CAS Online Course 2 Terms

Commercial property coverage part

Commercial package policy (CPP) coverage component that provides a broad range of coverages to "middle-market" or larger firms to insure buildings and business personal property

HO-2

Broad Form Meets most needs of owner-occupants for dwelling, other structures, and personal property coverage at a lower premium than the HO-3 or HO-5 coverages

Convertible

Characteristic of a term insurance policy that allows the policy to be exchanged for some type of permanent life insurance policy with no evidence of insurability

Pain and suffering

Compensable injuries that are difficult to measure, such as physical and mental distress and inconvenience associated with a physical injury

Scheduled coverage

Insurance for property specifically listed (scheduled) on a policy, with a limit of liability for each item

Suretyship

The obligation of one entity to answer for the debt, default, or miscarriage of performance of duties by another entity

Express license

The oral or written permission to enter onto another's land to do a certain act, but not the granting of any interest in the land itself

Bailor

The owner of the personal property in a bailment

Mass tort litigation

A class-action suit based on tort law rather than on contract law

Publication

In tort law, the communication of a defamatory statement to another person

Loss frequency

The number of losses that occur within a specified period

Coinsurance clause

A clause that requires the insured to carry insurance equal to at least a specified percentage of the insured property's value

Misrepresentation

A false statement of a material fact on which a party relies

Non-Owned trailer Limit

$1,500

Electronic Equipment Limit Auto

$1000, must be permanently installed

Current assumption whole life insurance (interest-sensitive life insurance)

- Includes features of a traditional whole life policy and a universal life policy - The premium and the cash value can be periodically recalculated by the insurer, based on new actuarial assumptions (drawn from the insurer's investment results and loss experience) - Insurer guarantees a minimum interest rate, and some insurers offer maximum mortality and expense charges

Second-to-Die (Survivorship) Life Insurance

- Insures two or more lives and pays the death proceeds only on the death of the second or last insured to die - Policy premiums are lower than separate policies on each insured with same combined face amount

First-to-Die (Joint) Life Insurance

- Pays the face amount on the first death of one of two (or more) insureds covered by the contract - Premiums higher than second-to-die, and higher than separate policies on each insured with same combined face amount

Exclusions to coverage C

-Articles separately described and specifically insured in this or other insurance. -Animals, birds, or fish. -Motor vehicles, parts, and electronic equipment that operates solely from the vehicle's electrical system. -Aircraft and hovercraft. -Property of roomers and boarders unrelated to the insured. -Property in an apartment rented to others. -Property rented or held for rental to others off the residence premises. -Business data, including drawings, stored either on paper or electronically. -Credit cards or electronic fund transfer cards. (Coverage for such property is provided as an Additional Coverage.) -Water or steam. (For example, there is no coverage for replacing water in a damaged swimming pool.)

Coverage B exclusions

-Other structure rented to someone (except if rented for private garage) -A structure from which any business is conducted. -A structure used to store business property. However, a structure containing business property is covered if the business property is solely owned by an insured or a tenant of the dwelling, provided that the business property does not include gaseous or liquid fuel, other than fuel in a permanently installed fuel tank of a vehicle or craft parked or stored in the structure.

Auto Part D exclusions

-public livery or conveyance -wear/tear/freezing/road damage to tires -radioactivity, war -electronic equipment transmits audio, visual, etc not permanently attached -tapes records discs, - loss due to government action - trailers not shown in declarations, unless within 14 days of acquiring -family member who doesnt have permission to use -police radar scanners - custom furnishings - auto used in business of selling, restoring etc vehicles - racing (facility or prearranged contest)

Coverage B limit (HO-3)

10% of coverage A

newly aquired physical damage cov

4 days with deductible of 500$ if dont have coll or comp, otherwise 14 days of most broad phys damage coverage.

Civil law system

A basic legal system that relies on scholarly interpretations of codes and constitutions rather than court interpretations of prior court decisions, as in common-law systems

Bad faith (outrage)

A breach of the duty of good faith and fair dealing

Joint venture

A business association formed by an express or implied agreement of two or more persons (including corporations) to accomplish a particular project, such as the construction of a building

Proximate cause

A cause that, in a natural and continuous sequence unbroken by any new and independent cause, produces an event and without which the event would not have happened

Loss assessment

A charge by the condominium association against the unit owners for the cost of uninsured losses

Toxic tort

A civil wrong arising from exposure to a toxic substance

Defamation

A false written or oral statement that harms another's reputation

Appraisal

A method of resolving disputes between insurers and insureds over the amount owed on a covered loss

Loss exposure

Any condition or situation that presents a possibility of loss, whether or not an actual loss occurs

Contract of adhesion

Any contract in which one party must either accept the agreement as written by the other party or reject it

Producer

Any of several kinds of insurance personnel who place insurance and surety business with insurers and who represent either insurers or insureds, or both

Policy condition

Any provision that qualifies an otherwise enforceable promise made in the policy

traditional foreseeability test

Anyone who could foreseeably have been injured by the product has standing to sue.

Nuisance

Anything interfering with another person's use or enjoyment of property

Unfair competition

Use of wrongful or fraudulent practices by a business to gain an unfair advantage over competitors

Court bonds

A classification of surety bonds guaranteeing that a person or an organization will faithfully perform certain duties prescribed by law or by a court or will demonstrate financial responsibility for the benefit of another until the final outcome of a court's decision

Incontestable clause

A clause that states that the insurer cannot contest the policy after it has been in force for a specified period, such as two years, during the insured's lifetime

Suicide clause

A clause that states the insurer will not pay the death benefit if the insured commits suicide within a certain period (usually two years) after policy inception

Commercial property coverage form

A commercial property coverage part component that can be any of several commercial property forms containing an insuring agreement and related provisions

Public official bond

A commercial surety bond guaranteeing that a public official will perform his or her duties faithfully and honestly

Generally accepted accounting principles (GAAP)

A common set of accounting standards and procedures used in the preparation of financial statements to ensure consistency of presentation and reported results

Contributory negligence

A common-law principle that prevents a person who has been harmed from recovering damages if that person's own negligence contributed in any way to the harm

Comparative negligence

A common-law principle that requires both parties to a loss to share the financial burden of the bodily injury or property damage according to their respective degrees of fault

49 percent comparative negligence rule

A comparative negligence rule that permits a plaintiff to recover reduced damages so long as the plaintiff's negligence is less than the other party's negligence

50 percent comparative negligence rule

A comparative negligence rule that permits a plaintiff to recover reduced damages so long as the plaintiff's negligence is not greater than 50 percent of the total negligence leading to harm

Pure comparative negligence rule

A comparative negligence rule that permits a plaintiff to recover damages discounted by his or her own percentage of negligence, as long as the plaintiff is not 100 percent at fault

Bid bond

A contract bond guaranteeing that a contractor bidding on a construction or supply contract will enter into the contract and will provide a performance bond if the bid is accepted

Performance bond

A contract bond guaranteeing that a contractor's work will be completed according to plans and specifications

Payment bond

A contract bond guaranteeing that the project will be free of liens

Maintenance bond

A contract bond guaranteeing that the work will be free from defects in materials and workmanship for a specified period after the project is completed

Contract of indemnity

A contract in which the insurer agrees, in the event of a covered loss, to pay an amount directly related to the amount of the loss

Conditional contract

A contract that one or more parties must perform only under certain conditions

Exculpatory clause (exculpatory agreement)

A contractual provision purporting to excuse a party from liability resulting from negligence or an otherwise wrongful act

Precedent

A court decision that serves as an example, or rule, for later, similar cases

Broad evidence rule

A court ruling explicitly requiring that all relevant factors be considered in determining actual cash value

Injunction

A court-ordered equitable remedy requiring a party to act or refrain from acting

Specific performance

A court-ordered equitable remedy requiring a party to perform a certain act, often—but not always—as a result of breach of a contract

Accounts receivable

A current asset representing monies owed to a business by customers for goods or services rendered

Underwriting cycle

A cyclical pattern of insurance pricing in which a soft market (low rates, relaxed underwriting, and underwriting losses) is eventually followed by a hard market (high rates, restrictive underwriting, and underwriting gains) before the pattern again repeats itself

Slander

A defamatory statement expressed by speech

Libel

A defamatory statement expressed in writing

Passing-off

A defendant knowingly makes a false representation that the defendant's goods or services are actually the plaintiff's in order to induce the public to buy the defendant's goods or services in the belief that they are the plaintiff's.

