Glossary Terms R - S

Question 1

Rate service organization

Answer 1

An organization that is formed by, or on behalf of, a group of insurers to develop rates for those insurers, and to file rates with the insurance department on behalf of its members. They also act as a collection point for actuarial data.

Question 2

Rebating

Answer 2

Any inducement offered in the sale of insurance products that is not specified in the policy.

Question 3

Reciprocal exchange

Answer 3

An unincorporated group of individuals who mutually insure one another, each separately assuming a share of each risk.

Question 4

Reciprocity

Answer 4

A situation in which two parties provide the same help or advantage to each other (for example, Producer A living in State A can transact business as a non-resident in State B if State B‘s resident producers can transact business in State A).

Question 5

Recurrent disability

Answer 5

A policy provision that specifies a period of time during which the recurrence of an injury or illness will be considered a continuation of a prior period of disability.

Question 6

Reduction

Answer 6

Lessening the possibility or severity of a loss.

Question 7

Reinsurance

Answer 7

A form of insurance whereby one insurance company (the reinsurer) in consideration of a premium paid to it, agrees to indemnify another insurance company (the ceding company) for part or all of its liabilities from insurance policies it has issued.

Question 8

Renewability clause

Answer 8

A clause that defines the insurance company’s and the insured’s right to cancel or renew coverage.

Question 9

Representations

Answer 9

Statements made by the applicant on the insurance application that are believed to be true, but are not guaranteed to be true.

Question 10

Rescission

Answer 10

The termination of an insurance contract due either to material misrepresentation by the insured or by fraud, misrepresentation, or duress on the parts of the agent/insurer.

Question 11

Reserve

Answer 11

An amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.

Question 12

Residual disability

Answer 12

Type of disability income policy that provides benefits for loss of income when a person returns to work after a total disability, but is still not able to perform at the same level as before becoming disabled.

Question 13

Respite care

Answer 13

A type of temporary health or medical care provided either by paid workers who come to the home or by a nursing facility where a patient stays to give a caregiver a short rest.

Question 14

Restorative care

Answer 14

An area of dentistry that involves treatments that restores functional use to natural teeth such as fillings or crowns.

Question 15

Rider

Answer 15

Any supplemental agreement attached to and made a part of the policy indicating the policy expansion by additional coverage, or a waiver of a coverage or condition.

Question 16

Risk

Answer 16

Uncertainty as to the outcome of an event when two or more possibilities exist.

Question 17

Risk retention group

Answer 17

A liability insurance company owned by its numbers, which are exposed to similar liability risks by virtue of being in the same business or industry.

Question 18

Risk, speculative

Answer 18

The uncertainty or chance of a loss occurring in a situation that involves the opportunity for either loss or gain.

Question 19

Risk, Standard

Answer 19

An applicant or insured who is considered to have an average probability of a loss based on health, vocation and lifestyle.

Question 20

Risk, Substandard

Answer 20

An applicant or insured who has a higher than normal probability of loss, and who may be subject to an increased premium.

Question 21

Service plans

Answer 21

Insurance plans where the healthcare services rendered are the benefits instead of monetary benefits.

Question 22

Short– Rate cancellation

Answer 22

Canceling the policy with a less than proportionate return of premium.

Question 23

Short term disability insurance

Answer 23

A group or individual policy that covers disabilities of 13 to 26 weeks, and in some cases for a period of up to two years.

Question 24

Sickness

Answer 24

A physical illness, disease, or pregnancy, but not a mental illness.

Question 25

Skilled nursing care

Answer 25

Daily nursing care or skilled care, such as administration of medication, diagnosis, or minor surgery that is performed by or under the supervision of a skilled professional.

Question 26

Standard provisions

Answer 26

Requirements approved by state law that must appear in all insurance policies.

Question 27

Stock companies

Answer 27

Companies owned by the stockholders whose investments provide the capital necessary to establish and operate the insurance company.

Question 28

Subrogation

Answer 28

The legal process by which an insurance company seeks recovery of the amount paid to the insured from a third-party who may have caused the loss.

Question 29

Superintendent (commissioner, director)

Answer 29

The head of the state department of insurance.