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Insurance-Insight.com/IC-38 Short Topics

Insurance Vocubulary


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Ab initio

Latin for -from the beginning. This adverb was adopted at the beginning of the 17th century directly...

Abandonment

A practice effectively restricted to marine insurance, whereby the assured surrenders all rights in ...

Absolute Assignment

The Assignment of policy means the transfer of rights under a contract of insurance, whereby another...

Acceptance (law of contract)

One of the elements of a contract, where one party agrees to accept an offer. ...

Accident

An unexpected event or circumstance without deliberate intent....

Accident year

The calendar or accounting year in which a loss occurs....

Accidental Death Insurance

An insurance policy that pays out only if the insured dies in a covered accident. Some of the leadin...

Accredited Lloyds broker

A firm registered as a Lloyd?s broker. (A Lloyd?s broker)....

Accrued Interest

Interest that has been earned but not yet paid out....

Actual Cash Value (ACV)

Actual Cash Value (ACV) is a form of compensation in which depreciation is taken into account. This ...

Actual Total Loss

This term derives from section 57 of the Marine Insurance Act 1906 (MIA) and refers to situations in...

Actuary

Actuaries are professionals who analyze the financial costs of risk and uncertainty. They use mathem...

Adjuster

See Loss Adjuster....

Adjustment premium

An additional or return premium that is payable in relation to a deposit premium depending on the pe...

Administrator

Person appointed to manage the property of another. ...

Advance Loss of Profits (ALOP)

Also known as Delay in Startup Policy (D.S.U.) The policy covers financial consequences of a project...

Adverse Selection

The social phenomenon whereby persons with a higher than average probability of loss seek greater in...

Agency by Estoppel

An application of the doctrine of estoppel to an agency situation is where a person, by words or con...

Agent

Someone who acts for another person (the principal) usually for reward. ...

Aggregate

Total (limit of indemnity, premium, retention etc.)....

Aggregate excess of loss reinsurance

A form of excess of loss reinsurance in which the excess and the limit of liability are expressed as...

Agreed Bank Clause

Agreed Bank Clause is the Party or entity that gets paid first in the event of a loss. The insured i...

Agreed value policy

An insurance contract under which the insurer agrees to pay the insured a stated amount in the event...

Agriculture Insurance Company of India Limited (AIC)

Agriculture Insurance Company of India Limited (AIC) was established by the Government of India, to...

All Risks Insurance Policy

A form of property insurance cover where all causes of loss are insured unless specifically excluded...

Allision

Allision is ?the running of one ship upon another ship that is stationary.? The distinction between ...

Alteration of Risk

One of the general conditions in an insurance policy is called ?Alteration of Risk? which requires t...

Analytic Methods Models

Analytic Methods Models whose solutions can be determined in closed form by solving a set of equatio...

Annual Financial Statements and Auditors Report

A requirement upon all insurance brokers, is that they have to submit an annual audited financial st...

Annual Renewable Term

A type of life insurance that covers life or other risk for a term of one year, and it then renews e...

Annuitant

Another name of claimant, The person (or persons) who receives the payments of an annuity. Usually, ...

Annuity

A contract whereby an insurer promises to make a series of periodic payments (?annuity benefit payme...

Anti-Money Laundering (AML)

Anti-Money Laundering (AML) is a set of policies, procedures, and technologies that prevents money l...

Anti-selection

Anti-selection is a term that is often used by an insurance company in conjunction with adverse sele...

Apparent Authority

The authority of an agent may be apparent instead of actual, where it results from a manifestation o...

Appraisal

an estimate of value....

Appreciation

In the context of property insurance an increase in value of the property insured....

Approved Person

'approved person' or 'AP' means an entity appointed by an insurance repository as its agent to perfo...

Arbitration

a binding dispute resolution mechanism whereby a conciliator with no interest in the outcome interce...

Arson

Arson is the crime of setting fire to a building on purpose willfully, wrongfully, and unjustifiably...

Assignment of Policy (Insurance Contract)

The transfer of rights under a contract of insurance, whereby another person becomes the policyowner...

Assignment of the Right to Insurance Money

The transfer of the right to insurance money to a third party, who then acquires the right to sue th...

Attritional loss ratio

The measure of residual insurance claims as a percentage of earned premiums (net of reinsurance). At...

