Definitions Flashcards
unpaid claim estimate
the actuary’s estimate of the obligation for future payment resulting from claims due to past events
qualified actuary
meets the education, experience, and continuing education requirements of the SQS for the SAO as set forth in the Qualification Standards for actuaries issuing opinions in the US promulgated by the AAA and both maintains an accepted actuarial designation AND is a member of a professional actuarial association that requires adherence to the AAA code of conduct and USQS and participates in the ABCD for members practicing in the US
SAO Opinion
In my opinion, the amounts carried in Exhibit A on account of the items identified [A] meet the requirements of the insurance laws in state X, [B] are computed in accordance with accepted actuarial standards and principles, [C] make a reasonable provision for all unpaid loss and loss adjustment expense obligations of the company under the terms of its contracts and agreements, and [D] make a reasonable provision for the unearned premium reserves for long duration contracts
materiality
an omission, understatement, or overstatement in a work product is material if it is likely to affect either the intended user’s decision making or their reasonable expectations
nuclear verdict
extremely large jury award, typically in excess of $100M and often including substantial punitive damages
FL Hurricane Catastrophe Fund
a state trust fund that provides reimbursement to residential property insurers for a portion of their FL cat losses
certified reinsurer
non-US reinsurer domiciled in a jurisdiction designated by the NAIC as a Qualified Jurisdiction (Bermuda, France, Germany, Ireland, Japan, Switzerland, UK) that would have been categorized as unauthorized prior to 2012 and has attained certification from the reporting entity’s domiciliary state
reinsurance commutation
an agreement that terminates the relationship between an insurer and a reinsurer by settling all obligations with an immediate payment
novation
the replacement of one of the parties in a reinsurance agreement with the consent of all parties involved
fronting carrier
an insurer that cedes a large portion (more than 75%) of its business so the reinsurer can avoid regulatory oversight
guaranteed cost policy
a policy where an entity transfers all liability to an insurer for a fixed premium
retrospectively rated policy
entity transfers all liability to an insurer based on actual loss experience where the final premium depends on an audited exposure base and loss experience
self-insurance
a policy where an entity retains all risk OR purchases coverage for large claims only
captive
affiliated insurance companies that can assume some or all of an entity’s liability and are subject to less stringent regulation than admitted carriers
deductible reimbursement
a policy written by a captive that directly reimburses the entity for its deductible obligations (the entity’s obligations to the insurer but not the claimants)
