Insurance, in plain language
Find the words.
Follow the meaning.
Browse the existing insurance and financial terms alphabetically. Definitions are general references; the language of a specific policy or current rule governs.
You can also use your browser’s Find on page command to search for a word.
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).
View glossary entryAccident 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.
View glossary entryAccident 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 accident, specific accident or accidental death and dismemberment (AD&D).
View glossary entryAccidental 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.
View glossary entryAccumulation 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.
View glossary entryActual Cash Value
repayment value for indemnification due to loss or damage of property; in most cases it is replacement cost minus depreciation
View glossary entryActuarial 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 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."
View glossary entryActuary
business professional who analyzes probabilities of risk and risk management including calculation of premiums, dividends and other applicable insurance industry standards.
View glossary entryAdjuster
a person who investigates claims and recommends settlement options based on estimates of damage and insurance policies held.
View glossary entryAdmitted Assets
insurer assets which can be valued and included on the balance sheet to determine financial viability of the company.
View glossary entryAdmitted Company
an insurance company licensed to do business in a state(s), domiciled in an alternative state or country.
View glossary entryAdvance 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.
View glossary entryAdverse Selection
the social phenomenon whereby persons with a higher than average probability of loss seek greater insurance coverage than those with less risk.
View glossary entryAdvisory Organization
a group supported by member companies whose function is to gather loss statistics and publish trended loss costs.
View glossary entryAffiliate
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.
View glossary entryAgent
an individual who sells, services, or negotiates insurance policies either on behalf of a company or independently.
View glossary entryAggregate
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.
View glossary entryAggregate 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 unlimited guarantees of solvency between the entity and the health plan that put their respective capital and surplus at risk in guaranteeing each other.
View glossary entryAircraft
coverage for aircraft (hull) and their contents; aircraft owners' and aircraft manufacturers liability to passengers, airports and other third parties.
View glossary entryALAE
an estimate of the claims settlement associated with a particular claim or claims.
View glossary entryAlien 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.
View glossary entryAllied 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.
View glossary entryAlternative Workers' Compensation
other than standard workers' compensation coverage, employer's liability and excess workers' compensation (e.g., large deductible, managed care).
View glossary entryAmbulatory Services
health services provided to members who are not confined to a health care institution. Ambulatory services are often referred to as "outpatient" services.
View glossary entryAnnual 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.
View glossary entryAnnuitant
the beneficiary of an annuity payment, or person during whose life and annuity is payable.
View glossary entryAnnuities – 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.
View glossary entryAnnuity
a contract providing income for a specified period of time, or duration of life for a person or persons.
View glossary entryArbitration
a binding dispute resolution tactic whereby a conciliator with no interest in the outcome intercedes.
View glossary entryAssessed Value
estimated value for real or personal property established by a taxing entity
View glossary entryAsset
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
View glossary entryAssigned Risk
A governmental pool established to write business declined by carriers in the standard insurance market.
View glossary entryAssisted 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.
View glossary entryAssumed Reinsurance
the assumption of risk from another insurance entity within a reinsurance agreement or treaty.
View glossary entryAuthorized Company
an insurer licensed or admitted to do business in a particular state.
View glossary entryAuthorized Control Level Risk Based Capital
theoretical amount of capital plus surplus an insurance company should maintain.
View glossary entryAuthorized Reinsurance
reinsurance placed with a reinsurer who is licensed or otherwise allowed to conduct reinsurance within a state.
View glossary entryAuto 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 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.
View glossary entryAuto 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, activity, employment, or activities carried on for gain or profit.
View glossary entryAutomobile Liability Insurance
coverage for bodily injury and property damage incurred through ownership or operation of a vehicle.
View glossary entryBalance Sheet
accounting statement showing the financial condition of a company at a particular date.
View glossary entryBeneficiary
an individual who may become eligible to receive payment due to will, life insurance policy, retirement plan, annuity, trust, or other contract.
View glossary entryBenefits (Medical & Hospital Expenses)
total expenditures for health care services paid to or on behalf of a member.
View glossary entryBlanket coverage
coverage for property and liability that extends to more than one location, class of property or employee.
View glossary entryBoatowners/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.
View glossary entryBoiler & 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. Coverage also includes inspection of the equipment.
View glossary entryBonds
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.