Average (in marine insurance)

In insurance parlance ?average? means loss. The particular loss means a loss which is not for total ...

Average (in non-marine insurance)

a policy provision which imposes a penalty for under-insurance when a claim arises. ...

Average Adjuster

The word "Average" means Loss or Damage in Marine Transit. So, An average adjuster is a loss Adjuste...

Aviation Hull insurance

he insurance of the aircraft itself is referred to as ?Aviation Hull? insurance and covers the aircr...

Bailee

A person who holds the property of another person (the bailor) under a contract or agreement accordi...

Bancassurance

Bancassurance is an arrangement for selling insurance product through banks. Banks and insurance com...

Basis (of insurance) clause

A clause that makes the declarations contained in an insurance proposal form the "basis" of any cont...

Beneficiary

The person or persons who will receive the death benefit of your life insurance policy or annuity. T...

Beyond economic repair

Where the cost of repairing the insured property, e.g. a car, exceeds the market value of that prope...

Bill of Lading

A bill of lading is a legal document that serves three core purposes during the freight of a cargo. ...

Blanket bond

A blanket bond is insurance coverage carried by brokers, investment bankers, and other financial ins...

Blanket coverage

Coverage for property and liability that extends to more than one location, class of property or emp...

Boilerplate contract

In legal terms known as ?Contract of Adhesion? is a type of contract (i.e. the Insurance contract) w...

Bonds

A form of debt security whereby the debt holder has a stake in the company. Obligations issued by bu...

Bonus-malus system (BMS)

A bonus-malus system (BMS) is a system that adjusts the premium paid by a customer according to thei...

Book Value

original cost, including capitalized acquisition costs and accumulated depreciation, unamortized pre...

Bordereaux

A list of premiums payable and claims paid or due which is prepared by a cover holder for a managing...

Breach

Failure to fulfil an obligation, perhaps in connection with contractual terms, or related to agency ...

Breakbulk cargo

Breakbulk cargo or goods are those that cannot fit in standard-size shipping containers or cargo bin...

Broker

Brokers act as the agent of the insured or reinsured to arrange insurance or reinsurance with insure...

Brokerage

The commission that is payable to a broker for placing an insurance or reinsurance contract with an ...

Builders risk hull insurance

Builders risk hull insurance covers the risk of damages/losses to the ships during the time of its a...

Burden of Proof

When a person is bound to prove the existence of any fact, it is said that the burden of proof lies ...

Burglary insurance

Burglary insurance is an insurance policy that protects against burglary, robbery, theft and other. ...

Business interruption insurance

Business interruption insurance is?insurance coverage that replaces income lost in the event that bu...

Business process reform

An initiative to increase the speed and efficiency with which business is transacted and also to red...

Buy back

In the context of general insurance this refers to the purchase of cover in respect of an otherwise ...

Cancellation clause

A clause in an insurance contract which permits an insurer and/or an insured to cancel the contract ...

Capacity (underwriting)

the underwriting capacity of an insurance company or reinsurance company....

Capacity to Contract

The legal ability to enter into a contract, without which, the proposed contract will be defective. ...

Capital Adequacy

Capital Adequacy is the determination of the minimum amount of capital needed to satisfy a specified...

Capital Attribution

Capital Attribution The assignment of enterprise level capital to various business segments that mak...

Capital provider

As regards a company, its shareholders. As regards to Partnership firm, its Partners. As regards to ...

Capital Structure

Capital in a Company or organization usually injected in various forms, Debt, Capital, Preference Sh...

Captive Agent

an individual who sells or services insurance contracts for a specific insurer or fleet of insurers....

Captive insurance company

A captive insurance company is fully owned and controlled by its insureds. It?s a type of ?self-insu...

Captive Insurer

It primarily underwrites its founder?s own risks. The founder, or parent company, may be one company...

Cargo Insurance

Cargo Insurance is a branch of Marine Insurance. Inland Marine insurance is property coverage for ma...

Carrier (of risk)

An insurer or reinsurer....

Cash and Carry

Insurance in India is operated as a ?Cash and Carry? market i. e. Cover commences only on Payment of...

Cash Equivalent

short-term, highly liquid investments that are both: (a) readily convertible to known amounts of ...

Cash Payment

A method of providing an indemnity, or paying the policy benefit (Claim). ...

Casualty business

Another term for liability insurance....

