An employer-sponsored defined contribution retirement plan that provides certain tax benefits to both employees and employers.

The giving up of property by the insured to the insurance company in order to collect the value of the property rather than restoring or

The transfer of ownership of a life insurance policy to another person or entity. The assignee becomes the new policy owner.

Responsibility without regard to fault or negligence.

Payment of a portion of a death benefit to the insured prior to the insured’s death if the insured is diagnosed as terminally ill.

An unplanned event, definite as to time and place, that results in injury or damage to a person or property.

A benefit that typically equals the face value of the contract or principal sum, paid in addition to the face amount of a life insurance

Process to help quantify an organization’s assets, liabilities, stakeholder equities, and cash flows at a point in time.

In financial management, the measurement of the percentage return of average annual cash flows on initial investment.

Organized set of accounting methods, procedures, and controls to collect, record, classify, and present accurate and timely financial data for use in management decision-making.

Money owed to the insured by the insured’s clients.

The period during which deposits are made and investment earnings accrue between purchase of a deferred annuity and the distribution of funds.

During the accumulation period of a deferred annuity, the amount paid for the annuity, plus interest earned, less the amount of any withdrawals and fees.

One organization takes over another organization and is established as the new owner with the ownership interests continuing unchanged.

An event produced by a physical cause of nature, and not within human control or intervention.

An event produced by a physical cause of nature, and not within human control or intervention.

Planned acceptance of losses to be financed internally through the use of deductibles on insurance policies, loss sensitive insurance plans, and deliberate non-insurance. See Passive

Person’s ability to perform such activities as bathing, dressing, toileting, maintaining continence, transferring, and eating.

Replacement cost less an allowance for insurance depreciation, wear and tear, or obsolescence.

Provide information for risk financing from the calculation of future payouts of uncertain estimates.

An individual who calculates premium rates, reserves, dividends, and other important statistics.

Care requiring constant monitoring and designed to treat or cure an illness, injury, or condition.

Abbreviation for Actual Cash Value. Defined as replacement cost less an allowance for insurance depreciation, wear and tear, or obsolescence.

Person’s ability to perform such activities as bathing, dressing, toileting, maintaining continence, transferring, and eating.

Assets whose value is included in the annual statement of an insurance company to insurance regulators; include cash and short-term deposits readily convertible into cash,

An insurance company authorized to do business in a state by that state’s insurance department, including being subject to the department’s regulations regarding financial security,

An insurance company that is authorized and licensed to do business in a state.

A facility that provides long-term care services to adults during the day.

Individuals with poor health who are more apt to apply for or continue insurance than those with average or better-than-average health.

A relationship, express or implied, wherein one party (principal) delegates authority to another person (agent or proxy) to undertake certain activities for the principal. The

A captive owned by an insurance agency or agencies formed for the purpose of insuring the risks of agency clients or to participate with an

An office where insurance is sold. It may be directed towards property and liability insurance or life and health insurance, or both. Also, it might

A representative of one or more companies, who solicits, completes applications, collects initial premiums, issues binders and/or conditional receipts, delivers policies, and services insurance contracts.

A person empowered to act on behalf of another.

The re-insurer pays when the ceding company’s aggregate net losses exceed a predetermined amount or proportion of premium income. For example, reinsurance covers 90% of

The maximum amount of protection for all losses occurring under an insurance policy or funding arrangement during the specified term of the contract (usually one

Similar to LPT’s in how they treat existing losses and the development of premium. However, unlike an LPT, a retrospective aggregate loss contract addresses gaps

An expense directly assigned to or that arises from a particular claim; examples of Allocated Loss Adjustment Expense include court fees and outside legal counsel.

An accounting concept; expense (short-term) or capitalizing (long-term) of intermediate term costs (development costs); writing off the value of an intangible asset over its useful

Acronym for Agent of Record

Acronym for Associate Surplus Lines Insurance

Anything of commercial value, including real or personal, tangible or intangible property.

When one knowingly and voluntarily exposes themselves to a known danger.

Used when an application or medical examiner’s report regarding a life or health insurance applicant reveals conditions or situations, past or present, about which more

An accounting concept, a report on the auditor’s opinion of the correctness of the information and the freedom from material misstatements.

A land motor vehicle, trailer, or semi-trailer designed for use on public roads, but does not include “mobile equipment.”

Persons who are granted insured status because they fit into a category or class of persons described in the policy provisions.

A risk control technique which totally eliminates an exposure to avoid the chance of a loss; avoidance eliminates both positive and negative outcomes.

