The transfer of inforce insurance liability by an insurer to a reinsurer by the payment of the. Authorized reinsurance reinsurance placed with a reinsurer who is. Gap insurance insurance that pays the difference between the actual cash value of a vehicle and the amount still to be paid on the loan. Grace periods the time usually 31 days during which a policy remains in force after the premium is due. Dictionary of insurance terms a absolute liability. In a traditional transaction, the cedant exchanges insurance risk for liquidity, credit, operational and sometimes basis. Coverages and benefits listed below may not be available in your state. Below are some commonly used insurance terms and their meanings. The cedant will keep all books and records in connection with the policies and reinsurance as would reasonably be expected of a prudent insurance company and will keep records sufficient to reasonably demonstrate the liability of the reinsurer under this agreement. It is used to measure the price sensitivity of a bond to changes in credit spreads. Professional liability a class of insurance policies that indemnifies the insured for thirdparty liability claims due to negligence in the performance of professional services. The insured must look to its insurer for payment of any claims, not to the reinsurer.
Bodily injuryharm a term that refers to physical injury, sickness, or disease, or death resulting there from. Contact accord texaswide agency today to learn more. In each of these examples, the cedant and reinsurer share in the premium based upon the cession percentage determined by the cedant. Specifically, the phrase ability to repay was used in the 2010 doddfrank wall. Depending on the coverage you choose, your insurance can. Large individual risk and catastrophe claims ratio. Auto insurance can cover more than just the repairs on your vehicle. Glossary of commercial insurance terms commercial insurance is divided into two main categories. Insurance profit the sum of the underwriting result and investment income on assets backing policyholders funds. Multiperil crop scheme us federally regulated crop insurance protecting against crop yield losses by allowing participating insurers. The ability to repay refers to an individuals financial capacity to make good on a debt. Rise cedant manual document information 3 arpc rise cedant manual version 3. The company that purchases the reinsurance policy is called a ceding company or cedent or cedant.
In simple terms, reinsurance is insurance for insurance com. When making decisions about health coverage, consumers should know the specific meanings of terms used to discuss health insurance. Revenue recognition, consignment sales, insurance contracts, service concession arrangement bot overview of. Alien company an insurer or reinsurer domiciled outside the u. Insurance which is primarily concerned with the losses caused by injuries to third persons in other words, persons other than the policyholder and the legal liability imposed on the insured resulting therefrom. Reinsurance is insurance that an insurance company purchases from another insurance company to insulate itself at least in part from the risk of a major claims event. Financial risk may be shared with the providers participating in the hmo. Insurance glossary india a to z terms of insurance. With reinsurance, the company passes on cedes some part of its own insurance liabilities to the other insurance company. Discussion paper preliminary views on insurance contracts. A reinsurance contract is legally an insurance contract.
Liability for damages even though fault or negligence cannot be proven. The a to z guide to legal phrases plain english campaign. Glossary of insurance terms 3 accident year experience the matching of all claims occurring regardless of when reported or paid during a given 12 month period with all premium earned over the same period. Property insurance provides coverage for property that is stolen, damaged, or destroyed by a covered peril. Described as the insurance of insurance companies, reinsurance provides.
The loss level specified in the terms of the reinsurance contract between the primary insurer and. Ocean blvd, suite 1250 long beach, ca 90802 562 2964726. The maximum amount an insurer will pay under a policy in respect of all accumulated claims arising within a specified period of insurance. These glossary terms and definitionsare intended to be educational and may be different from the terms and definitions in your plan. Glossary of insurance related terms used by lloyds and market participants. This glossary is a compilation of other glossaries and dictionaries. Reinsurance a contract of reinsurance is one by which an insurer procures a third person typically another insurance company to insure him against loss or liability by reason of such original insurance. The following definitions are intended for general guidance.
Glossary since the art market contains a reasonable amount of technical language and jargon, we have included a glossary as a general reference for readers. These are the same as those for which premium returns are submitted with the addition of public. Insurance glossary accident an unplanned and unexpected event which occurs suddenly and at a definite place. The language of insurance can be quite complex and confusing. Critical reinsurance supervision for the royal monetary. Some gap policies may also cover the amount of the deductible.