Immunity

A defense that, in certain instances, shields organizations or persons from liability

Assumption of risk

A defense to negligence that bars a plaintiff's recovery for harm caused by the defendant's negligence if the plaintiff voluntarily incurred the risk of harm

Interspousal immunity

A defense to negligence that grants immunity to one spouse from the other spouse's lawsuit for torts committed before, during, and after the marriage

Parent-child immunity

A defense to negligence that grants immunity to parents from their children's lawsuits for torts

Sovereign immunity (governmental immunity)

A defense to negligence that protects the government against lawsuits for tort without its consent

Attractive nuisance doctrine

A doctrine treating a child as a licensee, or guest, rather than a trespasser on land containing an artificial and harmful condition that is certain to attract children

Self-insured retention (SIR)

A dollar amount specified in an insurance policy that the insured must pay before the insurer will make any payment for a claim

Mitigation of damages

A duty owed by an injured party to a claim to take reasonable measures to minimize or avoid additional injury or loss

"Sandwiched" Families

A family in which a son or daughter with children provides financial support to one or both parents. The working spouse needs a substantial amount of life insurance.

Partnership

A for-profit business entity jointly owned by two or more persons who share ownership and profits (or losses), although not necessarily on an equal basis

Special damages

A form of compensatory damages that awards a sum of money for specific, identifiable expenses associated with the injured person's loss, such as medical expenses or lost wages

Variable life insurance

A form of life insurance providing a death benefit that may change with time due to its variable cash value

Cooperative corporation

A form of real property ownership in which the real property is owned by a corporation whose shareholders are the tenants of the property

Variable universal life insurance

A form of universal life insurance that allows the policyholder to make fund choices for the investment component but that has no guaranteed cash value and no guaranteed interest rate

Statistical plan

A formal set of directions for recording and reporting insurance premiums, exposures, losses, and sometimes loss expenses, to a statistical agent

Injurious falsehood

A group of torts involving disparagement that causes harm to any kind of legally protected intangible property right

Emotional distress

A highly unpleasant mental reaction resulting from another person's conduct, for which a court can award damages

appeal bond

A judicial bond guaranteeing that a plaintiff who appeals an adverse decision to a higher court will pay all court costs of the appeal

Uninsured motor vehicle

A land motor vehicle or trailer that is not insured for bodily injury liability, is insured for less than the financial responsibility limits, is a hit-and-run vehicle, or whose insurer denies coverage or becomes insolvent

Deemer provision

A law stating that if an insurance regulator does not approve of an insurer's filing within a specified time, the filing is deemed approved

Wrongful-pregnancy action (wrongful-conception action)

A lawsuit by a parent for damages resulting from a pregnancy following a failed sterilization

Wrongful-life action

A lawsuit by or on behalf of a child with birth defects, alleging that, but for the doctor-defendant's negligent advice, the parents would not have conceived the child or would have terminated the pregnancy so as to avoid the pain and suffering resulting from the child's defects

Class action (class action lawsuit)

A lawsuit in which one person or a small group of people represent the interests of an entire class of people in litigation

Wrongful death action

A legal cause of action that exists for the survivor of the deceased

dangerous instrumentality doctrine

A legal doctrine in which a parent is liable for negligently permitting a child to obtain or use a dangerous instrumentality that harms a third party.

Concurrent causation (concurrent causation doctrine)

A legal doctrine stating that if a loss can be attributed to two or more independent concurrent causes—one or more excluded by the policy and one covered—then the policy covers the loss

Reasonable expectations doctrine

A legal doctrine that provides for an ambiguous insurance policy clause to be interpreted in the way that an insured would reasonably expect

Collateral source rule

A legal doctrine that provides that the damages owed to a victim should not be reduced because the victim is entitled to recover money from other sources, such as an insurance policy

Res ipsa loquitur

A legal doctrine that provides that, in some circumstances, negligence is inferred simply by an accident occurring

Insurance agent

A legal representative of one or more insurers for which the representative has a contractual agreement to sell insurance

Vicarious liability

A legal responsibility that occurs when one party is held liable for the actions of a subordinate or an associate because of the relationship between the two parties

Common-law system

A legal system in which the body of law is derived more from court decisions as opposed to statutes or constitutions

Release

A legally binding contract between the parties to a dispute that embodies their agreement, obligates each to fulfill the agreement, and releases both parties from further obligation to one another that relates to the dispute

Family purpose doctrine

A liability concept that holds the owner of an automobile kept for the family's use vicariously liable for damages incurred by a family member while using the automobile

Umbrella liability policy

A liability policy that provides excess coverage above underlying policies and may also provide coverage not available in the underlying policies, subject to a self-insured retention

Proprietary function

A local government's act that is not considered part of the business of government and that could be performed by a private enterprise

Case reserve

A loss reserve assigned to an individual claim

Products liability

A manufacturer's or seller's liability for harm suffered by a buyer, user, or bystander as a result of a product that has a dangerous manufacturing defect or design defect or that is not accompanied by a warning of an inherent hidden danger

Inflation guard protection

A method of protecting against inflation by increasing the applicable limit for covered property by a specified percentage over the policy period

Agreed value method

A method of valuing property in which the insurer and the insured agree, at the time the policy is written, on the maximum amount that will be paid in the event of a total loss

Uniform Commercial Code (UCC)

A model code that has been adopted in whole or in part by each state and whose purpose is to provide a consistent legal basis for business transactions throughout the United States and its territories

General damages

A monetary award to compensate a victim for losses, such as pain and suffering, that does not involve specific, measurable expenses

Class code

A numeric code representing the description in the rating classification table that best fits a particular organization's operations

Relativity

A numerical estimate of losses in one classification relative to losses in a base classification

Negligent supervision

A parent's failure to exercise reasonable control and supervision over his or her child to prevent harm to others

Jurisdiction

A particular court's power or authority to decide a lawsuit of a certain type or within a certain territory

Standing to sue

A party's right to sue, as one who has suffered or will suffer a legal wrong or an adverse effect from an action

Consequential damages

A payment awarded by a court to indemnify an injured party for losses that result indirectly from a wrong such as a breach of contract or a tort

Punitive damages (exemplary damages)

A payment awarded by a court to punish a defendant for a reckless, malicious, or deceitful act to deter similar conduct; the award need not bear any relation to a party's actual damages

Compensatory damages

A payment awarded by a court to reimburse a victim for actual harm

Public invitee

A person invited to enter onto premises as a member of the general public for a purpose for which the land is open to the public

Tortfeasor

A person or an organization that has committed a tort

Third party

A person or business who is not a party to the insurance contract but who asserts a claim against the insured

Licensee

A person who has permission to enter onto another's property for his or her own purposes

Trespasser

A person who intentionally enters onto the property of another without permission or any legal right to do so

Named insured

A person, corporation, partnership, or other entity identified as an insured party in an insurance policy's declarations page

Passive negligence

A plaintiff's failure to discover a product defect or to guard against a possible defect

Active negligence

A plaintiff's voluntary use of a defective product with knowledge of the potential danger resulting from the defect

Liberalization Clause

A policy condition providing that if a policy form is broadened at no additional premium, the broadened coverage automatically applies to all existing policies of the same type

Exclusion

A policy provision that eliminates coverage for specified exposures

Excess liability policy

A policy that covers liability claims in excess of the limits of an underlying policy or a stated retention amount

Deductible

A portion of a covered loss that is not paid by the insurer

Reinstatement premium

A premium that applies to reinsurance contracts or primary policies to reinstate the original policy limit after it has been exhausted by the covered event in order to cover another possible event under the reinsurance or primary policy