Catastrophe

Catastrophe is an event causing great and usually sudden damage or suffering; a disaster. The defini...

Catastrophe Risk (CAT)

CAT risk can be caused by natural catastrophes, such as hurricanes, storms or floods, and earthquake...

Causa Proxima or Proximate Cause

Causa Proxima or Proximate cause is the most proximate or nearest or immediate cause of a loss in an...

Caveat emptor

Caveat emptor, (Latin: ?let the buyer beware?), in the law of commercial transactions, principle tha...

Cedant

A insurer that transfers a risk exposure under a reinsurance contract....

Cedant?s line

The retention under a surplus lines treaty....

Cede

To transfer a risk exposure under a reinsurance contract....

Central Consumer Protection Authority (CCPA)

The New Central Consumer Protection Authority (CCPA) established by Central Government in 2019 has p...

Certificate of insurance

Depending on the context this term may refer to: (a) A document which evidences the existence of ins...

Cession

A particular risk exposure that is transferred under a reinsurance treaty....

Chief Risk Officer

Individual responsible for overseeing all aspects of risk within an enterprise; usually responsible ...

CIF

A ?Cost, Insurance, Freight? (CIF) contract is a type of contract in which the seller of the goods m...

Claim

Depending on the context this term may refer to: (a) a demand made by a policyholder on his insurer(...

Claim Settlement Ratio

The formula to calculate the claim settlement ratio is calculated by dividing the number of insuranc...

Claimant

The person making a claim....

Claims

The request by the insured for indemnity or policy benefit under his insurance. Alternatively, claim...

Claims (Denial of)

A section within the Code of Conduct for Insurers relates to guidelines to be followed when rejectin...

Claims made policy

A policy which only pays claims that are notified to the insurer during a specified period....

Claims Outstanding

Put simply, they are claims which, as at a particular date, remain unpaid. The term is defined in mu...

Class Rates

Class Rates are published in a manual, and so the class rating method is sometimes called a?manual r...

Classification of Risk

Categorising risks for a particular purpose....

Client Account

Part of the Minimum Requirements Specified for Insurance Brokers is that they should maintain at lea...

Code of Conduct for Insurers

This code lays down recommended practices for insurers. ...

Coinsurance

A clause contained in most property insurance policies to encourage policy holders to carry a reason...

Collectability

Whether or not arranged reinsurance is likely to prove effective (i.e. whether the reinsurers can or...

Combined Ratio

Combined Ratio indicates the profitability of an insurance company, calculated by adding the loss an...

Combined ratio (COR)

A measure of the profitability of an insurer?s day-to-day underwriting activity. It is the ratio of ...

Commercial Invoice

Commercial Invoice is the key accounting document for the goods from the seller to the buyer. Used t...

Complaints and Disputes

This important topic is given guidelines and recommended practices in the Code of Conduct for Insure...

Composite (Insurer)

Originally designating an insurer which transacted more than one type of business, the term now is l...

Composite Broker

means an Insurance Broker, registered by the Authority who solicits and arranges insurance and/or re...

Composite Insurance Agent

?Composite Insurance Agent? is an individual who is appointed as an insurance agent by two or more i...

Composite rating

Composite rating is a tool to rate large complex risks and where detailed inspection and audit is ca...

Comprehensive

means all-inclusive; providing more complete protection. Generally used in motor insurance cover, Co...

Concentration of Risk

Concentration of risk was originally a term that insurer used to describe insurance risk in the form...

Concurrent Causation

property loss incurred from two or more perils in which only one loss is covered but both are paid b...

Consequential loss

A consequential loss is an indirect loss resulting from an insured's inability to use business prope...

Constructive total loss

Constructive total loss is a term used by insurer when it agrees to settle a claim at full value of ...

Consumer Councils

Consumer Councils are established in Central, State and District labels for better protection of the...

Consumer Protection rights

Consumer Protection rights granted under the Consumer Protection Act ensures that consumers can make...

Contingent Beneficiary

A contingent beneficiary is a secondary beneficiary. They receive the account benefits only if the p...

Contingent contract

A contingent contract depends upon whether or not a future event takes place. Such contract cannot b...

Contingent Liability

The liability of an insured to persons who have incurred bodily injury or property damage from work ...

Contra proferentem rule

The contra proferentem rule states that where there is doubt about the meaning of words, the words w...