The insurer that transfers part of its risk to a reinsurer under a proportional reinsurance treaty or facultative quota. An insurance contract under which the insurer agrees to pay the insured a. Retrocedant the reinsurer that has retroceded insurance risks under a retrocession agreement. Ceding companyreinsured cedant the original insurance company that transfers part of the risk it has originally accepted. The purpose of this glossary is to provide a quick and easy reference to words and terms used by practitioners in the financial services industry with the emphasis on the insurance industry. Glossary of insurance terms accident year experience the matching of all claims occurring regardless of when reported or paid during a given 12 month period with. Under the terms of one widely used intermediary clause, premiums paid a broker by a reinsured are considered paid to the reinsurer, but loss payments and other. These glossary terms and definitions are intended to be educational and may be different from the terms and definitions in your plan or health insurance policy. Many years ago, i did some grammatical research and concluded that the word is correctly spelled cedent. Usually refers to insurance covering injury or death arising out of violent, external and visible means. Glossary of dental insurance and dental care terms. Adverse development cover a finite insurance contract where the cedant shifts the timing of losses that have already occurred, as well as those that have been. More simply stated, reinsurance is insurance typically bought by one insurance company the cedant from another insurance company the reinsurer in order to reduce the cedant s exposure or share of the risk in return for a share of the premium.
A cedent is a party in an insurance contract who passes the financial obligation for certain potential losses to the insurer. A term for an insurer that has underwritten insurance and transfers all or part of its. On march 23, 2010, president obama signed the patient protection and affordable care act ppaca into law. An insurance contract issued by an entity the reinsurer to compensate another entity the cedant for claims arising from insurance contracts issued by the cedant. Average annual loss or annual average loss aal the expected loss cost over a. Alternative risk mechanism a method of financing primary property andor casualty losses without using traditional insurers to assume risk in the primary layer. Glossary of terms the following are some key definitions of terms used in the business of insurance statements. Blanket insurance a single amount of insurance covering several items, as opposed to specific insurance, which covers one specific property, or a particular interest in a property. Manual when developing reports that are required in the orsa model.
The term property insurance includes many lines of available insurance. Accident cover provides benefits in the event of an accident occurring during the period of cover. In per risk, the cedant s insurance policy limits are greater than the reinsurance retention. Directrix glossary glossary of financial, insurance and actuarial terminology. Accounting for reinsurance contracts under international. Glossary of insurance terms 7 modified duration the weighted average term of cash flows in a bond. A ceding reinsurer is a reinsurer that transfers cedes a portion of the underlying reinsurance to a retrocessionnaire. Question if an insurance contract contains deposit or service components, should an insurer unbundle. Glossary of health coverage and medical terms page 1 of 4 glossary of health coverage and medical terms this glossary has many commonly used terms, but isnt a full list. Professional liability insurance, medical professional liability insurance cede, cedant. Claims system cedant manual document information 3 arpc claims system cedant manual version 1. Definitions provided by insurance bureau of canada are indicated with an asterisk. The result is that the insurer or reinsurer has no liability but must repay the premium to the insured or reinsured. The ifrs 4 definition of a reinsurance contra ct is an insurance contract issued by one insurer the reinsurer to compensate another insurer the cedant for losses on one or more contracts issued by the cedant.
Insurance business, 80% of the gross written premium in any year being attributable to risks related to or arising out of the business or operations of members of a group which together hold a majority of the cell shares, including for this purpose only contracts of reinsurance in respect of such risks insured by the cedant. Insurance in which the risk insured against is the death of a particular person known as the insured, upon whose death within a stated term for term insurance, or whenever death occurs for permanent insurance, the insurance company agrees to pay a stated sum or income to the beneficiary. Insurance profit margin the ratio of insurance profit to net earned premium. Insurance concerned with the insiders legal liability for injuries to others or damage to other persons property. In return for bearing a particular risk of loss, the cedent pays an.
It is not an exhaustive list of definitions and most refer to the insurance business assets and liabilities regulations, 2007 the regulations. Insurance holding company system consists of two or more affiliated persons, one or more of which is an insurer. A guide to dental ppos, hmos and other managed plans, don mayes, revised edition, 2002. Personal insurance glossary of terms the richards group.