Predictive modeling

A process in which historical data based on behaviors and events are blended with multiple variables and used to construct models of anticipated future outcomes

Return on equity (ROE)

A profitability ratio expressed as a percentage by dividing a company's net income by its net worth (book value)

External exposure

A property outside the area owned or controlled by the insured that increases the probability of loss to the insured's building and its contents

Insurance-to-value provision

A provision in property insurance policies that encourages insureds to purchase an amount of insurance that is equal to, or close to, the value of the covered property

Grace period

A provision that continues a life insurance policy in force for a certain number of days (usually thirty or thirty-one) after the premium due date, during which time the policyowner can pay the overdue premium without penalty

Retrospective rating

A ratemaking technique that adjusts the insured's premium for the current policy period based on the insured's loss experience during the current period; paid losses or incurred losses may be used to determine loss experience

Experience rating

A rating plan that adjusts the premium for the current policy period to recognize the loss experience of the insured organization during past policy periods

Individual risk premium modification plan (IRPM)

A rating plan that allows underwriters to modify property premiums based upon specific risk characteristics not reflected in the class rate

Condominium

A real estate development consisting of a group of units, in which the air space within the boundaries of each unit is owned by the unit owner, and all remaining real and personal property is owned jointly by all the unit owners

Liquidated damages

A reasonable estimation of actual damages, agreed to by contracting parties and included in the contract, to be paid in the event of a breach or for negligence

Retrocession

A reinsurance agreement whereby one reinsurer (the retrocedent) transfers all or part of the reinsurance risk it has assumed or will assume to another reinsurer (the retrocessionaire)

Commercial property declarations page

A required commercial property coverage part component that provides basic information about the policyholder and the insurance provided

Commercial Property Conditions

A required component of the commercial property coverage part that contains conditions applicable to all commercial property coverage forms

Causes of loss form

A required component of the commercial property coverage part that specifies perils covered

Slight versus gross rule

A rule of comparative negligence that permits the plaintiff to recover only when the plaintiff's negligence is slight in comparison with the gross negligence of the other party

Substantial factor rule

A rule used to determine proximate cause of a loss by determining which of the acts are significant factors in causing the harm

Foreseeability rule

A rule used to determine proximate cause when a plaintiff's harm is the natural and probable consequence of the defendant's wrongful act and when an ordinarily reasonable person would have foreseen the harm

"But for" rule

A rule used to determine whether a defendant's act was the proximate cause of a plaintiff's harm based on the determination that the plaintiff's harm could not have occurred but for the defendant's act

Self-contained policy

A single document that contains all the agreements between the insured and the insurer and that forms a complete insurance policy

Factual expectancy

A situation in which a party experiences an economic advantage if an insured event does not occur or, conversely, economic harm if the event does occur

Reasonable person test

A standard for the degree of care exercised in a situation that is measured by what a reasonably cautious person would or would not do under similar circumstances

Insuring agreement

A statement in an insurance policy that the insurer will, under described circumstances, make a loss payment or provide a service

Proof of loss

A statement of facts about a loss for which the insured is making a claim

Good Samaritan law

A statute providing that a person will not be liable for damages as a result of rendering aid to an injured person, without compensation, at the scene of an accident

Survival statute

A statute that preserves the right of a person's estate to recover damages that person sustained between the time of injury and death

Statute of repose

A statute that requires a plaintiff to file a lawsuit within a specific time period after a wrongful act by a defendant, such as improper construction of a building, regardless of when the injury occurred or was discovered

Statute of limitations

A statute that requires a plaintiff to file a lawsuit within a specific time period after the cause of action has accrued, which is often when the injury occurred or was discovered

Contract bond

A surety bond guaranteeing the fulfillment of obligations under construction contracts or other types of contracts

Classification system

A system developed for rating purposes to group similar loss exposures into homogeneous classes to avoid adverse selection

Apparent authority

A third party's reasonable belief that an agent has authority to act on the principal's behalf

Intentional tort

A tort committed by a person who foresees (or should be able to foresee) that his or her act will harm another person

Malicious interference with prospective economic advantage

A tort involving intentional interference with another's business, or with another's expected economic advantage

Indemnity plan

A type of healthcare plan that allows patients to choose their own healthcare provider and reimburses the patient or provider at a certain percentage (usually after a deductible is paid) for services provided

Managed care plan

A type of healthcare plan that provides members with comprehensive services and encourages them to use providers belonging to the plan

Prior approval

A type of insurance rate regulation in which rates and supporting rules must be filed with and approved by the insurance regulator before they can be used

File-and-use

A type of insurance rate regulation in which the insurer must file rates and supporting rules with the insurance regulator within a specific number of days prior to their use, and if not disapproved by the regulator during that review period, the rates can then be used immediately without specific approval

Use-and-file

A type of insurance rate regulation in which the rates and supporting rules must be filed with the insurance regulator within a specified period after they are put into use

Open competition (no-file law)

A type of insurance rate regulation that allows insurers to develop and use rates and supporting rules without having to file with or receive approval from the insurance regulator

Flex rating

A type of insurance rate regulation that requires insurers to obtain prior regulatory approval only if new rates exceed a certain percentage above or below previously filed rates

Annuity

A type of life insurance policy or contract that makes periodic payments to the recipient for a fixed period or for life in exchange for a specified premium

Loss portfolio transfer

A type of retroactive plan that applies to an entire portfolio of losses

Vehicle identification number (VIN)

A unique number that is assigned to each vehicle and that identifies certain vehicle characteristics

Functional valuation method

A valuation method in which the insurer is required to pay no more than the cost to repair or replace the damaged or destroyed property with property that is its functional equivalent

Tort

A wrongful act or an omission, other than a crime or a breach of contract, that invades a legally protected right

Cost of living adjustment (COLA) Rider

After a specified period, provides an increase in the monthly benefits to be paid during a disability. The amount of increase is usually specified in the rider, and the percentage may be applied before any disability occurs.

Common carriers

Airlines, railroads, or trucking companies that furnish transportation to any member of the public seeking their offered services

Personal property

All tangible or intangible property that is not real property

Residual (partial) disability Rider

Allows for partial payment of benefits, in proportion to the income lost, when the insured suffer a specified percentage of reduction in earned income. This benefit is typically paid after a period of disability.

Accounting Depreciation

Amount of acquisition cost of asset that is allocated to each accounting period over arbitrarily specified life of asset

Reinsurance recoverables

Amounts for losses and loss adjustment expenses owed to an insurer under reinsurance agreements covering paid losses

Single-Premium Annuity

An Annuity purchased with one lump-sum payment

Occurrence

An accident, including continuous or repeated exposure to substantially the same general harmful conditions

Deferral-matching

An accounting approach in which the focus is to coordinate the timing of income and expense recognition so that both occur when the triggering event that is the focus of the contract occurs

Asset-liability

An accounting approach that focuses on the value of assets or liabilities that exist as of the balance sheet date

Gross negligence

An act or omission that completely disregards the safety or rights of others and is exaggerated or aggravated in nature

Governmental function

An act that can be performed only by government

Negligence per se

An act that is considered inherently negligent because of a violation of a law or an ordinance

Ministerial act

An act that is directed by law or other authority and that requires no individual judgment or discretion about whether or how to perform it

Administrative act (discretionary act)

An act, a decision, a recommendation, or an omission made by a government official or agency within the authority of that office or agency

Intervening act

An act, independent of an original act and not readily foreseeable, that breaks the chain of causation and sets a new chain of events in motion that causes harm

Public nuisance

An act, occupation, or structure that affects the public at large or a substantial segment of the public, interfering with public enjoyment or rights regarding property

Ultrahazardous activity (abnormally dangerous activity)

An activity that is inherently dangerous; if harm results, the performer may be held strictly liable

Loss development factor

An actuarial means for adjusting losses to reflect future growth in claims due to both increases in the incurred amount for reported losses and incurred but not reported (IBNR) losses

Extended reporting period (ERP)

An additional period (also called a "tail") following the expiration of a claims-made policy, during which the expired policy will cover claims first made for injury or damage that occurred on or after the policy's retroactive date (if any) and before policy expiration

Preferred provider organization (PPO)

An administrative organization that meets the common needs of healthcare providers and clients and that identifies networks of providers and contracts for their medical services at discounted rates

Structured settlement

An agreement in settlement of a claim involving specific payments made over a period of time

Arbitration

An alternative dispute resolution (ADR) method by which disputing parties use a neutral outside party to examine the issues and develop a settlement, which can be final and binding

Trend analysis

An analysis that identifies patterns in past data and then projects these patterns into the future

Immediate annuity

An annuity contract bought with a single payment and with a specified payout plan that starts right away

Flexible-Premium Annuity

An annuity contract that permits the owner to vary the size and frequency of premium payments.