View glossary entryBook Value
original cost, including capitalized acquisition costs and accumulated depreciation, unamortized premium and discount, deferred origination and commitment fees, direct write
View glossary entryBroker
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.
View glossary entryBuilders' 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.
View glossary entryBurglary 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.
View glossary entryBusiness 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 Loss, Comprehensive, and Collision.
View glossary entryBusiness Interruption
loss of income as a result of property damage to a business facility.
View glossary entryBusiness owners Policy
business insurance typically for property, liability and business interruption coverage.
View glossary entryCalendar 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.
View glossary entryCapital 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 admitted assets minus its liabilities, determined on a statutory accounting basis.
View glossary entryCapital 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.
View glossary entryCapitation 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 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.
View glossary entryCaptive Agent
an individual who sells or services insurance contracts for a specific insurer or fleet of insurers.
View glossary entryCaptive Insurer
an insurance company established by a parent firm for the purpose of insuring the parent's exposures.
View glossary entryCarrying Value (Amount)
the SAP book value plus accrued interest and reduced by any valuation allowance and any nonadmitted adjustment applied to the individual investment.
View glossary entryCash 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 qualify under this definition.
View glossary entryCasualty 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.
View glossary entryCatastrophe 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.
View glossary entryCeding Company
an insurance company that transfers risk by purchasing reinsurance.
View glossary entryCenters 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.
View glossary entryChange 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.
View glossary entryChartered 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.
View glossary entryChartered 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 at least three years experience in the insurance business or related field.
View glossary entryClaim
a request made by the insured for insurer remittance of payment due to loss incurred and covered under the policy agreement.
View glossary entryClaims Adjustment Expenses
costs expected to be incurred in connection with the adjustment and recording of accident and health, auto medical and workers' compensation claims.
View glossary entryClaims-Made Form
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
View glossary entryClass Rating
a method of determining rates for all applicants within a given set of characteristics such as personal demographic and geographic location.
View glossary entryCoinsurance
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.
View glossary entryCollar
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.
View glossary entryCollateral Loans
unconditional obligations for the payment of money secured by the pledge of an investment.
View glossary entryCollateralized 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.
View glossary entryCombinations
a special form of package policy composed of personal automobile and homeowners insurance.
View glossary entryCombined Ratio
an indication of the profitability of an insurance company, calculated by adding the loss and expense ratios.
View glossary entryCommencement 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.
View glossary entryCommercial 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 care-custody & control of a motor vehicle. This includes Commercial Auto Combinations of Business Auto, Garage, Truckers and/or Other Commercial Auto.
View glossary entryCommercial 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.
View glossary entryCommercial General Liability
flexible & broad commercial liability coverage with two major sub-line.
View glossary entryCommercial Mortgage Backed Security
a type of mortgage-backed security that is secured by the loan on a commercial property.
View glossary entryCommercial 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 annual statement lines, if written individually. Include under this type of insurance multi-peril policies (other than farm owners, homeowners and automobile policies) that include coverage for liability other than auto.
View glossary entryCommercial Package Policy
provides a broad package of property and liability coverages for commercial ventures other than those provided insurance through a business owners policy.
View glossary entryCommission
a percentage of premium paid to agents by insurance companies for the sale of policies.
View glossary entryCommunity 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.
View glossary entryCompleted 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.
View glossary entryComprehensive General Liability (CGL)
coverage of all business liabilities unless specifically excluded in the policy contract.
View glossary entryComprehensive (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 programs, Medicare and Medicaid programs, vision only and dental only business.
View glossary entryComprehensive/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 only, hospital confinement indemnity, surgical, outpatient indemnity, specified disease, intensive care, and organ and tissue transplant coverage.
View glossary entryComprehensive 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.)
View glossary entryConcurrent 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.
View glossary entryConditions
requirements specified in the insurance contract that must be upheld by the insured to qualify for indemnification.
View glossary entryCondos
homeowners insurance sold to condominium owners occupying the described property.
View glossary entryConstruction 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.
View glossary entryContingency Reserves
required by some jurisdictions as a hedge against adverse experience from operations, particularly adverse claim experience.
View glossary entryContingent 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
View glossary entryContinuation 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.
View glossary entryContinuing Care Retirement Communities
senior housing arrangements that in addition to housing include some provision for skilled nursing care.
View glossary entryContract 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.
View glossary entryContractual 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 by the provider.