In computing workers compensation experience modifications, a specific value taken from a rating manual table used to limit the effect of a single severe accident

A procedure for making the effective date of a policy earlier than the application date. Backdating is often used to make the age at which

An annuity contract clause that enables the owner of the contract to withdraw the invested money without surrender penalties if the annual interest rate drops

Person or organization that has possession of the property of others, usually for storage, repair, or servicing. A dry cleaning operation is a common example

Situation in which property of one has been entrusted to another. A bailment can be for the benefit of either party or both. The degree

Person or organization that owns property that has been entrusted to another. The owner of a suit who has entrusted it to a dry cleaning

An accounting concept, a measurement of the assets and equities (liabilities and owners’ equity) in an organization as of a specific point in time.

In computing workers compensation experience modifications, a specific value taken from a rating manual table used to limit the effect of a single severe accident

Provides limited benefits for hospital services, supplies and some physician expenses.

In retrospectively rated plans, usually a percentage of the standard premium, often determined by multiplying the standard premium by a basic premium factor. It provides

In retrospectively rated plans, a factor based on the Table of Expense Ratios, the Table of Insurance Charges, and the individual loss limitation if selected.

Manual rate that is adjusted to compensate for varying exposure to risk.

The process of comparing an organization’s business processes and performance measures to another organization’s processes and performance measures to provide a “snapshot” of the organization’s

An individual who is eligible to receive or is receiving benefits under an insurance policy. (Also see Irrevocable Beneficiary, Primary Beneficiary, Secondary Beneficiary, and Contingent

Factors calculated for each state by the National Council on Compensation Insurance (or other workers compensation rating agencies) representing the impact of regulatory changes on

The maximum length of time benefits are paid.

Discounted values of the cash inflows divided by the net investment. Used to compare the net present value (PV) of various projects, particularly when funds

Authority that is granted to the insurance agent as outlined in the company’s agent contract.

A method for combining the value of property of different types or at different locations into a single limit of insurance on a property insurance

Acronym for Board of Directors

Bodily harm, sickness, or disease, including death that results from the harm, sickness, or disease.

Contract that guarantees the performance of a contract, as in surety bonding, or protects against the dishonesty of employees, and in fidelity bonding. Unlike many

Historical cost less accumulated depreciation as recorded on the organization’s accounting records.

Commonly known as loss rating; losses are trended to ultimate values for a pre-set number of years; units of exposure are trended for those same

Failure to live up to the conditions or warranties contained in a contract.

Additional development on known claims or the increase in reserve value as the claim is investigated and settled.

Planned retention based upon the portion of expected losses the organization is willing and able to retain.

The taking of property from within a premises by a person unlawfully entering or breaking out of a premises as evidenced by marks of forcible

Includes trade, profession, or occupation.

As related to the Business Judgment Rule, action must be taken in making business decisions. Not taking action is protected if it results from a

Knowing what is right or wrong in the workplace and then doing what is right; fundamental ground rules of our work lives; the process of

Single most powerful defense available to a director or officer and recognizes that not all decisions of the directors or officers will benefit the organization

Insurance coverage that enables a business to remain open while the key person or business owner is disabled and unable to work.

An arrangement for the orderly disposition or transfer of a business interest that spells out what events specifically trigger the disposition of the business interest

A policy, typically disability insurance or long-term care insurance, that can be cancelled at any time, or at a specified time, by the insurer.

The termination of the insurance policy by either party.

Acronym for Chief Acquisitions Officer

Include management and acquisition expenses, domicile expenses such as annual licensing fees, actuarial expense, letter of credit expense, and other expenses not related to losses.

A closely held insurance company whose insurance business is supplied by and controlled by its owners and in which the insureds are the beneficiaries (adapted

Group of individually owned captives that combine to re-insure one another; risk sharing among captives. See Pooling.

Professional society for actuaries in areas of insurance work other than life insurance. This society grants the designation of Associate and Fellow of the Casualty

A team that carefully reviews and monitors the entire treatment process when unusually high expenses are projected or incurred for a condition.

Amount the claims adjuster puts on an individual claim that has not yet been paid; there is no provision for development and IBNR (incurred but

The amount of cash due an insured who surrenders a Cash Value Life Insurance policy.

The amount of cash due an insured who surrenders a Cash Value Life Insurance policy.

