayed as the number of deaths per thousand.
  • Mortgage-Backed Securitiesa 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,(...)
  • Mortgage  a note used to secure a loan for real property.
  • Mortgage Guaranty  insurance that indemnifies a lender for loss upon foreclosure if a borrower fails to meet required mortgage payments.
  • Mortgage Insurance  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.
  • Multi-Peril Insurancepersonal and business property coverage combining several types of property insurance in one policy.
  • Municipal Bond Guarantee Insurance  coverage sold to municipalities to guarantee the principle payment on bonds issued.
  • Municipal Liability  liability coverage for the acts of a municipality.
  • Municipal obligation bond  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(...)
  • Mutual Insurance Company a privately held insurer owned by its policyholders, operated as a non-profit that may or may not be incorporated.
  • Mutual Insurance Holding Company  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.
  • Named Insured  the individual defined as the insured in the policy contract. .
  • Named Peril Coverage  insurance for losses explicitly defined in the policy contract.
  • National Association of Insurance Commissioners (NAIC)  the U.S. standard
  • Nationally Recognized Statistical Rating Organization (NRSRO)  refers to rating organizations so designated by the SEC whose status has been confirmed by the Securities Valuation Office. Examples are: Moody's Investors Service, Inc., Standard & Poor's (S&P), A.M. Best Company (A.M. Best) and Fitch Ratings and Dominion Bond Rating Service (DBRS).
  • Negligence  failure to exercise reasonable consideration resulting in loss or damage to oneself or others.
  • Net Admitted Assets  total of assets whose values are permitted by state law to be included in the annual statement of the insurer.
  • Net Income  total revenues from an insurer's operations less total expenses and income taxes
  • Net Premiums Earned  premiums on property/casualty or health policies that will not have to be returned to the policyholder if the policy is cancelled.
  • NFIP National Flood Insurance Program 
  • Non-proportional Reinsurancereinsurance that is not secured on individual lives for specific individual amount of reinsurance, but rather reinsurance that protects the ceding company's overall experience on its entire portfolio of business, or at least a broad segment of it. The most common forms of non-proportional(...)
  • Nonadmitted Assets  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.
  • Nonadmitted Insurer 
    insurance company not licensed to do business within a given state.
  • Notional Value  the principal value upon which future payments are based in a derivative transaction as at a specific period in time (the "as of" reporting date) in the reporting currency.
  • Nuclear Energy Liability  coverage for bodily injury and property damage liability resulting from the nuclear energy material (whether or not radioactive) on the insured business's premises or in transit.
  • Occurrence  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)
  • Ocean Marine  coverage for ocean and inland water transportation exposures; goods or cargoes; ships or hulls; earnings; and liability.
  • Officer 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.
  • Option  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.
  • Other Accident and Health  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
  • Other Considerations  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
  • Other Liability  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.
  • Other Underwriting Expenses  allocable expenses other than loss adjustment expenses and investment expenses.
  • Owner Occupied  homeowners insurance sold to owners occupying the described property.
  • Package Policy  two or more distinct policies combined into a single contract.
  • Par Value  the nominal or face value of a stock or bond.
  • Peril  the cause of property damage or personal injury, origin of desire for insurance. "Cause of Loss"
  • Permanent Life Insurance  policy that remains active for the life of the insured.
  • Personal Auto Policy  coverage designed to insure private passenger automobiles and certain types of trucks owned by an individual or husband and wife.
  • Personal Earthquake  earthquake property coverage for personal, family or household purposes.
  • Personal Flood  separate flood insurance policy sold for personal, family or household purposes.
  • Personal GAP Insurance  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.
  • Personal Injury Liability  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.
  • Personal Injury Protection Coverage/PIP 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.
  • Personal Property 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's interest in the purchased goods or pledged collateral either in whole or in part;(...)
  • Pet Insurance Plans  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.
  • Policy  a written contract ratifying the legality of an insurance agreement.
  • Policy Dividend 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(...)
  • Policy Period  time period during which insurance coverage is in effect.
  • Policy Reserve  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.
  • Policyholders Surplus  assets in excess of the liabilities of a company or net income above any monies indebted to legal obligation.
  • Pollution  environmental contamination.
  • Pool  an association organized for the purpose of absorbing losses through a risk
  • Preferred Provider Organization (PPO) 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(...)
  • Preferred Risk  insured, or applicant for insurance, who presents likelihood of risk lower than that of the standard applicant.