View glossary entryConvertible 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.
View glossary entryCoordination 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.
View glossary entryCopay
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.
View glossary entryCorrective Order
commissioner's directive of action to be completed by an insurer.
View glossary entryCovered Lives
The total number of lives insured, including dependents, under individual policies and group certificates.
View glossary entryCredit - Credit Default
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.
View glossary entryCredit
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.
View glossary entryCredit 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.
View glossary entryCredit – 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.
View glossary entryCredit Disability
makes monthly loan/credit transaction payments to the creditor upon the disablement of an insured debtor.
View glossary entryCredit Health Insurance
policy assigning creditor as beneficiary for insurance on a debtor thereby remitting balance of payment to creditor should the debtor become disabled.
View glossary entryCredit – Involuntary Unemployment
makes loan/credit transaction payments to the creditor when the debtor becomes involuntarily unemployed.
View glossary entryCredit 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 Family Leave.
View glossary entryCredit Life Insurance
policy assigning creditor as beneficiary for insurance on a debtor thereby remitting balance of payment to creditor upon death of debtor.
View glossary entryCredit 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 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.
View glossary entryCredit 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 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.
View glossary entryCredit 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.
View glossary entryCreditor-Placed Home
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.
View glossary entryCrop
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.
View glossary entryDeclarations
policy statements regarding the applicant and property covered such as demographic and occupational information, property specifications and expected mileage per year .
View glossary entryDeferred 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.
View glossary entryDemutualization
conversion of a mutual insurance company to a capital stock company.
View glossary entryDental 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.
View glossary entryDental Only
line of business providing dental only coverage; coverage can be on a stand
View glossary entryDerivative
securities priced according to the value of other financial instruments such as commodity prices, interest rates, stock market prices, foreign or exchange rates.
View glossary entryDirect Incurred Loss
loss whereby the proximate cause is equivalent to the insured peril.
View glossary entryDirect Loss
Damage to covered real or personal property caused by a covered peril.
View glossary entryDirect 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.
View glossary entryDirect Written Premium
total premiums received by an insurance company without any adjustments for the ceding of any portion of these premiums to the Reinsurer.
View glossary entryDirectors & 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.
View glossary entryDisability Income
1 Long2 a policy designed to compensate insured individuals for a portion of the income they lose because of a disabling injury or illness.3 Short
View glossary entryDisability Income
1 Short2 a policy designed to compensate insured individuals for a portion of the income they lose because of a disabling injury or illness.3 Long
View glossary entryDisability Income
1 a policy designed to compensate insured individuals for a portion of the income they lose because of a disabling injury or illness.2 Short3 Long
View glossary entryDividend
a refund of a portion of the premium paid by the insured from insurer surplus.
View glossary entryDomestic Insurer
an insurance company that is domiciled and licensed in the state in which it sells insurance.
View glossary entryDual 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."
View glossary entryDwelling Property/Personal Liability
a special form of package policy composed of dwelling fire and/or allied lines, and personal liability insurance.
View glossary entryEarly 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.
View glossary entryEarned Premium
portion of insured's prepaid premium allocated to the insurance company's loss experience, expenses, and profit year
View glossary entryEarthquake
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.
View glossary entryEBNR - Earned but not reported
premium amount insurer reasonably expects to receive for which contracts are not yet final and exact amounts are not definite.
View glossary entryEDP Policies
coverage to protect against losses arising out of damage to or destruction of electronic data processing equipment and its software.
View glossary entryElevators 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.
View glossary entryEmployee 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 insurance, and accidental death and dismemberment.
View glossary entryEmployee Retirement Income Security Act of 1974 (ERISA)
a federal statute governing standards for private pension plans, including vesting requirements, funding mechanisms, and plan design.
View glossary entryEmployers 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.
View glossary entryEmployment Practices Liability Coverage
liability insurance for employers providing coverage for wrongful termination, discrimination, or sexual harassment of the insured's current or former employees.
View glossary entryEncumbrance
outstanding mortgages or other debt related to real estate and any unpaid accrued acquisition or construction costs.
View glossary entryEndorsement
an amendment or rider to a policy adjusting the coverages and taking precedence over the general contract.
View glossary entryEnrollment
The total number of plans, not the total number of covered lives, providing coverage to the enrollee and their dependents.