Contract

A legally enforceable agreement...

Contract of Adhesion

Contract of Adhesion is a type of contract (i.e. the Insurance contract) where one Party requiring t...

Contract of Affreightment

The Contract of Affreightment which means the transporter needs to issue a document to the consignor...

Contract with Minor

To have a valid contract, all parties signing the contract must have the legal capacity to do so. In...

Contractual Liability

Liability coverage of an insured who has assumed the legal liability of another party by written or ...

Copay

a cost sharing mechanism in group insurance plans or medical insurance plan where the insured pays a...

Council of Lloyd?s

The Council of Lloyd?s discharges some of its functions directly by making decisions and issuing res...

Counter-Offer

An offer made by the original offeree to the original offeror, proposing a contract on different ter...

Cover Note

A cover note is a document issued provisionally pending issue of a regular policy. It happens at tim...

Credit Risk

part of the risk-based capital formula that addresses the collectability of a company's receivables ...

Crisis Management

The proactive response of an organization to a severe event that could potentially impair its abilit...

Crop-Hail Insurance

coverage for crop damage due to hail, fire or lightning....

Current ratio

A Current ratio (also called liquidity ratio) is a type of financial ratio used to determine a compa...

Customer Servicing

Also known as Client Servicing, this involves all aspects of communication with existing policyholde...

Cut-through clause

A cut-through clause is a reinsurance contract provision that allows a party, other than the ceding ...

D.S.U.

See Delay in Startup Policy (D.S.U.). ...

Declinature

The refusal of an insurer or reinsurer to offer terms of cover....

Deductible

The amount that is deducted from some or all claims arising under an insurance or reinsurance contra...

Deeds

A deed is a written instrument signed, sealed and delivered. ...

Deemed

Treated as. ...

Defeasible Interest

When a seller insurable interest passed on to the buyers, his insurable interest becomes defeasible ...

Defective Contracts

Contracts which, for one reason or another, are void, voidable or unenforceable, as the case may be....

Deferred Annuity

A type of annuity that delays, or defers, income payments until a later date of your choosing. There...

Delay in Startup Policy (D.S.U.).

See Advance Loss of Profits (ALOP) ...

Deposit premium

A premium that is payable at the inception (start) of an insurance or reinsurance contract and in re...

Depreciation

The decrease in the value of an item due to age, use or wear and tear. Such devaluation is not cover...

Deterioration in reserves

Where the reserves of an insurer or reinsurer for prior years are insufficient to meet the estimated...

Direct business

Insurance placed with an insurer direct and not through an intermediary....

Direct Written Premium

Total premiums received by an insurance company without any adjustments for the ceding of any portio...

Director s & Officer?s Liability Insurance (D&O)

It?s a sub-set of Professional Indemnity Insurance where it protects a Directors, officers, or owner...

Disclaimer

A disclaimer is a legal method that involves individuals or organizations rejecting responsibility d...

Dividend (in insurance)

A partial refund of premiums paid on permanent life insurance. Similar to the dividends paid by a co...

Duties owed by Agent to Principal

Responsibilities deemed to apply, or individually specified, such as obedience to legitimate orders,...

Duties owed by Principal to Agent

Corresponding responsibilities deemed to apply, or individually mentioned, such as payment of agreed...

Duty of disclosure

The duty of every person seeking insurance or reinsurance to inform the insurer/reinsurer from whom ...

Earned premium

The proportion of premium that relates to a used period of cover....

EBITDA

(Earnings Before Interest, Dividends, Taxes, Depreciation and Amortization). Cash flow measure used ...

EBNR

Earned but not reported - premium amount insurer reasonably expects to receive for which contracts a...

Economic Capital

Market value of assets less fair value of liabilities; the amount of capital required to meet a spec...

Electronic Transactions Ordinance

Legislation which from April 2000 (amongst other things) allows electronic information submission wh...

Emotional (Risk)

An uncertainty that leads to grief and sorrow if realised. ...

Employees' Compensation Insurance

Compulsory insurance in which relates to the statutory liability of an employer to pay specified com...

Employers Liability

employers' liability coverage for the legal liability of employers arising out of injuries to employ...

Encumbrance

outstanding mortgages or other debt related to real estate and any unpaid accrued acquisition or con...

Endorsement

A document that is attached to a slip, cover note or policy which evidences one or more changes in t...

