Insurance Glossary Terms
What is Agency Billing?
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
What is an Alien Company?
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
What are Allied Lines?
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
What is an assessable policy?
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
Assume
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
Audit Premiums
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
Authorized Reinsurer
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
Automobile Residual Market
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
Bulk Reserves
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
Captive Insurance Company
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
Cede
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
Jurat Page
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
Ceded Unearned Premium
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
Ceding Commission
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
Certified Reinsurer
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
Claim Adjustment Expenses
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
Claims-Made Basis
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
Coinsurance
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
Demutualization
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
Development
A provision in an insurance policy under which the insured agrees to carry a certain amount of insurance expressed as a percentage of the value of the property. It provides for the full payment, up to the amount of the policy, of all losses if the insurance carried is at least equal to the specified percentage. If the insured fails to carry the necessary amount of insurance, he or she assumes a proportionate share of the loss.
To pay a reinsurance premium to an assuming company (reinsurer) in exhange for that company accepting all or part of the insurance (or reinsurance) on a risk or exposure. Opposite of assume.
The provision in a contract of insurance or reinsurance that coverage applies only to losses which are reported during the term of the contract. (Losses occurring before a new contract term as sometimes excluded but can be covered by the addition of "prior acts" coverage. Losses reported after the contract term are sometimes covered by the addition of "tail" coverage.) Once the policy period is over in claims-made coverage, the number of claims is known and an approximate estimate of the underwriter's liability can be made. On the other hand, the traditional "occurrence" liability insurance provides coverage for losses which occurred during the policy period, regardless of when the claims are reported. With the traditional "occurrence" liability coverage, because of late reported claims, the underwriter may not discover the extent of liability for years to come. When claims-made coverages are renewed, however, losses which occurred during periods when the policy was in force are covered if reported during the renewal term. In summary, the traditional occurrence basis is similar to the claims-made basis if the latter is consistently renewed and has added to it both "prior acts" and "tail" coverages.
Conversion of a mutual insurance company to a stock insurance company. May involve full conversion to a stock company (resulting in distribution of the value of the company in cash or shares of stock to participating policyholders) or formation of a mutual holding company (typically without such a distribution).
Changes in reserves for unpaid claims that are recorded in a future period and relate to previously recorded losses. Loss reserves are estimates and subsequent changes in those reserve estimates are considered development. Increases in reserves recorded in a subsequent period are considered adverse or unfavorable development while decreases in reserves recorded in a future period are considered favorable development.
In reinsurance, an allowance (usually a percentage of the ceded reinsurance premium) made by the reinsurer for part or all of a ceding company's acquisition and other costs. The ceding commission may also include a profit factor for the ceding company.
Mechanism established by state in which all automobile insurers in the state participate to make coverage available to car owners who are unable to obtain auto insurance in the regular market. Generally, each state uses one of three systems: an automobile insurance plan, an automobile reinsurance facility or an automobile joint underwriting authority. These residual market mechanisms (shared market) also exist for commercial auto coverages through pools such as the Commercial Auto Insurance Procedure (CAIP).
A reinsurer is "authorized" when it's been licensed and/or accredited by the state insurance department of the ceding company's state of domicile. A ceding insurer is allowed to take credit in its balance sheet for reinsurance recoverables on paid claims, for ceded unearned premiums and for ceded unpaid claims ont he risks reinsured. However, if the reinsurance is placed with an unauthorized or certified reinsurance company, this benefit is reduced to the extent that the amounts are not collateralized.
A term used by accident and health writers instead of the term "loss adjustment expenses" to indicate the costs incurred in settling a loss other than the actual
To accept all or part of a ceding company's insurance or reinsurance on a risk or exposure exhange for receiving a reinsurance premium. Opposite of cede.
Page 1 of the Annual Statement which provides company information such as date of incorporation, state of domicile, officers and directors, as well as a signed affidavit of compliance with statutory accounting rules.
To the extent an insurer pays a reinsurance premium that is designed to cover future periods, the premium should be recognized by the reinsurer as earned over that future period and by the insurer as a reduction of premium earned over that future period. This is accomplished by the reinsurer by recording an assumed unearned premium and by the insurer by recording a ceded unearned premium. The unearned premium is a balance sheet liability. Under statutory accounting, the ceded unearned premium is a reduction of unearned premiums. Under GAAP, the ceded unearned premium is recorded as an asset called "prepaid reinsurance premiums."
An insurer or reinsurer domiciled outside the U.S. But conducting insurance or reinsurance business within the U.S.
This classification of reinsurer does not apply in all states. Like authorized reinsurers, certified reinsurers must be designated as such by the ceding company's state of domicile. Certified reinsurers would otherwise be unauthorized reinsurers but apply for certified status in order to qualify for reduced collateral.
A term for forms of insurance allied with property insurance, covering such perils as sprinkler leakage, water damage and earthquake.
Insurance policy that is part of a group of policies which may be assessed additional premium under defined circumstances such as poor loss experience for the group.
Premiums based on data from insured's records such as payroll data for workers' compensation policies. The insured's records are subject to periodic audit for purposes of verifying premium amounts.
Loss and LAE reserves recorded in addition to case and IBNR reserves. These are reported in the Annual Statement with IBNR reserves and may be positive or negative adjustments that cause the total of case, IBNR and bulk reserves to equal management's best estimate of unpaid incurred claims.
An insurance entity that provides insurance coverage to its parent and affiliated companies or its other owners. Often formed by the parent or an association of similar business entities to obtain less costly insurance and achieve potential tax savings (a form of self-insurance through a separate legal entity). Often formed offshore in countries with favorable regulatory environments or, in more recent years, in states that have created favorable regulatory environments for captive companies. The term is also used to refer to a risk retention group.
A billing system in which the agent bills the insured for the premium, rather than the insurance company.
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