View glossary entryEnvironmental Impairment Liability (EIL)
coverage for negligence or omission resulting in pollution or environmental contamination.
View glossary entryEnvironmental 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.
View glossary entryEquity 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.
View glossary entryErrors 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 acts in business conduct.
View glossary entryEvent 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.
View glossary entryExcess 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.
View glossary entryExcess 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.
View glossary entryExcess Workers' Compensation
either specific and/or aggregate excess workers' compensation insurance written above an attachment point or self
View glossary entryExpense Ratio
percentage of premium income used to attain and service policies. Derived by subtracting related expenses from incurred losses and dividing by written premiums.
View glossary entryExperience 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.
View glossary entryExtra Expense Insurance
a type of property insurance for extraordinary expenses related to business interruption such as a back
View glossary entryFacultative Reinsurance
reinsurance for a specific policy for which terms can be negotiated by the original insurer and reinsurer.
View glossary entryFAIR Plan - Fair Access to Insurance Requirements
state pools designed to provide insurance to property owners who are unable to obtain property insurance through conventional means.
View glossary entryFair 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 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.
View glossary entryFarmowners 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 and their contents, barns, stables, other farm structures and farm inland marine, such as mobile equipment and livestock.
View glossary entryFederal 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.
View glossary entryFederally 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); Income Protection and Revenue Assurance.
View glossary entryFidelity
a bond or policy covering an employer's loss resulting from an employee's dishonest act (e.g., loss of cash, securities, valuables, etc.).
View glossary entryFinancial 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 other permissible product that is defined as or determined to be financial guaranty insurance.
View glossary entryFinancial 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 conditions under which they can claim credit for reinsurance ceded.
View glossary entryFinancial Responsibility Law
a statute requiring motorists to show capacity to pay for automobile
View glossary entryFinancial 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.
View glossary entryFire
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.
View glossary entryFire 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 damage to the property.
View glossary entryFlood
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.)
View glossary entryForeign Insurer
an insurance company selling policies in a state other than the state in which they are incorporated or domiciled.
View glossary entryForeign 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 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.
View glossary entryForeign jurisdiction
a jurisdiction outside of the United States, Canada or any province or political subdivision of the foregoing.
View glossary entryFraternal Insurance
a form of group coverage or disability insurance available to members of a fraternal organization.
View glossary entryFronting
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.
View glossary entryGenerally 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.
View glossary entryGoodwill
the difference between the cost of acquiring the entity and the reporting entity's share of the book value of the acquired entity.
View glossary entryGramm-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 engage in a variety of new business activities, including insurance, while attempting to address the regulatory issues raised by such combinations.
View glossary entryGross Paid-in and Contributed Surplus
amount of capital received in excess of the par value of the stock issued.
View glossary entryGross Premium
the net premium for insurance plus commissions, operating and miscellaneous commissions. For life insurance, this is the premium including dividends.
View glossary entryGroup 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 portion of partially insured accident and health plans.
View glossary entryGroup Annuities – Deferred Non-Variable and Variable
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.
View glossary entryGroup 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 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.
View glossary entryGroup Annuities – Immediate Non-Variable and Variable
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.
View glossary entryGroup 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 investments by the insurance companies.
View glossary entryGroup Annuities – Unallocated
annuity contracts or portions thereof where the Insurer purchases an annuity for the retirees.
View glossary entryGroup 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.
View glossary entryGroup 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.
View glossary entryGroup 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.
View glossary entryGroup 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.
View glossary entryGroup 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.
View glossary entryGuaranty Fund
funding mechanism employed by states to provide funds to cover policyholder obligations of insolvent reporting entities.
View glossary entryHazard
circumstance which tends to increase the probability or severity of a loss.
View glossary entryHealth – 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.
View glossary entryHealth 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.
View glossary entryHealth Maintenance Organization (HMO)
a medical group plan that provides physician, hospital, and clinical services to participating members in exchange for a periodic flat fee.
View glossary entryHealth 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.
View glossary entryHold-Harmless Agreement
A risk transfer mechanism whereby one party assumes the liability of another party by contract.
View glossary entryHomeowners 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.
View glossary entryHospital 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.
View glossary entryIncontestability 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.
View glossary entryIncurred 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 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)
View glossary entryIncurred Claims
paid claims plus amounts held in reserve for those that have been incurred but not yet paid.