Equal Opportunity

A concept that has received particular legislative attention, with Ordinances passed with a view to ...

Equity

That body of rules formulated by the courts to supplement the rules and procedure of the common law....

Errors and Omissions Liability

Professional Liability other than Medical - liability coverage of a professional or quasi profession...

European Economic Area

The member states of the European Union plus Norway, Iceland and Liechtenstein....

European Union

The European Union is made up of 27 Member States: Austria, Belgium, Bulgaria, Cyprus, Czech Republi...

European Union/European Economic Area - definition of a risk

A risk is deemed to be located in an European Union or European Economic Area member state if it is:...

Ex gratia payment

A payment made by underwriters ?as a favour? or ?out of kindness? without an admission of liability ...

Ex works (EXW)

Ex works (EXW) or ex warehouse is an international trade term that describes that a seller makes a p...

Excepted (Excluded) Peril

A cause of loss excluded by the terms of the insurance (e.g. suicide under a personal accident insur...

Excess

The amount or proportion of some or all losses arising under an insurance or reinsurance contract th...

Excess Clause

The amount that is deducted from some or all claims arising under an insurance or reinsurance contra...

Excess of loss

A type of reinsurance that covers specified losses incurred by the reassured in excess of a stated a...

Excess of Loss Reinsurance

loss sharing mechanism where an insurer pays all claims up to a specified amount and a reinsurance c...

Exclusion

A term in an insurance or reinsurance contract that excludes the insurer or reinsurer from liability...

Executor

Person named in a will whom the testator wishes to administer the estate. ...

Expense Loading

The premium that insurance companies charge not only covers the cost of expected losses but also cov...

Expense Ratio

The expense ratio helps a company compare its expenses incurred to underwrite a policy against the r...

Experience Rating

rating system where each group is rated entirely on the basis of its own expected claims in the comi...

Export Credit Guarantee Commission (ECGC)

Export Credit Guarantee Commission (ECGC) provides a range of insurance covers to Indian exporters a...

Exposure

risk of possible loss....

Extended reporting period

The period after the expiry of a claims made policy in which claims under that policy must be made i...

Facultative Reinsurance

Reinsurance for a specific policy for which terms can be negotiated by the original insurer and rein...

Facultative risk

A reinsurance risk that is placed by means of separately negotiated contract as opposed to one that ...

Facultative/obligatory treaty

A reinsurance contract which allows the reassured to select which risks of a given type are to be ce...

Fair Discrimination in Insurance

Justified differential practices adopted by insurers to meet the realities of situations, e.g. charg...

Fair Value

the amount at which an asset (or liability) could be bought (or incurred) or sold (or settled) in a ...

FDI

A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a busin...

Fee for service

Where a broker is remunerated on the basis of a fee agreed with its client instead of brokerage. The...

Fidelity insurance

A type of insurance which is designed to protect a firm from losses caused by the dishonest acts of ...

Fiduciary

The meaning of FIDUCIARY is a relationship in which one party places special trust, confidence, and ...

File and Use System

Under the file and use system, an insurer, who wishes to introduce a new product, has to file an app...

Financial Guaranty

a surety bond, insurance policy, or an indemnity contract (when issued by an insurer), or similar g...

Financial Risk

An uncertainty producing a loss measurable in monetary terms if realised. ...

Financial underwriting

Financial underwriting is a risk assessment tool used by life insurers to determine the whether the ...

Fire Insurance

Fire insurance covers a policyholder against fire loss or damage from a number of sources. These inc...

First-loss

A first-loss is an insurance policy in which an insurer provides cover for a sum less than the total...

Fit and proper

A common phrase in regulatory instruments, indicating that the individual occupying or wishing to oc...

Floating insurance

Floating insurance is a type of insurance that protects property or goods in two or more place and w...

Floating Policy

An 'floating policy' is also known as open policy is issued to large business houses who are making ...

Foreign Direct Investment (FDI)

A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a busin...

Franchise

A rare policy provision whereby the insured is not covered for any loss not exceeding or attaining t...

Fraud (Insurance)

Fraud against the insurer is possible in a number of ways. These could involve the insurance interme...

Fraudulent Misrepresentation

A breach of utmost good faith, arising from the fraudulent provision of false or inaccurate material...

Fraudulent Non-Disclosure

A breach of utmost good faith, arising from a fraudulent omission to provide a material fact. ...