  • Premises and Operations  policies covering the liability of an insured to persons who have incurred bodily injury or property damage on an insured's premises during normal operations or routine maintenance, or from an insured's business operations either on or off of the insured's premises.
  • Premium  Money charged for the insurance coverage reflecting expectation of loss.
  • Premiums Earned the portion of premium for which the policy protection or coverage has already been given during the now-expired portion of the policy term.
  • Premiums Net  is the amount calculated on the basis of the interest and mortality table used to calculate the reporting entity's statutory policy reserves.
  • Premiums Written  total premiums generated from all policies (contracts) written by an insurer within a given period of time.
  • Primary Insurance  coverage that takes precedence when more than one policy covers the same loss.
  • Prior Approval Law a state regulatory requirement for pre-approval of all insurance rates and forms.
  • Private Passenger Auto (PPA)  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.
  • Pro-rata (proportional) Reinsuranceportion of the losses and premium reinsurer shares with the ceding entity.
  • Producer  an individual who sells, services, or negotiates insurance policies either on behalf of a company or independently.
  • Product Liability  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.
  • Professional Errors and Omissions Liability  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(...)
  • Property  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(...)
  • Protected Cell 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.
  • Protection and Indemnity (P&I) Insurance  a broad form of marine legal liability insurance coverage.
  • Provider Sponsored Network (PSN)  formal affiliations of providers, sometimes called "integrated delivery systems", 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(...)
  • Provisions  contingencies outlined in an insurance policy.
  • Proximate Cause  event covered under insured's policy agreement.
  • Public Adjuster  independent claims adjuster representing policyholders instead of insurance companies.
  • Pure Premium  that portion of the premium equal to expected losses void of insurance company expenses, premium taxes, contingencies, or profit margin.
  • Pure Risk  circumstance including possibility of loss or no loss but no possibility of gain.
  • Qualified Actuary  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(...)
  • Rate  value of insured losses expressed as a cost per unit of insurance.
  • Rebate  a refund of part or all of a premium payment.
  • Reinsurance  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
  • Reinsurer  company assuming reinsurance risk.
  • Renewable Term Insurance  insurance that is renewable for a limited number of successive terms by the policyholder and is not contingent upon medical examination.
  • Renters Insurance  liability coverage for contents within a renter's residence. Coverage does not include the structure but does include any affixed items provided or changed by the renter.
  • Replacement Cost  the cost of replacing property without a reduction for depreciation due to normal wear and tear.
  • Reported Losses  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.
  • Reserve  A portion of the premium retained to pay future claims
  • Reserve Credit  reduction of reserve amounts for reinsurance ceded. Reductions may include the claim reserve and/or the unearned premium reserve.
  • Residence  the domicile location of a member as shown by his or her determination as a resident.
  • Residual Market Plan  method devised for coverage of greater than average risk individuals who cannot obtain insurance through normal market channels.
  • Retention  a mechanism of internal fund allocation for loss exposure used in place of or as a supplement to risk transfer to an insurance company.
  • Retention Limit  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.
  • Retrocession  the portion of risk that a reinsurance company cedes or amount of insurance the company chooses not to retain.
  • Retrospective Rating  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.
  • Rider  an amendment to a policy agreement.
  • Risk  Uncertainty concerning the possibility of loss by a peril for which insurance is pursued.
  • Risk Based Capital (RBC) Ratio  ratio used to identify insurance companies that are poorly capitalized. Calculated by dividing the company's capital by the minimum amount of capital regulatory authorities have deemed necessary to support the insurance operations.
  • Risk Retention Act  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.
  • Risk Retention Group group-owned insurer organized for the purpose of assuming and spreading the liability risks to its members.
  • Salvage  value recoverable after a loss.
  • Securitization of Insurance Risk  a method for insurance companies to access capital and hedge risks by converting policies into securities that can be sold in financial markets.
  • Security  a share, participation, or other interest in property or in an enterprise of the issuer or an obligation of the issuer.
  • Self-Insurancetype 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.
  • Separate Account  segregated funds held and invested independently of other assets by an insurer for the purpose of a group retirement fund.
  • ShortTerm Medical 
  • Situs of Contract  the jurisdiction in which the contract is issued or delivered as stated in the contract.
  • Social Insurance  compulsory insurance plan administered by a federal or state government agency with the primary emphasis on social adequacy.
  • Soft Market  a buyer's market characterized by abundant supply of insurance driving premiums down.
  • Special revenue bond  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.
  • Specified Disease Coverage  coverage that provides primarily pre
  • Specified/Named Disease  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.