View glossary entryIncurred 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.
View glossary entryIndemnity, 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.
View glossary entryIndependent Adjuster
freelance contractor paid a fee for adjusting losses on behalf of companies.
View glossary entryIndependent Agent
a representative of multiple insurance companies who sells and services policies for records which they own and operate under the American Agency System.
View glossary entryIndependent Contractor
an individual who is not employed for a company but instead works for themselves providing goods or services to clients for a fee.
View glossary entryIndex Annuity
an interest bearing fixed annuity tied to an equity index, such as the Dow Jones Industrial Average or S & P 500.
View glossary entryIndividual 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.
View glossary entryIndividual 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 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.
View glossary entryIndividual 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 investments by the insurance companies.
View glossary entryIndividual Credit – Credit Disability
makes monthly loan/credit transaction payments to the creditor upon the disablement of an insured debtor.
View glossary entryIndividual 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.
View glossary entryIndividual 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.
View glossary entryIndustrial 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.
View glossary entryInland 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 with antique or collector's 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.
View glossary entryInsurable 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 )
View glossary entryInsurance
an economic device transferring risk from an individual to a company and reducing the uncertainty of risk via pooling.
View glossary entryInsurance Holding Company System
consists of two or more affiliated persons, one or more of which is an insurer.
View glossary entryInsurance 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.
View glossary entryInsurance to Value
Amount of insurance purchased vs. the actual replacement cost of the insured property expressed as a ratio.
View glossary entryInsurer
an insurer or reinsurer authorized to write property and/or casualty insurance under the laws of any state.
View glossary entryIntermediary
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.
View glossary entryInternational
includes all business transacted outside the U.S. and its territories and possessions where the appropriate line of business is not determinable.
View glossary entryInternet Liability Insurance/Cyber Insurance
coverage for cyber commerce including copyright infringement, libel, and violation of privacy.
View glossary entryInvestment 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 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.
View glossary entryInvestment 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.
View glossary entryInvestment Income Due
investment income earned and legally due to be paid to the reporting entity as of the reporting date.
View glossary entryInvestment 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.)
View glossary entryIrrevocable 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.
View glossary entryJoint-Life Annuity
an annuity contract that ceases upon the death of the first of two or more annuitants.
View glossary entryJoint and Last Survivor Annuity
retirement plan that continues to payout so long as at least one, of two or more, annuitants is alive.
View glossary entryJoint Underwriting Association (JUA)
a loss-sharing mechanism combining several insurance companies to provide extra capacity due to type or size of exposure.
View glossary entryKey-Persons Insurance
a policy purchased by, for the benefit of, a business insuring the life or lives of personnel integral to the business operations.
View glossary entryKidnap/Ransom Insurance
coverage for ransom or extortion costs and related expenses.
View glossary entryLapse
termination of a policy due to failure to pay the required renewal premium.
View glossary entryLevel Premium Insurance
life insurance policy for which the cost is equally distributed over the term of the premium period, remaining constant throughout.
View glossary entryLiability
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.
View glossary entryLife – 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.
View glossary entryLife – 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 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.
View glossary entryLife 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.
View glossary entryLifetime 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.
View glossary entryLimited 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.
View glossary entryLimited Payment Life Insurance
a form of whole-life insurance with a pre-defined number of premiums to be paid.
View glossary entryLimited Policies
health insurance coverage for a certain ailment, such as cancer.
View glossary entryLiquor 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.
View glossary entryLiving benefits rider
a rider attached to a life insurance policy providing long term care for the terminally ill.
View glossary entryLloyd's of London
association offering membership in various syndicates of wealthy individuals organized for the purpose of writing insurance for a particular hazard.
View glossary entryLoan-backed Securities
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.
View glossary entryLong-Term Disability Income Insurance
policy providing monthly income payments for insureds who become disabled for an extensive length of time, typically two years or longer.
View glossary entryLong 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 contract term.
View glossary entryLoss
physical damage to property or bodily injury, Including loss of use or loss of income
View glossary entryLoss 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 Adjustment Expense for ratemaking purposes.
View glossary entryLoss of Use Insurance
policy providing protection against loss of use due to damage or destruction of property.
View glossary entryLoss Payable Clause
coverage for third party mortgagee in case of default on insured property, secured by a loan, that has been lost or damaged.