Free Consent

Section 13 of the Indian Contract Act, states that two persons are said to consent when they agree u...

Free Look Period

A certain amount of time (usually 30 days) to examine an insurance policy and return it to the compa...

Free of Capture and Seizure (FC&S) Warranty

It is a clause in ocean marine policies that essentially functions to delete war risk coverage from ...

Free of Particular Average (FPA)

Free of Particular Average (FPA) is an insurance contract clause that eliminates an insurer's liabil...

Full Life Insurance

Permanent Life Insurance or Whole Life Insurance....

Fundamental Risk

That type of risk whose causes are outside the control of any one individual or even a group of indi...

General average

A loss that arises from the reasonable sacrifice at a time of peril of any part of a ship or its car...

General Business

One of the two major divisions of insurance classified under the Insurance Act. It consists of a ver...

General Insurance

Another term for General Business, denoting insurance other than long term insurance. ...

General underwriters' agreement

An agreement between insurers and reinsurers on a subscription risk specifying the terms on which th...

Generally Accepted Accounting Principles (GAAP)

an aggregate of the accounting standards, principles and best practices for the preparation of finan...

Generic Rating

A Generic rate is one that applies uniformly to each exposure unit falling in some predetermined cla...

GI Council

GI Council is a statutory body under the Insurance Act 1938. It is an industry body funded by contri...

GIMAR

GIMAR presents the outcomes of The International Association of Insurance Supervisors (IAIS)?s Globa...

Goodwill

the difference between the cost of acquiring the entity and the reporting entity's share of the book...

Grace period

A short period (usually 15 - 30 days) during which cover under an annual policy may be extended beyo...

Gross claims

Claims under contracts of insurance underwritten by the Insurer plus internal and external claims se...

Gross line

The amount of risk that an insurer or reinsurer is carrying before taking account of any applicable ...

Gross premium

Original and additional inward premiums, plus any amount in respect of administration fees or policy...

Gross profit ratio (GP ratio)

Gross profit ratio (GP ratio) is a financial ratio that measures the performance and efficiency of a...

Gross written premium (GWP)

This is the total premium written by an insurer in the reporting period, before any deductions are m...

Group Life Insurance

Life insurance that covers an entire group of people (as opposed to individual coverage). Employers ...

Group of Companies

For the purposes of clause 22(b) of the Code of Practice for the Administration of Insurance Agents,...

Guaranteed Renewable

The right to continue your insurance each year as long as premiums are paid. Even if you develop a s...

Guaranteed Returns Insurance Plan

Guaranteed return insurance plans are ideal for high-return bearing investments. These plans offer a...

Hard market

When the availability of some or all classes of insurance or reinsurances is limited relative to dem...

Hazard

Something that causes an exposure to injury, loss or damage. circumstance which tends to increase th...

Hazardous goods

Goods with flash points (closed cup) of less than 90?F (32? C) are classified as Extra Hazardous and...

Hold-Harmless Agreement

A risk transfer mechanism whereby one party assumes the liability of another party by contract...

Homogeneous Cargo

The distribution of cargo along the ship?s length has a direct influence on both the global bending ...

Hull Insurance

coverage for damage to a vessel or aircraft and affixed items....

IFRS 17

IFRS 17 establishes the principles for the recognition, measurement, presentation and disclosure of ...

IIB

IIB or the Insurance Information Bureau of India is a data repository under the purview of the Insur...

Impersonation (False pretenses)

When one person assumes the identity of another for the purpose of committing a fraud, that person i...

Implied Authority

Authority that is not specifically expressed or defined in writing, but which an employee or agent a...

Inception

Commencement or beginning (e.g. of cover)....

Inception date

The date on which an insurance or reinsurance contract comes into force....

Incontestability Provision

a provision limiting the time within which the insurer has the legal right to void the contract on ...

Incontestable Clause

The incontestable period is the period that prevents the insurance company from cancelling coverage ...

Increased Value Policy

Insurance may be arranged to cover increased value of the cargo, if the Market Value of the goods at...

Incurred But Not Reported (IBNR)

(Pure IBNR) claims that have occurred but the insurer has not been notified of them at the reportin...

Incurred but not reported (IBNR) losses

Estimated losses which an insurer or reinsurer, based on its knowledge or experience of underwriting...