We would like to show you a description here but the site wont allow us. An insurance or reinsurance entity designed to provide insurance or reinsurance coverage for risks of the entity or entities by which it is owned or with which it is affiliated. They do not override or qualify any definition that appears in any lloyds byelaw or regulation, in any contract or in any other document. The reinsurance of individual risks through a transaction between the reinsurer and the cedant usually the. An actuary works out whether enough money is being paid into a pension scheme to pay the pensions when they are due. Insurable interest interest in property such that loss or destruction of the property could cause a financial loss. Reinsurer the company that accepts the reinsurance offer or transfer of risk from the ceding company. Additional voluntary contribution avc extra money people in occupational pension.
However, the current exit value of that contractual right is not likely to be material if it relates to insurance contracts that will be priced at current exit value. These are the same as those for which premium returns are submitted with the addition of public liability. Grace periods the time usually 31 days during which. Professionals include doctors, lawyers, engineers, insurance agents and others. If you were to underestimate the value of your insured property when arranging insurance this would result in under insurance. Glossary of insurance terms accident an unforeseen, unintended, and unexpected event, which occurs suddenly and at a definite place.
Personal auto for most of us, our cars are one of the biggest investments we make and to experience a loss could be financially devastating. Acquisition cost the total of net commission and operating expenses incurred in the generation of net earned premium and. Insurance contracts that are subject to similar risks and managed together. Consumer glossary national association of insurance. A ceding insurer is an insurer that underwrites and issues an original, primary policy to an insured and contractually transfers cedes a portion of the risk to a reinsurer. This definition describes the contract issued by an insurer to compensate another insurer. The cedant s acquisition costs and overhead expenses, taxes, licenses and fees, plus a fee representing a share of expected profits sometimes expressed as a percentage of the gross reinsurance premium. If the amount of insurance currently being applied for with the ceding company, which may be some very large sum that clouds the judgement of.
These glossary terms and definitions are intended to be educational and may be different from the terms and definitions in your plan. In return for bearing a particular risk of loss, the. Event which causes a loss of extraordinary magnitude, such as a hurricane or tornado. Captive insurance companies are formed to serve the insurance needs of the parent organization and to escape uncertainties of commercial insurance availability and cost. Insurance business only in respect of risks related to or arising out of the business or operations of members of a group which together hold a majority of the cell shares, including for this purpose only contracts of reinsurance in respect of such risks insured by the cedant. Hildebrand reinsurance basics for the claims professional. Average annual loss or annual average loss aal the expected loss cost over a oneyear time period. Glossary of health coverage and medical terms page 1 of 6 glossary of health coverage and medical terms this glossary defines many commonly used terms, but isnt a full list. Usually refers to insurance covering injury or death arising out.
An option granted to the customer to receive additional goods or services at no cost or at a discount. Act of god an accident or event that is the result of natural causes, without human intervention, that could not have been prevented by reasonable foresight or care. Specifically, the phrase ability to repay was used in the 2010 doddfrank wall street reform and consumer protection act. Facultative reinsurance agreements often cover catastrophic or unusual. Below are definitions for some of the more commonly used terms and how. Insurance regulatory information system iris a baseline solvency screening system for the national association of insurance commissioners naic and state insurance regulators established in. The reinsurer agrees to indemnify the cedant insurer for a specified share of specified types of insurance claims paid by the cedant for a single insurance policy or for a specified set of policies.
Rise claims system cedant manual document information 4 arpc rise claims system cedant manual version 1. Use connings insurance glossary to help you understand the words, terms and phrases commonly used in the insurance industry. An event or occurrence which is unforeseen and unintended. This page provides a glossary of insurance terms and definitions that are commonly. If available, some optional coverages and benefits might be offered at an additional charge.
Glossary of financial insurance and actuarial terminology. Insurance glossary insurance terms and definitions from accord texaswide agency. Glossary 469 average an insurance concept where underinsurance insurance purchased for a sum which is lower than the value of the insured property will lead to a proportional scaling down of the loss paid. Reinsurance is a financial transaction by which risk is swapped between an insurance company cedant and a reinsurance company reinsurer in exchange for a payment reinsurance premium. A flood, earthquake or other non preventable accident resulting from natural causes that occur without any human intervention. Glossary of health coverage and medical terms page 1 of 4 this glossary has many commonly used terms, but isnt a full list. Captive insurance company a riskfinancing method or form of self insurance involving the establishment of a subsidiary corporation or association organized to write insurance.
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