View glossary entryLoss Reserve
the amount that insurers set aside to cover claims incurred but not yet paid.
View glossary entryLoss 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.
View glossary entryLosses Incurred
Includes claims that have been paid and/or have amounts held in reserve for future payment
View glossary entryLosses 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.
View glossary entryMajor Medical
a hospital/surgical/medical expense contract that provides comprehensive benefits as defined in the state in which the contract will be delivered.
View glossary entryMalpractice
alleged misconduct or negligence in a professional act resulting in loss or injury.
View glossary entryManaged Care
system of health care delivery that attempts to influence the utilization, quality, and cost of services provided.
View glossary entryManufacturers 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.
View glossary entryMargin Premium
a deposit that an organization is required to maintain with a broker with respect to the Futures Contracts purchased or sold.
View glossary entryMarket Value
fair value or the price that could be derived from current sale of an asset.
View glossary entryMechanical 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, appliances, electronics, residual structures, etc.)
View glossary entryMedicaid
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.
View glossary entryMedical & Hospital Expenses (Benefits or Claims)
total expenditures for health care services paid to or on behalf of members.
View glossary entryMedical 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.
View glossary entryMedical Only
line of business that provides medical only benefits without hospital coverage. An example would be provider
View glossary entryMedical 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 also known as Medical Malpractice.
View glossary entryMedicare
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).
View glossary entryMedicare + 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.
View glossary entryMedicare 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 include stand alone Medicare Part D Plans.
View glossary entryMedicare Part D -Stand Alone
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).
View glossary entryMedicare Part D
Medicare prescription drug coverage. Can be purchased as a stand alone plan or as part of a Medicare Advantage Plan with Part D coverage.
View glossary entryMedicare 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 deductibles and co-payments. It may also cover some services and expenses not covered by Medicare. Also known as Medigap" insurance.
View glossary entryMedigap
supplementary private health insurance products to Medicare insurance benefits.
View glossary entryMember
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.
View glossary entryMinimum 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
View glossary entryMobile Homes - Homeowners
homeowners insurance sold to owners occupying the described mobile home.
View glossary entryMobile Homes under Transport
coverage for mobile homes while under transport for personal or commercial use.
View glossary entryModified 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.
View glossary entryMoral 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.
View glossary entryMorale Hazard
negligence or disregard on the part of the insured which could lead to probable loss.
View glossary entryMorbidity
the frequency or severity of disease or illness within a subset of the population.
View glossary entryMorbidity 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.
View glossary entryMorbidity Table
a statistical record of the rate of illness among the defined age groups.
View glossary entryMortality Table
chart that shows the death rates of a particular population at each age displayed as the number of deaths per thousand.
View glossary entryMortgage-Backed Securities
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.
View glossary entryMortgage Guaranty
insurance that indemnifies a lender for loss upon foreclosure if a borrower fails to meet required mortgage payments.
View glossary entryMortgage 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.
View glossary entryMulti-Peril Insurance
personal and business property coverage combining several types of property insurance in one policy.
View glossary entryMunicipal Bond Guarantee Insurance
coverage sold to municipalities to guarantee the principle payment on bonds issued.
View glossary entryMunicipal 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 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
View glossary entryMutual Insurance Company
a privately held insurer owned by its policyholders, operated as a non-profit that may or may not be incorporated.
View glossary entryMutual 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.
View glossary entryNamed Peril Coverage
insurance for losses explicitly defined in the policy contract.
View glossary entryNationally 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).
View glossary entryNegligence
failure to exercise reasonable consideration resulting in loss or damage to oneself or others.
View glossary entryNet Admitted Assets
total of assets whose values are permitted by state law to be included in the annual statement of the insurer.
View glossary entryNet Income
total revenues from an insurer's operations less total expenses and income taxes
View glossary entryNet Premiums Earned
premiums on property/casualty or health policies that will not have to be returned to the policyholder if the policy is cancelled.
View glossary entryNon-proportional Reinsurance
reinsurance 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 reinsurance are stop loss and catastrophe.
View glossary entryNonadmitted 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.
View glossary entryNonadmitted Insurer
insurance company not licensed to do business within a given state.
View glossary entryNotional 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.
View glossary entryNuclear 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.
View glossary entryOccurrence
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)
View glossary entryOcean Marine
coverage for ocean and inland water transportation exposures; goods or cargoes; ships or hulls; earnings; and liability.