Deferred annuity

An annuity with an accumulation period that usually lasts a number of years

Denial-of-service attack

An attempt to overwhelm a computer system or network with excessive communications in order to deny users access

Invasion of privacy

An encroachment on another person's right to be left alone

Corporation

An entity organized under law and entitled to the same rights as a person, distinct from its owners

Enterprise liability (industry-wide liability)

An expanded liability concept requiring each member of an industry responsible for manufacturing a harmful or defective product to share liability, when a manufacturer at fault cannot be identified

Collateral Assignment

Assignment of part of the proceeds of an insurance policy to a bank as collateral to settle the loan balance that may exist at the insured's death.

Market share liability

An expanded liability concept that applies when a product that has harmed a consumer cannot be traced to a single manufacturer; all manufacturers responsible for a substantial share of the market are named in the lawsuit and are liable for their proportional share of the judgment

Concert of action

An expanded liability concept that applies when all defendants acted together or cooperatively

Conspiracy

An expanded liability concept that applies when two or more parties worked together to commit an unlawful act

Alternative liability

An expanded liability concept that shifts the burden of proof to each of several defendants in a tort case when there is uncertainty regarding which defendant's action was the proximate cause of the harm

Express warranty

An explicit statement about a product by the seller that the buyer or other user may rely on and that provides a remedy in the event the product does not perform as claimed

Twisting

An illegal misrepresentation that convinces a customer to cancel one policy and purchase another policy that is detrimental to the customer

Implied warranty of merchantability

An implied warranty that a product is fit for the ordinary purpose for which it is used

Broker

An independent producer who represents insurance customers

Business invitee

An individual who has express or implied permission to be on the premises of another for the purpose of doing business

Binding authority

An insurance agent's authority to effect coverage on behalf of the insurer

Manuscript form

An insurance form that is drafted according to terms negotiated between a specific insured (or group of insureds) and an insurer

Named perils coverage

An insurance policy in which the covered causes of loss are listed or "named" in the policy

Declarations page (declarations, or dec)

An insurance policy information page or pages providing specific details about the insured and the subject of the insurance

Consent-to-settle clause

An insurance policy provision, usually found only in professional liability policies, that requires the insurer to obtain consent from the insured before settling a claim

Remediation stop-loss policy (cost cap policy)

An insurance policy purchased to insure remediation costs that exceed the projected or anticipated costs of performing an environmental cleanup of a specific location that is being sold

Modular policy

An insurance policy that consists of several different documents, none of which by itself forms a complete policy

Contractors pollution liability (CPL) policy

An insurance policy that covers the pollution-related loss exposures of a contractor

Site-specific environmental impairment liability (EIL) policy

An insurance policy that covers third-party claims arising from either sudden or gradual releases of pollutants from specified locations

Underground storage tank (UST) compliance policy

An insurance policy that provides proof of financial responsibility under governmental regulations that apply to the owners and operators of underground storage tanks containing fuels or other hazardous materials

Dollar trading

An insurance premium and loss exchange in which the insured pays the insurer premiums for low value losses, and the insurer pays the same dollars back to the insured, after subtracting expenses

Domestic insurer

An insurer doing business in the jurisdiction in which it is incorporated

Alien insurer

An insurer domiciled in a country other than the one in which it seeks to conduct, or is conducting, business

Foreign insurer

An insurer licensed to operate in a jurisdiction but incorporated in another jurisdiction

Intentional infliction of emotional distress

An intentional act causing mental anguish that results in physical injury

Product disparagement, or trade libel

An intentional false and misleading statement about a characteristic of a plaintiff's product, resulting in financial damage to the plaintiff

Fraud

An intentional misrepresentation resulting in harm to a person or an organization

Insurable interest

An interest in the subject of an insurance policy that is not unduly remote and that would cause the interested party to suffer financial loss if an insured event occurred

Legal duty

An obligation imposed by law for the preservation of the legally protected rights of others

Implied warranty

An obligation that the courts impose on a seller to warrant certain facts about a product even though not expressly stated by the seller

Administrative agency

An official governmental body that is empowered with the authority to implement and administer particular legislative acts

Health maintenance organization (HMO)

An organization that provides all the care needed by its members in exchange for a fixed fee

Negligent infliction of emotional distress

An unintentional act causing mental anguish that results in physical injury

Interference with employment

An unjustified intentional act that interferes with another's valid or expected business relationship

Private nuisance

An unreasonable and unlawful interference with another's use or enjoyment of his or her real property

Variable Annuity

Annuity that has a varying rate of return based on the mutual funds in which one has invested, investor bears risk

HO-5

Comprehensive Form Meets the needs of owner-occupants of dwellings who want the broadest coverage available among ISO's forms for their dwellings, other structures, and personal property

Environmental professional E&O liability policy

Contains insuring agreements that resemble the coverage grants of traditional engineers professional liability policies but does not contain pollution exclusions. Designed for environmental engineers, testing labs, tank testers, and environmental consultants.

HO-4

Contents Broad Form Meets the needs of tenants and other apartment or dwelling occupants who do not require coverage on the dwelling

Actual cash value (ACV)

Cost to replace property with new property of like kind and quality less depreciation

Last Clear Chance

Courts place responsibility for harm on the party who had the "last clear chance" to avoid harm but failed to do so

Transportation expenses

Coverage extension for substitute transportation costs incurred when a private passenger type auto has been stolen

Entity coverage

Coverage extension of D&O liability policies for claims made directly against a corporation (the "entity") for wrongful acts covered by the policy

Collision coverage

Coverage for direct and accidental loss or damage to a covered auto caused by collision with another object or by overturn

Replacement Cost optional coverage

Coverage for losses to most types of property on a replacement cost basis (with no deduction for depreciation or obsolescence) instead of on an actual cash value basis

Basic medical expense coverage

Coverage for medical expenses, such as hospital and surgical expenses, physicians' visits, and miscellaneous medical services

Other than collision (OTC) coverage

Coverage for physical damage to a covered auto resulting from any cause of loss except collision or a cause of loss specifically excluded

Inflation Guard optional coverage

Coverage for the effects of inflation that automatically increases the limit of insurance by the percentage of annual increase shown in the declarations

Underinsured motorists (UIM) coverage

Coverage that applies when a negligent driver has liability insurance at the time of the accident but has limits lower than those of the injured person's coverage

Fixed Period Settlement Option

Death benefits are paid over a specified period of time. The amount of the period payment is a function of the amount of the death benefit, the rate of interest paid on the balance of the death benefits held by the insurer, the frequency of benefit payments, and the period selected by the beneficiary

difference between SIR and Deductible

Deductible, insurer pays in full then bills the insured, SIR insurer only pays over the SIR. SIR is payable up to full limit

coinsurance formula

Did/should * loss... or (limit/(RC value * Coinsur))*loss USUALLY 80% coinsurance factor

Premium Reduction Option

Dividend amounts can be applied to pay for future premium payments due.

Accumulated Dividend Option

Dividend amounts remain with the insurer and accumulate interest. Dividends and accumulated interest can subsequently be withdrawn at any time or can be paid in additional to death benefit amounts.