Acronym for Chief Brand Officer

CDHC or Consumer-Driven Healthcare – Originated in the late 1990’s with the intention of increasing healthcare consumer awareness of the rising cost of healthcare by

Acronym for Chief Executive Officer

Certified Insurance Counselor (CIC) is an insurance professional designation. The CIC program was started by the National Alliance for Insurance Education & Research in Austin, Texas in 1969 by founder

Acronym for Chief Information Officer

Acronym for Chartered Life Underwriter

Acronym for Chartered Life Underwriter

A federal regulation that requires employers with 20 or more employees in a prior year to allow employees and their covered dependents who lose employer-sponsored

Assignment of a life insurance policy or its value as security for a loan. In the event of death of the assignor (owner/insured), the creditor

The right of a beneficiary to receive in a single lump-sum the remaining payments under an installment option selected for the settlement of the proceeds

Providers are invited to present general proposals, ideas, or concepts for handling the insurance coverage and services without specific pricing of any coverage or service;

An insurance contract in which the insurer’s promise is conditioned upon (dependent upon) certain things occurring or being done.

A form normally required to be signed by an agent and given to a prospective life insurance policy insured/owner at the time a new application

A federal regulation that requires employers with 20 or more employees in a prior year to allow employees and their covered dependents who lose employer-sponsored

Also known as COPE – A term referring to a building structure’s construction, occupancy, protection and exposure; used by underwriting to determine the risk of

CDHC or Consumer-Driven Healthcare – Originated in the late 1990’s with the intention of increasing healthcare consumer awareness of the rising cost of healthcare by

The time period during which the insurer is not obligated to pay a claim (usually two years, but depending on state law) because of material

A provision in an insurance policy setting forth the conditions and the period of time during which an insurer may contest or void a policy.

The person who receives death benefits when a primary beneficiary does not survive the insured.

Body of law that governs the performance of a promise. An enforceable contract must have the following four characteristics: competent parties, agreement or assent, legal

Liability of another party assumed under a contract or agreement, either expressed or implied, as opposed to liability incurred directly, as in tort.

Assumption or limiting exposures of certain liabilities relating to another party. See non-insurance risk transfer.

When a Liability Insurance policy says it and another company will pay a share of the loss equally until either the loss is paid or

Provision found in group health policies, specifying how benefits will be paid when more than one insurer covers an insured.

A flat fee the insured pays each time covered services are provided or prescription drugs are purchased and is paid directly to providers, facilities or

A term referring to a building structure’s construction, occupancy, protection and exposure; used by underwriting to determine the risk of offering a policy.

A legal entity considered to be a separate tax and legal entity having an existence that is separate and distinct from its owners.

In statistics, a measure of the strength of a linear relationship between two variables ranging from -1 to +1. When the correlation coefficient r =

COVID-19 is a disease caused by a new strain of coronavirus. ‘CO’ stands for corona, ‘VI’ for virus, and ‘D’ for disease. Formerly, this disease

Underwriter

Acronym for Certified Risk Manager

A liquidity ratio that measures the organization’s ability to pay bills over the short term; current assets divided by current liabilities.

Acronym for Directors & Officers

Factor used in the workers compensation experience modification plan to separate the expected total losses into primary and excess losses. A D-ratio is the normal

Financial ratios measuring the ability of an organization to repay its creditors over the long term. Also a measure of the degree of leverage, or

Measure of the relationship of debt to equity; total debt divided by stockholders’ equity.

An accounting concept; the reduction in inventory and a charge against income for the use of natural resources, e.g., oil, coal, forest growth.

The writing/selling of insurance by mail or phone.

The writing/selling of insurance by mail or phone.

A system where the producer is an employee of the insurer, writing direct and only with that company, and is not an independent contractor.

Liability resulting from a director or officer of an organization committing a negligent act or omission, misstatement or misleading statement.

The benefit payable under a disability income policy or a disability provision of some other policy, such as a life insurance contract.

Provides a portion of income lost as the result of a total or partial disability.

When an insured once had the money and/or “securities,” and now does not know where they are.

The organization’s average cost of capital, rate income can be earned, or its weighted cost of capital, commonly referred to as the WACC.

Factor used in the workers compensation experience modification plan to separate the expected total losses into primary and excess losses. A D-ratio is the normal

Liability estimates that have been reduced to reflect the potential to earn investment on funds set aside to pay losses which have occurred but not

A dividend plan is a guaranteed cost plan with a dividend option.

Distributions to shareholders of a corporation’s earnings. Dividends can also be distributed to policy owners of participating insurance policies that are usually issued by mutual

Acronym for Direct Notice of Cancellation

During a dispute being decided by the courts, the courts ask what a reasonable person would expect in a particular situation.

One that is domiciled in a particular state, admitted or permitted to operate in their state of domicile and are closely regulated in that state

An insurance company that is incorporated in, domiciled in, and organized under the laws of a state.