View glossary entryOfficer
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.
View glossary entryOption
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.
View glossary entryOther 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
View glossary entryOther 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
View glossary entryOther 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.
View glossary entryOther Underwriting Expenses
allocable expenses other than loss adjustment expenses and investment expenses.
View glossary entryOwner Occupied
homeowners insurance sold to owners occupying the described property.
View glossary entryPeril
the cause of property damage or personal injury, origin of desire for insurance. "Cause of Loss"
View glossary entryPermanent Life Insurance
policy that remains active for the life of the insured.
View glossary entryPersonal Auto Policy
coverage designed to insure private passenger automobiles and certain types of trucks owned by an individual or husband and wife.
View glossary entryPersonal Earthquake
earthquake property coverage for personal, family or household purposes.
View glossary entryPersonal Flood
separate flood insurance policy sold for personal, family or household purposes.
View glossary entryPersonal 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.
View glossary entryPersonal 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.
View glossary entryPersonal 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.
View glossary entryPersonal 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; or covers perils to goods purchased in connection with an open-end credit transaction.
View glossary entryPet 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.
View glossary entryPolicy 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 insurance company or applied to purchase term insurance for one year.
View glossary entryPolicy 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.
View glossary entryPolicyholders Surplus
assets in excess of the liabilities of a company or net income above any monies indebted to legal obligation.
View glossary entryPool
an association organized for the purpose of absorbing losses through a risk
View glossary entryPreferred 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" 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.
View glossary entryPreferred Risk
insured, or applicant for insurance, who presents likelihood of risk lower than that of the standard applicant.
View glossary entryPremises 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.
View glossary entryPremium
Money charged for the insurance coverage reflecting expectation of loss.
View glossary entryPremiums 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.
View glossary entryPremiums Net
is the amount calculated on the basis of the interest and mortality table used to calculate the reporting entity's statutory policy reserves.
View glossary entryPremiums Written
total premiums generated from all policies (contracts) written by an insurer within a given period of time.
View glossary entryPrimary Insurance
coverage that takes precedence when more than one policy covers the same loss.
View glossary entryPrior Approval Law
a state regulatory requirement for pre-approval of all insurance rates and forms.
View glossary entryPrivate 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.
View glossary entryPro-rata (proportional) Reinsurance
portion of the losses and premium reinsurer shares with the ceding entity.
View glossary entryProducer
an individual who sells, services, or negotiates insurance policies either on behalf of a company or independently.
View glossary entryProduct 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.
View glossary entryProfessional 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 brokers, lawyers, real estate agents, stockbrokers.
View glossary entryProperty
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.
View glossary entryProtected 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.
View glossary entryProtection and Indemnity (P&I) Insurance
a broad form of marine legal liability insurance coverage.
View glossary entryProvider 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 to covered individuals. Some models of integration include Physician Hospital Organizations, Management Service Organizations, Group Practices Without Walls, Medical Foundations, and Health Provider Cooperatives.
View glossary entryPublic Adjuster
independent claims adjuster representing policyholders instead of insurance companies.
View glossary entryPure Premium
that portion of the premium equal to expected losses void of insurance company expenses, premium taxes, contingencies, or profit margin.
View glossary entryPure Risk
circumstance including possibility of loss or no loss but no possibility of gain.
View glossary entryQualified 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 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.
View glossary entryReinsurance
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
View glossary entryRenewable Term Insurance
insurance that is renewable for a limited number of successive terms by the policyholder and is not contingent upon medical examination.
View glossary entryRenters 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.
View glossary entryReplacement Cost
the cost of replacing property without a reduction for depreciation due to normal wear and tear.
View glossary entryReported 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.
View glossary entryReserve Credit
reduction of reserve amounts for reinsurance ceded. Reductions may include the claim reserve and/or the unearned premium reserve.
View glossary entryResidence
the domicile location of a member as shown by his or her determination as a resident.
View glossary entryResidual Market Plan
method devised for coverage of greater than average risk individuals who cannot obtain insurance through normal market channels.
View glossary entryRetention
a mechanism of internal fund allocation for loss exposure used in place of or as a supplement to risk transfer to an insurance company.
View glossary entryRetention 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.
View glossary entryRetrocession
the portion of risk that a reinsurance company cedes or amount of insurance the company chooses not to retain.