Cash Dividend Option

Dividends are paid in cash, usually at the policy anniversary date.

paid-up additions option

Dividends may be used to buy increments of paid whole life insurance, which would increase the amount of the death benefit paid under the policy

Coverage A

Dwelling applies to the dwelling on the "residence premises" listed on the Declarations page

Guaranteed Insurability Rider

Enables an insured to purchase specified additional amounts of insurance on stated policy anniversary dates, without providing proof of insurability.

Peak season endorsement

Endorsement that covers the fluctuating values of business personal property by providing differing amounts of insurance for certain time periods during the policy period

Package modification factors

Factors that are applied to the regular policy premiums for certain coverage parts of a CPP that includes both property and liability coverages, resulting in premium discounts for those coverage parts

Universal life insurance

Flexible premium permanent life insurance that separates the protection, savings, and expense components

Modified "Own Occupation" Disability

Full benefits are paid if the insured is unable to perform the duties of his or her specific occupation or any other occupation. But if the insured is able to earn income from another occupation, the benefit payments are reduced in proportion to the income earnings from the other occupation.

Future increase option (FIO) Rider

Guarantees the insured's insurability for a specific period, allowing the option to increase the monthly benefit as the insured's income increases, based on documented income increases.

Public or livery conveyance

In case law, a method of transportation that is indiscriminately offered to the general public, such as a taxi or public bus

Adverse selection

In general, the tendency for people with the greatest probability of loss to be the ones most likely to purchase insurance

Agent

In the agency relationship, the party that is authorized by the principal to act on the principal's behalf

Directors and officers (D&O) liability insurance

Insurance that covers a corporation's directors and officers against liability for their wrongful acts covered by the policy and also covers the sums that the insured corporation is required or permitted by law to pay to the directors and officers as indemnification

Employee benefits liability insurance

Insurance that covers an employer against liability claims alleging improper advice or other errors or omissions committed while administering the employer's employee benefit plans

Employment practices liability (EPL) insurance

Insurance that covers an organization, its directors and officers, and its employees against claims alleging damages because of wrongful employment practices such as sexual harassment, wrongful termination, and unlawful discrimination

Aircraft insurance

Insurance that covers liability due to the insured's ownership, maintenance, or use of aircraft; physical damage to aircraft owned or used by the insured; and other aircraft loss exposures

Major medical insurance

Insurance that covers medical expenses resulting from illness or injury that are not covered by a basic medical expense plan

Management liability insurance

Insurance that covers organizations and in some cases their directors, officers, and other employees against liability claims for damages resulting from various wrongful acts that are not covered under other commercial liability policies; common examples are directors and officers liability insurance, employment practices liability insurance, employee benefits liability insurance, and fiduciary liability insurance

Professional liability insurance

Insurance that covers persons engaged in various occupations against liability resulting from their rendering or failing to render professional services

Fiduciary liability insurance

Insurance that covers the fiduciaries of an employee benefit plan against liability claims alleging breach of their fiduciary duties involving discretionary judgment

Insurance to value

Insurance written for an amount approximating the full value of the asset(s) insured

"Own Occupation" Disability

Insured's inability to perform duties of his or her current job or an occupation for which the insured is educated and trained

Battery

Intentional harmful or offensive physical contact with another person without legal justification

Postjudgment interest

Interest that may accrue on damages after a judgment has been entered in a court and before the money is paid

Prejudgment interest

Interest that may accrue on damages before a judgment has been rendered

Legislation

Law enacted by a legislative body

Common law (case law)

Laws that develop out of court decisions in particular cases and establish precedents for future cases

Strict liability (absolute liability)

Liability imposed by a court or by a statute in the absence of fault when harm results from activities or conditions that are extremely dangerous, unnatural, ultrahazardous, extraordinary, abnormal, or inappropriate

Term life insurance

Life insurance that provides coverage for a specified period, such as ten or twenty years, with no cash value

term life insurance

Life insurance that provides coverage for a specified period, such as ten or twenty years, with no cash value. If the insured dies during the policy term, the policy value is paid to the beneficiary.

Whole life insurance

Life insurance that provides lifetime protection, accrues cash value, and has premiums that remain unchanged during the insured's lifetime

Coverage D

Loss of Use applies to the insured's exposure to financial loss, apart from the property damage itself, if the premises where the insured resides are damaged so badly they are unfit for use

Malware

Malicious software, such as a virus, that is transmitted from one computer to another to exploit system vulnerabilities in the targeted computer

Point-of-service (POS) plan

Managed-care plan that combines the characteristics of an HMO and a PPO; has a network of preferred providers who, if used by the member, charge little or nothing for services; heathcare received out of the network is covered, but members must pay substantially higher coinsurance charges and a deductible

Hard market

Market conditions in which insurer competition diminishes, buyers have difficulty finding coverage, premiums increase, and insurer profitability rises

Soft market

Market conditions in which insurer competition is intense and is indicated by widely available coverage, lower premiums, and decreased insurer profitability

Coverage F

Medical Payments to Others covers the necessary medical expenses incurred by others (not an insured) within three years of an injury

Stock

Merchandise held in storage or for sale, raw materials and in-process or finished goods, including supplies used in their packing or shipping

HO-8

Modified Coverage Form Meets the needs of owner-occupants of dwellings who may not meet insurer standards required for other policy forms -Homes repaired on functional replacement cost basis

Damages

Money claimed by, or a monetary award to, a party who has suffered bodily injury or property damage for which another party is legally responsible

Coverage C, named or open? (HO-3)

Named

Extended term insurance

Nonforfeiture option where the policyowner may choose to continue the full death benefit of the original policy, but for a shorter period, under a term policy.

Incurred losses

The losses that have occurred during a specific period, no matter when claims resulting from the losses are paid

Reduced paid-up insurance

Nonforfeiture option where the policyowner may elect to use the accumulated cash value in the policy to purchase paid-up insurance at a reduced face amount. The type of coverage provided is the same as that provided under the original contract that was surrendered.

Cash surrender value

Nonforfeiture option where the policyowner would surrender the policy for cash, and all of the insurer's future obligations under the policy would cease. Any outstanding loan amounts would be deducted from the cash surrender amount.

Single-limits basis

One coverage limit that applies to all damages arising from bodily injury or property damage or both, resulting from a single accident

Agreed Value optional coverage

Optional coverage that suspends the Coinsurance condition if the insured carries the amount of insurance agreed to by the insurer and insured

Coverage B

Other Structures applies to structures on the residence premises, other than the dwelling building, that are not attached to the dwelling, such as storage sheds, detached garages, and swimming pools

Noneconomic damages

Pain and suffering or mental anguish

Invitee

Person who enters a premises for the financial benefit of the owner or occupant

Beneficiary

Person(s) designated in a life insurance policy to receive the death benefit

Coverage E

Personal Liability applies to third-party coverage for those who are injured or whose property is damaged by an insured, generally for a basic limit of $100,000

Coverage C

Personal Property applies to the contents of the insured premises and to personal property owned or used by an insured anywhere in the world, such as personal luggage or borrowed skis that are stolen

Bodily injury

Physical injury to a person, including sickness, disease, and death

Property damage

Physical injury to, destruction of, or loss of use of tangible property

Indemnity (principle)

Policies should provide a benefit no greater than the loss suffered by an insured.

Severability of Insurance condition

Policy condition that applies insurance separately to each insured; does not increase the insurer's limit of liability for any one occurrence

Monoline policy

Policy that covers only one line of business

Package policy

Policy that covers two or more lines of business

Commercial package policy (CPP)

Policy that covers two or more lines of business by combining ISO's commercial lines coverage parts

Special form coverage

Property insurance coverage covering all causes of loss not specifically excluded

Intangible property

Property that has no physical form

Social Security Supplement Coverage Rider

Provides additional benefits to an insured when Social Security disability benefits do not apply.

