A

Question 1

Accident

Answer 1

an unexpected event or circumstance without deliberate intent.

Question 2

Accident Insurance

Answer 2

insurance for unforeseen bodily injury.

Question 3

Actual Cash Value

Answer 3

repayment value for indemnification due to loss or damage of property; in most cases it is replacement cost minus depreciation.

Question 4

Actuarial Report

Answer 4

(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.

Question 5

Actuary

Answer 5

business professional who analyzes probabilities of risk and risk management including calculation of premiums, dividends and other applicable insurance industry standards.

Question 6

Adjuster

Answer 6

a person who investigates claims and recommends settlement options based on estimates of damage and insurance policies held.

Question 7

Admitted Assets

Answer 7

insurer assets which can be valued and included on the balance sheet to determine financial viability of the company.

Question 8

Admitted Company

Answer 8

an insurance company licensed to do business in a state(s), domiciled in an alternative state or country.

Question 9

Advance Premiums

Answer 9

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.

Question 10

Adverse Selection

Answer 10

the social phenomenon whereby persons with a higher than average probability of loss seek greater insurance coverage than those with less risk.

Question 11

Advisory Organization

Answer 11

a group supported by member companies whose function is to gather loss statistics and publish trended loss costs.

Question 12

Affiliate

Answer 12

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.

Question 13

Agent

Answer 13

an individual who sells, services, or negotiates insurance policies either on behalf of a company or independently.

Question 14

Aggregate

Answer 14

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.

Question 15

Aircraft

Answer 15

coverage for aircraft (hull) and their contents; aircraft owners’ and aircraft manufacturers liability to passengers, airports and other third parties.

Question 16

Allocated Loss Adjustment Expenses (ALAE)

Answer 16

an estimate of the claims settlement associated with a particular claim or claims.

Question 17

Alien Company

Answer 17

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.

Question 18

Allied Lines

Answer 18

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.

Question 19

All-Risk

Answer 19

also known as open peril, this type of policy covers a broad range of losses. The policy covers risks not explicitly excluded in the policy contract.

Question 20

Appraisal

Answer 20

an estimate of value.

Question 21

Arbitration

Answer 21

a binding dispute resolution tactic whereby a conciliator with no interest in the outcome intercedes.

Question 22

Assessed Value

Answer 22

estimated value for real or personal property established by a taxing entity.

Question 23

Asset

Answer 23

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

Question 24

Asset Risk

Answer 24

in the risk-based capital formula, risk assigned to the company’s assets

Question 25

Assigned Risk

Answer 25

A governmental pool established to write business declined by carriers in the standard insurance market.

Question 26

Assumed Reinsurance

Answer 26

the assumption of risk from another insurance entity within a reinsurance agreement or treaty.

Question 27

Authorized Company

Answer 27

an insurer licensed or admitted to do business in a particular state.

Question 28

Authorized Control Level Risk Based Capital

Answer 28

theoretical amount of capital plus surplus an insurance company should maintain.

Question 29

Authorized Reinsurance

Answer 29

reinsurance placed with a reinsurer who is licensed or otherwise allowed to conduct reinsurance within a state.