  • Standard Risk  a person who, according to a company's 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.
  • State Children's Health Insurance Program  policies issued in association with the Federal/State partnership created by title XXI of the Social Security Act.
  • State of Domicile  the state where a company's home office is located.
  • State Page  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.
  • Statement Type  refers to the primary business type under which the company files its annual and quarterly statement, such as Life, Property, Health, Fraternal, Title.
  • Statement Value  the Statutory Accounting Principle book value reduced by any valuation allowance and non
  • Statutory Accounting  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.(...)
  • Statutory Accounting Principles (SAP)  a set of accounting principles set forth by the National Association of Insurance Commissioners used to prepare statutory financial statements for insurance companies.
  • Stock Insurance Company  business owned by stockholders.
  • Stop Loss/Excess Loss 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's losses will exceed a specified dollar amount.
  • Structured Securities 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(...)
  • Structured Settlements  periodic fixed payments to a claimant for a determinable period, or for life, for the settlement of a claim.
  • Subrogation  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.
  • Subrogation Clause  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.
  • Subsequent Event  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.
  • Substandard Risk  (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.
  • Superfund  federal act mandating retroactive liability for environmental pollution where responsible party maintains accountability for environmental clean
  • Surety Bond 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.
  • Surplus  insurance term referring to retained earnings.
  • Surplus Line  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.
  • Swap  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.
  • Tenants  homeowners insurance sold to tenants occupying the described property.
  • Term  period of time for which policy is in effect.
  • Term Insurance  life insurance payable only if death of insured occurs within a specified time, such as 5 or 10 years, or before a specified age.
  • Third Party  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.
  • Title Insurance  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.
  • Total Liabilities  total money owed or expected to be owed by the insurance company.
  • Total Revenue  premiums, revenue, investment income, and income from other sources.
  • Travel Coverage  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.
  • Treaty  a reinsurance agreement between the ceding company and reinsurer.
  • Umbrella and Excess (Commercial)  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
  • Umbrella and Excess (Personal)  non
  • Unallocated Loss Adjustment Expense (ULAE)  loss adjustment expenses that cannot be specifically tied to a claim.
  • Unauthorized Reinsurance  reinsurance placed with a company not authorized in the reporting company's state of domicile.
  • Underinsured Motorist Coverage  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.
  • Underlying Interest  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.
  • Underwriter  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.
  • Underwriting  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.
  • Underwriting Risk section of the risk-based capital formula calculating requirements for reserves and premiums.
  • Unearned Premium  amount of premium for which payment has been made by the policyholder but coverage has not yet been provided.
  • Unearned Premium Reserve  all premiums (fees) received for coverage extending beyond the statement date; appears as a liability on the balance sheet.
  • Universal Life Insurance  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's annually.
  • Unpaid Losses  claims that are in the course of settlement. The term may also include claims that have been incurred but not reported.
  • Valued Policy  an insurance contract for which the value is agreed upon in advance and is not related to the amount of the insured loss.
  • Valued Policy Law  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.
  • Variable Annuity  an annuity contract under which the premium payments are used to purchase stock and the value of each unit is relative to the value of the investment portfolio.
  • Variable Life Insurance  life insurance whose face value and/or duration varies depending upon the value of underlying securities.
  • Variable Universal Life  combines the flexible premium features of universal life with the component of variable life in which excess credited to the cash value of the account depends on investment results of separate accounts. The policyholder selects the accounts into which the premium payments are to be made.
  • Viatical Settlements  contracts or agreements in which a buyer agrees to purchase all or a part of a life insurance policy.
  • Vision  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(...)
  • Warrant  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.
  • Warranty  coverage that protects against manufacturer's 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's failure to rectify or compensate(...)
  • Whole Life  life insurance that may be kept in force for a person's entire life and that pays a benefit upon the person's death, whenever that may be.
  • Whole Life Insurance  life insurance that may be kept in force for the duration of a person's life and pays a benefit upon the person's death. Premiums are made for same time period.
  • Workers' Compensation  insurance that covers an employer's liability for injuries, disability or death to persons in their employment, without regard to fault, as prescribed by state or federal workers' compensation laws and other statutes.
  • Written Premium  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.

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The information provided on this site is for informational purposes only. 360 Partners LLC dba Harris Advisors, its affiliates, subsidiaries, employees, agents and/or representatives do not provide tax, investment, or legal advice. Please consult with your own tax, investment, or legal advisor with any questions. Licensed in DE, GA, MD, NC, NJ, PA, SC and VA.

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