Uniform Contribution Among Joint Tortfeasors Act (UCAJTFA)

Provides that, when two or more persons become jointly or severally liable in tort for the same injury or damage, or for the same wrongful death, they have a right of contribution among them even though the plaintiff has not recovered judgment against all or any of them. Contribution means that tortfeasors who have paid more than their pro rata share of their joint liability are entitled to reimbursement from the other tortfeasors of up to the amount of the excess over their pro rata share. It provides that, in assessing pro rata liability, the relative degree of fault is not a consideration. Also, the plaintiff can release one or more defendants without releasing the others if it is a good-faith release that indicates intent only to release part, not all, of the liability and if the payment is full compensation.

Accidental death benefit

Provision in a life insurance policy that doubles (or triples) the face amount of insurance payable if the insured dies as a result of an accident

Nonforfeiture options

Provisions in a life insurance policy that give the policyowner a choice of ways to use the cash value if the policy is terminated and that protect the policyowner from forfeiting the cash value

Intentional nuisance

Purposeful interference with another party's enjoyment of his or her property

ACV Calculation

RC- Depreciation, use economic depreciation, which is RC-current market value

Prospective reinsurance

Reinsurance purchased to cede future losses

retrospective reinsurance

Reinsurance purchased to cede past losses.

Guaranteed insurability rider (guaranteed purchase option)

Rider that permits the policyowner to buy additional amounts of life insurance at standard rates without evidence of insurability

Interpretative rules

Rules that are interpretations of statutes that provide guidance for agency staff or regulated parties. These rules lack the force and effect of law and, therefore, are not binding on individuals or organizations.

Procedural rules

Rules that are primarily internal and prescribe procedures for agency operations, legislative rulemaking, and adjudication proceedings.

Aggregate limit

The maximum amount an insurer will pay for all covered losses during the covered policy period

Legislative rules (substantive rules)

Rules that arise from a statutory delegation of authority and have the same force as a law enacted by a legislative body. The development and passage of these rules require adherence to rulemaking procedures.

Split-limits basis

Separate coverage limits that allow one limit for bodily injury to each person; a second, usually higher, limit for bodily injury to all persons in each accident; and a third limit for all property damage in each accident

Rider

Similar to an endorsement; modifies a life insurance policy

Trustee

Someone who has the legal title to a property but is responsible that it be used, handled, and transferred solely for the benefit of the beneficiary

Consideration

Something of value or bargained for and exchanged by the parties to a contract

HO-3

Special Form Meets the needs of owner-occupants of dwellings who want coverage on their dwellings and other structures that is broader than the HO-2 offers

Significant contacts rule

Specifies that the substantive law of a state having more significant contacts to the parties could apply, even when the tort occurred elsewhere

Real property (realty)

Tangible property consisting of land, all structures permanently attached to the land, and whatever is growing on the land

Chattel

Tangible, movable personal property

Cancellation

Termination of a policy, by either the insurer or the insured, during the policy term

Statutory accounting principles (SAP)

The accounting principles and practices that are prescribed or permitted by an insurer's domiciliary state and that insurers must follow

Negligent entrustment

The act of leaving a dangerous article with a person who the lender knows, or should know, is likely to use it in an unreasonably risky manner

Attachment

The act of seizing property to secure a judgment

Deposit premium

The amount a policyholder pays at the beginning of a policy period, pending the determination of the actual premium owed

Loss severity

The amount of loss, typically measured in dollars, for a loss that has occurred

Reserve

The amount the insurer estimates and sets aside to pay on an existing claim that has not been settled

Equity Indexed Annuity

The annuity that has a guaranteed minimum interest rate and allows the annuitant to invest money in an index (i.e.: S&P 500). The investments grow as the index grows. Insurer bears risk.

Life Income Settlement Option

The beneficiary receives the death benefit over his/her life. May include a no-refund option, which will pay benefits only until he death of the beneficiary.

Environmental law

The body of law that deals with the environment's maintenance and protection

Loss of wages and earnings

The compensatory damages to compensate a plaintiff for any loss of income directly related to a tort

Exclusive control

The control of only one person or entity; in tort law the control by the defendant alone of an instrument that caused harm

Functional replacement cost

The cost of replacing damaged property with similar property that performs the same function but might not be identical to the damaged property

Replacement cost

The cost to repair or replace property using new materials of like kind and quality with no deduction for depreciation

Retroactive date

The date on or after which the injury, damage, or other insured event must occur in order to be covered in a claims-made liability policy

Fixed Amount Settlement Option

The death benefit is paid to the beneficiary in a series of fixed amounts at predetermined intervals, usually monthly, until the proceeds plus interest are exhausted

Policy termination

The ending of the contractual relationship between the insured and insurer by cancellation, expiration, or nonrenewal

Negligence

The failure to exercise the degree of care that a reasonable person in a similar situation would exercise to avoid harming others

Probable cause

The grounds that would lead a reasonable person to believe that the plaintiff committed the act for which the defendant is suing

Malicious prosecution

The improper institution of legal proceedings against another

Malice

The intent to do a wrongful act without justification or excuse

Waiver

The intentional relinquishment of a known right

Tenancy by the Entirety

The joint ownership of property acquired by husband and wife during marriage. Upon the death of one spouse, the survivor becomes the owner of the property.

Respondeat superior

The legal principle under which an employer is vicariously liable for the torts of an employee acting within the course and scope of employment

Joint and several liability

The liability of multiple defendants either collectively or individually for the entire amount of damages sought by the plaintiff regardless of their relative degree of responsibility

Surety

The party (usually an insurer) to a surety bond that guarantees to the obligee that the principal will fulfill an obligation or perform as required by the underlying contract, permit, or law

Defendant

The party in a lawsuit against whom a complaint is filed

Bailee

The party temporarily possessing the personal property in a bailment

Obligee

The party to a surety bond that receives the surety's guarantee that the principal will fulfill an obligation or perform as promised

Principal

The party to a surety bond whose obligation or performance the surety guarantees

Implied license

The permission to enter onto another's land arising out of a relationship between the party who enters the land and the owner

Plaintiff

The person or entity who files a lawsuit and is named as a party

Annuitant

The person that buys an annuity; may or may not be an annuity's policyowner.

Unearned premium

The portion of policy premium for the unexpired portion of the policy

Loss costs

The portion of the rate that covers projected claim payments and loss adjusting expenses

Earned premiums

The portion of written premiums that corresponds to coverage that has already been provided

Rebating

The practice of giving a portion of the producer's commission or some other financial advantage to an individual as an inducement to purchase the policy

Market value

The price at which a particular piece of property could be sold on the open market by an unrelated buyer and seller

Rate

The price per exposure unit for insurance coverage

Principle of indemnity

The principle that insurance policies should provide a benefit no greater than the loss suffered by an insured

Stare decisis

The principle that lower courts must follow precedents set by higher courts

Subrogation

The process by which an insurer can, after it has paid a loss under the policy, recover the amount paid from any party (other than the insured) who caused the loss or is otherwise legally liable for the loss

Actuarial rate indication

The proposed rate change derived by actuarial analysis prior to company strategic influences

Deferred acquisition costs

The recognition of the cost of acquiring a new customer over the duration of an insurance contract

Retrocessionaire

The reinsurer that assumes all or part of the reinsurance risk accepted by another reinsurer

False imprisonment

The restraint or confinement of a person without consent or legal authority

Contribution

The right of a tortfeasor who has paid more than his or her proportionate share of the damages to collect from other tortfeasors responsible for the same tort

False arrest

The seizure or forcible restraint of a person without legal authority

Administrative law

The statutory laws that grant power to administrative agencies to act and the body of law that is created by administrative agencies themselves

Regulation

The supervision and control of an activity for a specific purpose by an entity that is not directly involved in, or party to, the activity

Assault

The threat of force against another person that creates a well-founded fear of imminent harmful or offensive contact

Policy period

The time frame, beginning with the inception date, during which insurance coverage applies

Written premiums

The total premium on all policies written (put into effect) during a particular period

Infringement

The unauthorized use of an individual's intellectual property

Premium base

The unit in which the exposure is measured, such as gross sales or payroll

Conversion

The unlawful exercise of control over another person's personal property to the detriment of the owner

Malicious abuse of process

The use of civil or criminal procedures for a purpose for which they were not designed