Legal and regulatory jurisdiction under which an insurance company chooses to be formed and operate.

An accelerated depreciation method used for tax management purposes.

Acronym for Disaster Recovery

As related to the Business Judgment Rule, a decision must be made based on reasonable and relevant information.

Actions taken to investigate documents and records of a business and/or person prior to examination of a proposed action before it is undertaken, executing a

The length of time long-term care insurance will pay maximum daily benefits.

The Dynamics of Selling Series is a multi-day insurance specific sales training course. Designed and taught by leading, insurance sales professionals who are active in

Acronym for Excess & Surplus

Amount of the premium that has been “used up” during the term of a policy; for example, if a one-year policy has been in effect

Cumulative net income, also known as retained earnings.

After-tax net income divided by number of common shares of stock outstanding.

Acronym for Employee Benefits

A general class of risk; risks arising from operations, economy, financial marketplace or entrepreneurial activities.

Future stream of income assigned to the property.

The date an insurance policy goes into effect, sometimes referred to as the policy date.

The length of time an insured must be disabled under a disability income and long-term policy before receiving benefits.

When computing workers compensation experience modifications, the factor taken from actuarial tables used to calculate total expected losses for the specific classification given the audited

New exposures to loss for which a risk treatment has not been implemented; existing exposures to loss that are evolving, difficult to quantify and may

In statistics, the rule that nearly all values lie within 3 standard deviations of the mean for a normal distribution.

A person in the service of another under a contract of hire, who acts under the direction and control of the person who hired him/her.

Any plan, fund, or program established or maintained for the purpose of providing employee benefits to its participants or beneficiaries (EISA).

An agent of the company in a limited agency capacity.

A percentage of eligible employee participation required before an insurer will write an employer-sponsored group plan.

Any plan that provides retirement benefits to employees or defers income for employees to periods after termination of employment.

A federal regulation enacted to protect participants and their beneficiaries. ERISA contains provisions that stand on their own and also added or amended provisions of

Any plan that provides medical care or benefits for sickness, accident, disability, death, unemployment, vacation, training, day care, scholarships, or prepaid legal services, or any

The amount of premium an employer pays for employees and their dependents under the employer-sponsored group plan.

Acronym for Experience Modification Rate

Used by an insurer to clarify or make revisions to particular provisions of a policy. Also called “riders.”

A type of permanent life insurance where the cash value will be equal to the originally chosen face amount/death benefit at a predetermined future date.

A systemic process of identifying, analyzing, assessing, and responding to all risks, regardless of the source, that affects the achievement of an organization’s strategic and

Buyer purchases all ownership interests of the entity.

A network of medical care providers structured in a similar manner to a PPO but have many of the requirements of an HMO.

After-tax net income divided by number of common shares of stock outstanding.

A form of whole life, universal, or variable life insurance with the cash value account tied to a stock index, most commonly the Standard &

1) the applied science of equipment and workplace design intended to maximize productivity by reducing operator fatigue and discomfort; 2) fitting the work environment to

A federal regulation enacted to protect participants and their beneficiaries. ERISA contains provisions that stand on their own and also added or amended provisions of

A systemic process of identifying, analyzing, assessing, and responding to all risks, regardless of the source, that affects the achievement of an organization’s strategic and

A tax payable to the federal government due to the death of an individual. It is a transfer tax based on the value of owned

Amount of premium charged at the time a policy is issued. The estimated premium based on estimated exposures times the negotiated premium rate. This amount

Legal concept that holds a party is barred or impeded by his/her own acts from claiming a right to the detriment of another party who

Pertaining to standards of right conduct or practice arising out of ethics. See Business ethics.

Moral principles of a group or individual as developed over time and with life experiences.

A statement of information and proof of health condition for underwriting of an insurance policy.

“From favor”, a payment to a claimant without regard to legal liability.

Insurance protection for limits above those contained in a primary policy or above a self-insured retention. Excess insurance usually does not include a duty to

An agreement to share specified losses. The reinsurer indemnifies the primary insurer for the amount of loss in excess of a specified retention. The retention

The reinsurer pays only when the aggregate loss from any one occurrence exceeds the predetermined retention of the ceding company. The primary use of excess

Premium that is not a part of a loss sensitive rating formula. In a retrospective rating plan, the excess premium usually purchases the excess insurance

A form of Treaty reinsurance, where no insurance is ceded, only the losses are ceded.

Exclusions vary from one policy to another and limit or eliminate the insurer’s exposure to certain types of losses that are catastrophic in nature, beyond

A system made up of agents who represent only one insurance company or a group of companies under common ownership or control.