View glossary entryRetrospective 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.
View glossary entryRisk
Uncertainty concerning the possibility of loss by a peril for which insurance is pursued.
View glossary entryRisk 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.
View glossary entryRisk 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.
View glossary entryRisk Retention Group
group-owned insurer organized for the purpose of assuming and spreading the liability risks to its members.
View glossary entrySecuritization 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.
View glossary entrySecurity
a share, participation, or other interest in property or in an enterprise of the issuer or an obligation of the issuer.
View glossary entrySelf-Insurance
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.
View glossary entrySeparate Account
segregated funds held and invested independently of other assets by an insurer for the purpose of a group retirement fund.
View glossary entrySitus of Contract
the jurisdiction in which the contract is issued or delivered as stated in the contract.
View glossary entrySocial Insurance
compulsory insurance plan administered by a federal or state government agency with the primary emphasis on social adequacy.
View glossary entrySoft Market
a buyer's market characterized by abundant supply of insurance driving premiums down.
View glossary entrySpecial 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.
View glossary entrySpecified/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.
View glossary entryStandard 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.
View glossary entryState Children's Health Insurance Program
policies issued in association with the Federal/State partnership created by title XXI of the Social Security Act.
View glossary entryState 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.
View glossary entryStatement Type
refers to the primary business type under which the company files its annual and quarterly statement, such as Life, Property, Health, Fraternal, Title.
View glossary entryStatement Value
the Statutory Accounting Principle book value reduced by any valuation allowance and non
View glossary entryStatutory 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. Compliance with solvency and other standards is determined using financial documents prepared in accordance with Statutory Accounting Principles.
View glossary entryStatutory 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.
View glossary entryStop 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.
View glossary entryStructured 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 other underlying securities.
View glossary entryStructured Settlements
periodic fixed payments to a claimant for a determinable period, or for life, for the settlement of a claim.
View glossary entrySubrogation
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.
View glossary entrySubrogation 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.
View glossary entrySubsequent 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.
View glossary entrySubstandard 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.
View glossary entrySuperfund
federal act mandating retroactive liability for environmental pollution where responsible party maintains accountability for environmental clean
View glossary entrySurety 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.
View glossary entrySurplus 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.
View glossary entrySwap
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.
View glossary entryTerm 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.
View glossary entryThird 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.
View glossary entryTitle 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.
View glossary entryTotal Liabilities
total money owed or expected to be owed by the insurance company.
View glossary entryTotal Revenue
premiums, revenue, investment income, and income from other sources.
View glossary entryTravel 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.
View glossary entryUmbrella 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
View glossary entryUnallocated Loss Adjustment Expense (ULAE)
loss adjustment expenses that cannot be specifically tied to a claim.
View glossary entryUnauthorized Reinsurance
reinsurance placed with a company not authorized in the reporting company's state of domicile.
View glossary entryUnderinsured 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.
View glossary entryUnderlying 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.
View glossary entryUnderwriter
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.
View glossary entryUnderwriting
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.
View glossary entryUnderwriting Risk
section of the risk-based capital formula calculating requirements for reserves and premiums.
View glossary entryUnearned Premium
amount of premium for which payment has been made by the policyholder but coverage has not yet been provided.
View glossary entryUnearned Premium Reserve
all premiums (fees) received for coverage extending beyond the statement date; appears as a liability on the balance sheet.
View glossary entryUniversal 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.
View glossary entryUnpaid Losses
claims that are in the course of settlement. The term may also include claims that have been incurred but not reported.
View glossary entryValued Policy
an insurance contract for which the value is agreed upon in advance and is not related to the amount of the insured loss.
View glossary entryValued 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.
View glossary entryVariable 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.
View glossary entryVariable Life Insurance
life insurance whose face value and/or duration varies depending upon the value of underlying securities.
View glossary entryVariable 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.
View glossary entryViatical Settlements
contracts or agreements in which a buyer agrees to purchase all or a part of a life insurance policy.
View glossary entryVision
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.
View glossary entryWarrant
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.
View glossary entryWarranty
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 for defective or incomplete work and cost of parts and labor necessary to restore a product's 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.
View glossary entryWhole 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.
View glossary entryWhole 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.
View glossary entryWorkers' 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.
View glossary entryWritten 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.
View glossary entry