A Flashcards
Accident
an unexpected event or circumstance without deliberate intent.
Accident Insurance
insurance for unforeseen bodily injury.
Actual Cash Value
repayment value for indemnification due to loss or damage of property; in most cases it is replacement cost minus depreciation.
Actuarial Report
(PC Insurance) 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.
Actuary
business professional who analyzes probabilities of risk and risk management including calculation of premiums, dividends and other applicable insurance industry standards.
Adjuster
a person who investigates claims and recommends settlement options based on estimates of damage and insurance policies held.
Admitted Assets
insurer assets which can be valued and included on the balance sheet to determine financial viability of the company.
Admitted Company
an insurance company licensed to do business in a state(s), domiciled in an alternative state or country.
Advance Premiums
occur when a policy has been processed and the premium has been paid prior to the effective date. These are a liability to the company and not included in written premium or the unearned premium reserve.
Adverse Selection
the social phenomenon whereby persons with a higher than average probability of loss seek greater insurance coverage than those with less risk.
Advisory Organization
a group supported by member companies whose function is to gather loss statistics and publish trended loss costs.
Affiliate
a person or entity that directly, or indirectly, through one or more other persons or entities, controls, is controlled by or is under common control with the insurer.
Agent
an individual who sells, services, or negotiates insurance policies either on behalf of a company or independently.
Aggregate
the maximum dollar amount or total amount of coverage payable for a single loss, or multiple losses, during a policy period, or on a single project.
Aircraft
coverage for aircraft (hull) and their contents; aircraft owners’ and aircraft manufacturers liability to passengers, airports and other third parties.
Allocated Loss Adjustment Expenses (ALAE)
an estimate of the claims settlement associated with a particular claim or claims.
Alien Company
an insurance company formed according to the laws of a foreign country. The company must conform to state regulatory standards to legally sell insurance products in that state.
Allied Lines
coverages which are generally written with property insurance, e.g., glass, tornado, windstorm and hail; sprinkler and water damage; explosion, riot, and civil commotion; growing crops; flood; rain; and damage from aircraft and vehicle, etc.
All-Risk
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.
Appraisal
an estimate of value.
Arbitration
a binding dispute resolution tactic whereby a conciliator with no interest in the outcome intercedes.
Assessed Value
estimated value for real or personal property established by a taxing entity.
Asset
probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events. An asset has three essential characteristics: it embodies a probable future benefit that involves a capacity, singly or in combination with other assets, to contribute 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.
Asset Risk
in the risk-based capital formula, risk assigned to the company’s assets
Assigned Risk
A governmental pool established to write business declined by carriers in the standard insurance market.
Assumed Reinsurance
the assumption of risk from another insurance entity within a reinsurance agreement or treaty.
Authorized Company
an insurer licensed or admitted to do business in a particular state.
Authorized Control Level Risk Based Capital
theoretical amount of capital plus surplus an insurance company should maintain.
Authorized Reinsurance
reinsurance placed with a reinsurer who is licensed or otherwise allowed to conduct reinsurance within a state.