Mark-to-model

The valuation of an asset based on financial models instead of market price

Mark-to-market

The value of an asset or liability based on its current market price

Physical damage coverages

There are four kinds: comprehensive, specified causes of loss, collision, and towing

Coverage C- When it applies

To insured's personal property anywhere in world, or to anyone elses property while on insured's premises

Joint tortfeasors

Two or more parties who act together to commit a tort or who commit separate torts that combine to cause an injury or loss

Trespass

Unauthorized entry to another person's real property or forcible interference with another person's personal property

HO-6

Unit-Owners Form Meets the needs of owners of condominium units and cooperative apartment shares

Supplementary payments

Various expenses the insurer agrees to pay under a liability insurance policy (in addition to the liability limits) for items such as premiums on bail bonds and appeal bonds, loss of the insured's earnings because of attendance at trials, and other reasonable expenses incurred by the insured at the insurer's request

Settlement options

Various ways of paying life insurance policy proceeds to the beneficiary

Tenancy in Partnership

a concurrent ownership by a partnership and its individual partners of personal property used by the partnership; the partnership and all partners have rights of survivorship

Tenancy in Common

a concurrent ownership of property, in equal or unequal shares, by two or more owners; owners do not have survivorship rights

Policy Provision

a contractual term included in an insurance policy that specifies requirements or clarifies intended meaning

blended family

a family unit in which one or both partners bring with them dependent children from a prior relationship. One or both partners may be employed.

Reckless disregard

a high degree of certainty of a statement's probable falsity, approaching the level of a knowing, calculated falsehood

snowmobile

a land motor vehicle propelled solely by wheels, crawler-type treads, belts, or similar mechanical devices and designed for use mainly off public roads on snow or ice

"Traditional" families

a mother, a father, and their children. only one parent is employed, while the other partner manages the household and takes care of the dependent children.

Combination Plan

a pay plan that provides each employee a small wage or salary and adds incentive pay based on the person's performance, investor bears risk

Restitutio in integrum

a principle used to determine which expenses incurred by a plaintiff should be paid as compensation for the loss

Synthesis

a process that analyzes the rulings from several legal authorities to create a new case law that is applied to a new legal situation.

Specific rating

a rating approach that bases a building's property insurance rate on inspecting and evaluating that particular building

limit of insurance (LOI) rating

a rating approach that is based on the observation that most commercial property losses are partial, as opposed to total, and property losses do not increase proportionately with the value of the insured property

Class rating

a rating approach that uses rates reflecting the average probability of loss for businesses within large groups of similar risks

occurence

a sudden event, a gradual series of incidents, or a continuous condition, as long as it is fortuitous

Risk-based capital

a technique to determine the minimum amount of capital an insurer needs to support its overall business operations, based on its size and risk profile

Assault (civil tort law)

a threat of physical harm to a person; considered a physical tort even though it does not involve touching, because the threat of touching is implicit

absolute privilege

applies to statements made in judicial and legislative proceedings, executive officers' communications, and spousal communications, and when consent was given by the injured party.

Absolute assignment

all ownership rights in the policy are transferred to a new owner

reinstatement clause

allows a policyowner to reinstate a life insurance policy that has lapsed for nonpayment of premium

Accelerated Death Benefits

allows insureds who are terminally ill to collect part or all of their life insurance benefits before they die

Payment of Loss provision

allows insurer option of paying for loss in money or repairing the damaged property

misrepresentation

an active, deliberate misstatement of fact

Right of Survivorship

an automatic right of one tenant to the share of the other tenant when that other tenant dies

Concealment

an intentional failure to disclose a material fact

Utmost good faith

an obligation to act with complete honesty and to disclose all relevant facts

Exclusive provider organization (EPO)

an organization that contracts with insurers to provide healthcare to plan members at a much lower premium than healthcare provided by other plans (charges insurers an access fee for use of the network, negotiates with healthcare providers to set fee schedules for guaranteed service levels, and helps resolve issues between insurers and healthcare providers. Except for emergencies, plan members must exclusively use network healthcare providers)

Deferred Annuity

annuity where benefits are paid at specified future point

Immediate Annuity

annuity where benefits are typically paid within 30 days of premium payment

Salvage

any amount that the insurer is able to collect from the sale of assets the insurer takes over ownership of as a result of the claim payment

premature death

any death that occurs before age 65

motor vehicle

any self-propelled vehicle, including an attached trailer

fiduciary

anyone whose role in employee benefits involves discretionary control or judgment in the design, administration, funding, or management of a benefit plan

conditional (qualified) privilege

applies to statements made without malice as a matter of public interest, in petitions concerning appointments, in common interest communications, as fair comment on matters of public concern, and by credit reporting agencies.

transitory cause of action

arises from an offense that could happen anywhere

transportation expense reimbursement

auto rental or taxi fares - up to $20 a day to max of $600 for each covered loss Waiting period - 48 hours for theft 24 hours other perils under coll and OTC

additional auto coverage

automatic for 14 days

replacement auto coverage

automatic for period except for physical damages coverage

irrevocable beneficiary designation

beneficiary changes must have the beneficiary's consent

tenancy by entirety

between husband and wife. one dies, other becomes sole owner.

local cause of action

can be brought only where the subject matter of the controversy is located

Final base premium adjustments

claim history, insurance score, package policy credits

Medical savings accounts (MSAs)

combine the use of a health savings account (HSA) with a high-deductible catastrophic health plan

tenancy in common

concurrent ownership in shares. no survivorship rights. interest limited to each owner's share

Loss of use due to civil authority

coverage for up to 2 weeks

Passenger voluntary settlement coverage (admitted liability coverage)

coverage that is unique to aircraft insurance and is normally available for industrial aid aircraft, provides scheduled benefits if a passenger suffers death, dismemberment, or loss of sight. Two conditions: insured must ask the insurer to pay, and claimant must release the insured from liability for all bodily injury caused by the accident

Collision Coverage

covers loss to a covered auto or its equipment by collision with another object or by overturn

cyber crime insuring agreement

covers theft of money and securities and, depending on the insurer's form, intangible property, resulting from computer attacks or computer fraud

Aggravated damages

damages intended to compensate the plaintiff for certain types of injuries caused by the egregious conduct of the defendant

"Any Occupation" Disability

disability exists when you are incapable of performing any job for which you are reasonably qualified based on education, training, or experience

One Year Term Insurance Option

dividend may be used to buy one-year term insurance equal to the policy's cash value

Base Premium Factors

dwelling location, public protection class, construction factors, coverage amount, policy form

joint tenancy

each owner owns entire property. Right of survivorship. insurable interest in full value

Joint Tenancy

each owner, referred to as a "tenant," owns the entire property and has a right of survivorship

excess electronic equipment limit

endorsement will pay max $200 for cds and stuff in car

base premium adjustments

endorsements, deductible changes, etc

Special needs plans (SNPs)

enroll one or more types of individuals with special needs as defined by law, including those who have been institutionalized, who are eligible for both Medicare and Medicaid, and who have severe or disabling chronic conditions

Contingent Beneficiary

entitled to the death benefits if the primary beneficiary is not alive at the time of the insured's death

Loss Settlement

establishes the process for determining the amount to be paid for a property loss. -Coverage C - Lesser of 2 amounts, RC or ACV -for buildings - if insurance limit is 80% or more of the RC, than insurer will pay up to limit. If not, the insurer will pay greater of 2 amounts: ACV or proportion of cost to repair to 80% of RC

passenger hazard exclusion

excludes liability coverage for bodily injury to any person occupying the covered vehicle

information asymmetry

exists when one party to a contract has information important to the contract that the other party does not

Functional depreciation

factors include obsolescence and changes in customer needs that cause the asset to no longer provide services for which it was intended

Commutation

finalizes the remaining obligations under the reinsurance agreement of either party to the other, generally through a fixed payment or series of fixed payments from the reinsurer to the reinsured

Coverage for damage to your auto endorsement

for antique cars or restored show cars, limit is stated amount, ACV, or amount necessary to repair or replace

Agreement and definitions

gerneral agreement about insurer providing coverage subject to terms and premium payment

Private fee-for-service (PFFS) plans

give beneficiaries more choices through the ability to obtain services from any Medicare-approved provider accepting the plan's payment

License and permit bonds

guarantee compliance with laws that apply to the licensed activity; some may additionally guarantee the payment of damages to anyone who suffers a loss resulting from noncompliance with those laws

Hazardous waste removal bonds

guarantee federal or state governments that owners or operators of hazardous waste facilities will comply with laws for closure and post-closure care of the facilities.

