» Common Terms and Definitions
|93 Terms found - Page: 1 » 2 ... 4 |
|Accounting Period Earned Premium  |
Consists of the unearned premium reserve at the beginning of an accounting period added to the premium booked during the period, minus the unearned premium reserve at the end of the period.
|APA  |
1. American Psychiatric Association
|ARAP  |
ARAP: Assigned Risk Adjustment Program - used by some states to adjust premium for Assigned Risk policies - This is an adjustment to the experience modification factor. NCCI includes the adjustment in all experience mod worksheets, but not all states use it.
|Basic Premium:  |
Premium that covers the insurer's administrative costs plus profit.
|Bonus-malus contracts  |
Increases in subsequent premiums whenever an insurance claim is presented
|Bounce Back  |
A second promotion offer made to consumers in order to encourage additional purchases; e.g. a coupon for a second purchase placed within a product package, or a second offer of a different premium enclosed when the first premium is mailed.
|break-even point  |
The price at which an option's cost is equal to the proceeds acquired by exercising the option. For a call option, it is the strike price plus the premium paid. For a put option, it is the strike price minus the premium paid. Also, the price at which a securities transaction produces neither a gain nor a loss. Also, the volume of sales at which a company's net sales just equals its costs.
|bullet contract  |
A GIC purchased with a single premium.
|Buy-Back Deductible  |
At any time during the policy period, the insured has the option of paying extra premium to reduce the amount of the deductible for future losses.
|Ceding Commission  |
Credited to the reinsured against the reinsurance premiums to reimburse the reinsured for its underwriting and issuing expenses.
|Ceding Company  |
Purchases reinsurance and is an insurance company that transfers premiums and losses to the reinsurer.
|Combined Ratio  |
The percentage of each premium dollar a property/casualty insurer spends on claims and expenses. When the combined ratio is over 100, the insurer has an underwriting loss. A combined ratio under 100 means an underwriting profit.
|Commission  |
The insurance agent's commission is typically a percentage of the insurance policy premium.
|Composite Rate  |
A single rate with a single basis of premium (such as sales receipts) that covers the insured for a wide variety of hazards. Allows for easier computation of the insurance premium when numerous coverages are involved.
|Consideration  |
A characteristic of a legal contract: The thing of value exchanged for the performance promised in the contract. In insurance, the policy premium is the consideration.
|Display Loader  |
A premium that is built into a display, and received free by the dealer when the display is taken down. Usually related to a consumer self-liquidating premium offer of the same item .
|Dividends to Insurance Policyholders  |
Dividends are a partial premium refund, not a taxable distribution. They're not guaranteed. Policies that pay dividends are called participating policies.
|Earned Premium  |
That portion of the premium written during the period plus the unearned premium reserve at the beginning of the period that was actually earned during the period.
|ELP Excess Loss Premium Factor  |
In a retrospective rating plan, a rate limits the amount of any one loss to be included in the rating formula. Example - $250,000 loss limitation would include only the first $250,000 of each occurrence in the losses when calculating the premium.
|Estimated Premium  |
The amount of insurance premium the insured would be required to pay based on certain estimated exposures at policy exception.
|Expense Ratio  |
Formula used by insurers: administrative expenses divided by earned premiums. The expense ratio is the percentage of each premium dollar the insurer spends on expenses - overhead, marketing, and commissions.
|Experience Modification Factor  |
A number applied to the manual premium to either increase or decrease the final premium based on the insured's losses. The resultant "ex-mod" is used to compare an employer's loss history to the average of their industry.
|Exposure  |
Refers to the basis upon which insurance premium is determined, such as payroll, number of employees, sales or units. The exposure base is calculated by taking the exposure times the rate equals the premium.
|Final Premium  |
The total premium charged an employer for the insurance period, prior to any retrospective adjustments or policyholder dividends
|Finite Risk Insurance Plan  |
A hybrid type of risk financing plan that transfers a limited amount of risk to an insurer. The risk that is transferred to the insurer is the risk that covered losses and expenses will be greater than the premium plus investment income earned by the insurer.
|Gross Earnings Form  |
Business interruption insurance under which the amount of insurance to be carried is based on the insuredís gross earnings (net revenue minus cost of goods sold or cost of services provided). The premium rate is dependent on the amount of insurance plus the coinsurance percentage to be used. T
|Gross Premium  |
The net premium plus any loads for an insurance policy.
|Guaranteed Cost  |
WC premium based on a specific fixed price or an adjustable formula that is not based on the loss experience
|Guaranteed renewable policy  |
A policy which the insured has the right to continue in force by the timely payment of premiums to a specified age, (usually age 50) during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force but may make changes in premium rates for the entire policyholder classification
|Hard insurance market  |
An insurance market characterized by difficulty in obtaining coverage and by high premiums.