Credit enhancement financial guaranty bonds

guarantee governmental entities that investors will be paid promised interest and that principal will be returned at maturity of debt instruments.

Lost securities bonds

guarantee that an entity that issues replacements for lost securities will be indemnified for any financial loss that results from the duplication of the securities.

Fixed-Dollar Annuity

guarantees a fixed, minimum dollar payout, during each paying period, insurer bears risk

Appraisal Provision

if insured and insurer disagree on the amount of loss. Each selects appraiser, then umpire officiates. Insurer does not waive any rights

residence employee

includes domestic workers whose duties are related to the maintenance or use of the household premises, or performing domestic or household services

Endorsements (role)

increase or decrease limits, add or remove coverages, change definitions, clarify policy intent, or recognize specific characteristics that require a premium increase or decrease

Automatic Increase Rider (AIR)

increases the insured's monthly benefit amount each year for a specified number of years to keep up with inflation

Loss payable clause

insurer agrees to include the named loss payee when a claim is paid involving that personal property

Indemnity (Contract)

insurer agrees to pay an amount directly related to the amount of a covered loss

Waiver of premium rider

insurer agrees to waive the payment of any premium falling due while the policyowner or insured is disabled, as defined in the waiver of premium provision

Loss payment condition

insurer will adjust all losses with insured or insured's spouse. loss is payable 60 days after proof of loss is submitted and judgement has been passed.

Malpractice liability

liability associated with occupations that involve contact with the human body, ranging from beauticians to physicians.

participating policies

life insurance policies that pay dividends

Physical depreciation

loss in value resulting from wear and tear

Disability income rider

may be added to a life insurance policy to provide a regular monthly income if the insured becomes permanently disabled

Declarations Page (whats on there)

name/mailing address, insurer, pol period, description of autos, rating info and premium, ENDORSEMENTS**, leinholder, garage location

Factual Expectancy

only need to show potential financial harm from loss to prove insurable interest

Comprehensive Coverage

pays for loss to covered auto or its equipment from any cause not excluded, except collision or overturn

self-contained policy

policy subject to its own terms only

following form

policy subject to the same terms as the underlying policy

guaranteed renewable policy

policy will continue as long as the premiums continue to be paid, up to a specified age, such as sixty-five or seventy, as long as the insured is gainfully employed

Errors and omissions liability

professional liability for occupations such as accounting, insurance, law, and engineering

Consumer-directed health plans (CDHPs)

provide consumers with access to high-quality care without requiring deductibles for preventive care 3 components: 1. An HSA or a health reimbursement arrangement (HRA) 2. High-deductible medical coverage, with preventive care not charged against the deductible 3. Access to informational tools for making informed healthcare decisions

Drop-down coverage

provided by many umbrella liability policies for (1) claims that are not covered by an underlying policy because the underlying policy's aggregate limits have been depleted and (2) claims for which the underlying policies do not provide any coverage, regardless of aggregate limits

intellectual property liability insuring agreement

provides an insured with coverage for any copyright, trade secrets, trademark, or patent infringement claims arising out of the use of the insured's protected ideas or works (or infringing on the protected ideas or works of another)

electronic data protection insuring agreement

provides coverage for costs to recover or restore electronic data that has been altered, destroyed, deleted, or damaged

cyber extortion insuring agreement

provides coverage for expenses related to computer network kidnap and/or ransom events

notification or remediation insuring agreement

provides coverage for expenses related to crisis management during and after a cyber risk loss (typically related to a security breach)

technology errors and omissions liability insuring agreement

provides coverage for liability arising from any negligent act, error, or omission relating to an insured's products or services provided to others

network security liability insuring agreement

provides coverage for liability arising from security breaches to an insured's computer network

electronic media liability insuring agreement

provides coverage for liability arising from the insured's electronic content

privacy liability insuring agreement

provides coverage for liability arising from unauthorized disclosure or use of the private information of others or, depending on the insuring agreement, liability arising out of an insured's failure to comply with privacy provisions contained in laws such as the Health Insurance Portability and Accountability Act (HIPAA), the Gramm-Leach-Bliley Act (GLBA), or any anti-identity theft legislation. Actions typically are generated by a network security breach or unauthorized access to or use of information.

business interruption insuring agreement

provides coverage for loss of business income, loss of contingent business income, and payment of extra expenses incurred as a consequence of a business interruption or suspension of the insured's computer system (or dependent system) due to a computer network security breach or other specified cyber events

Towing Coverage

provides coverage for towing and labor performed at the place of disablement

Political risk insurance

provides protection against seizure of assets, currency inconvertibility, and interference with contractual performance for a firm conducting operations in a foreign country

hammer clause

provision that if the insured does not agree to a proposed settlement, the insured must take over the defense and pay any further defense expenses as well as the amount of any judgment or settlement that exceeds the amount for which the insurer could have settled the claim, usually compels the insured to agree to the settlement proposed by the insurer.

Bordereau reporting

reporting for reinsurance contracts in a summarized, aggregated form, may include product line detail or type of loss detail

tenancy in partnership

rights of survivorship, concurrent ownership by partnership. each partner has interest of full amount, but losses are paid to first named insured

NBCR acts of terrorism

terrorist attacks that use nuclear, biological, chemical, or radiological materials

"Split Definition" Disability

the "any" and "own" occupation concepts are combined. For example, the policy might use an "any occupation" definition for the first six months of disability, and then it might revert to an "own occupation" definition if the disability extends beyond six months

Prospective Approach

the current value of the deposit is set equal to the present value of future payments, irrespective of the initial deposit or past payments

Interest Settlement Option

the death benefits are retained by the insurer, and interest is periodically paid to the beneficiary

Retrospective Approach

the deposit is a function of the initial deposit, past payments, and the current estimate of all future payments

Economic depreciation

the difference between the replacement cost of the property and its current market value

self-insurance (self-funding)

the employer funds and pays part or all of an employee's medical expenses

Bank Deposit Approach

the ending deposit for a reporting period is dependent solely on the beginning balance, the credited rate for the period, and any deposits or withdrawals during the period

Beneficiary of an Annuity

the individual or entity designated to receive the death benefit if the annuity owner or annuitant dies

conditionally renewable policy

the insurer has an option to increase the premium and change the policy terms at renewal, also allows the insurer to cancel the contract if the conditions for renewal are not met

Buildup

the intentional inflation of an otherwise legitimate claim

lex fori

the law of the forum jurisdiction; governs procedure.

lex loci

the law of the jurisdiction where the wrong occurred; governs any substantive matters relating to the lawsuit

Employee Retirement Income Security Act (ERISA)

the most comprehensive statute regarding employee benefits., imposes specific duties on all employee benefit plan "fiduciaries."

Accumulation Period

the period between the annuity owner's purchase of the annuity and the annuitant's age at which benefit payments begin

forum jurisdiction

the place where the party sues

revocable beneficiary designation

the policyowner can make beneficiary changes without the beneficiary's consent

Adjudication

the process by which agencies decide cases and settle disputes

bailment

the temporary possession by one party of personal property owned by another party for a specific purpose, such as cleaning or repair

Waiting Period (Elimination Period)

the time that elapses after a wage earner becomes disabled, before income benefits will be paid

Occupancy

the type of activity conducted inside the building

auto bail bond payment limit

up to 250

Mortality Risk of Life Annuities

when the annuitant dies, the premium is entirely liquidated and nothing or very little remains for the heirs