Incurred claims ratio (ICR)

Incurred claims ratio (ICR) indicates a general insurer?s ability to pay claims. It is calculated as...

Incurred losses

The aggregate of the paid and outstanding claims of an insurer or reinsurer for a year of account or...

Indemnity

The principle according to which a person who has suffered a loss is restored (so far as possible) t...

Indemnity (How Provided)

Exact compensation to the insured may be provided by a cash payment, by repair or replacement, or by...

Index-Based Insurance

Parametric insurance (also called index-based insurance) is a non-traditional insurance product that...

Indication

A non-binding statement by an underwriter of the likely level of premium that he would charge to und...

Institute Cargo Clauses (I.C.C.)

For export/import policies, the Institute Cargo Clauses (I.C.C.) are used. These clauses are drafted...

Insurable interest

If an insured wishes to enforce a contract of insurance before the Courts he must have an insurable ...

Insurable Risk

A threat of loss that meets the necessary criteria for feasible insurance cover. ...

Insurance

A contract whereby an insurer promises to pay the insured a sum of money or some other benefit upon ...

Insurance Advisory Committee

Section 25 of IRDAI Act 1999 provides for establishment of Insurance Advisory Committee which has Re...

Insurance Agent

An agent in an insurance contract, usually representing the insurer and remunerated by commission on...

Insurance Association of India

Section 64A of Insurance Act, 1938 provides for constitution of an Insurance Association of India co...

Insurance broker

An individual or firm that acts as agent for an individual, body or firm in arranging insurance cove...

Insurance contract

Determines what insurance coverage is in place and determines the legal framework under which the co...

Insurance Density

Insurance density is used as an indicator for the development of insurance within a country and is c...

Insurance Information Bureau of India

IIB or the Insurance Information Bureau of India is a data repository under the purview of the Insur...

Insurance Intermediaries

These consist of insurance agents (usually representing the insurer) and insurance brokers (usually ...

Insurance Intermediaries- Duties to Policyholders

With this topic, there are common areas for both insurance agents and insurance brokers. In addition...

Insurance intermediary

A person through whom an insurance contract is affected. It normally refers to an insurance broker a...

Insurance is a subject matter of solicitation

'Insurance is a subject matter of solicitation', which is found in all insurance advertisements in I...

Insurance of Legal Rights

Also called pecuniary insurance, this covers the infringement of rights or the loss of future income...

Insurance of Liability

Insurances where the subject matter is the legal liability of the insured for death, injury or prope...

Insurance of Pecuniary Interests

The insurance of financial interests, not conveniently falling within the traditional categories of ...

Insurance of Property

Insurances where the subject matter is physical property, e.g. motor car (own damage) and fire insur...

Insurance of the Person

Insurances where the subject matter is the life, limb or health of the person insured e.g. life insu...

Insurance policy

See policy....

Insurance Repository

Only a company registered under the Companies Act, 1956 and having a paid-up capital of more than Rs...

Insurance Sales

The activity of an insurer in connection with marketing, product liaison and general monitoring of t...

Insured

A person who is insured under a contract of insurance. Where there is one insured this person may al...

Insured Peril

A cause of loss insured by the policy. An insured peril must always be involved before a valid claim...

Insurer

That party to an insurance contract who carries the risk. Insurers usually are corporations, though ...

Integrated Grievance-Management-System (I.G.M.S.)

The Grievance Redressal Cell in the Consumer Affairs Department of the IRDA of India looks into comp...

Intention to Create Legal Relation

An important element in simple contracts, whereby the parties must have intended the agreement to ha...

International Financial Reporting Standards (IFRS)

International Financial Reporting Standards (IFRS) are a set of accounting rules for the financial s...

International Insurance Society -IIS

International Insurance Society -IIS- mission is one of international collaboration, bringing togeth...

International Maritime Bureau (IMB).

It is a specialized division of the International Chamber of Commerce (ICC). The IMB is a non-profit...

International Organization for Standardization

ISO (International Organization for Standardization) is a worldwide federation of national standards...

Intervening cause

An event that prevents a loss being attributable to another event by breaking the chain of causation...

Intestate

A situation in which someone dies without a legal will. The distribution of the deceased's assets th...

Invalid (Contract)

An agreement that has no legal effect...

Investment Committee

Every insurer in India is required to form an Investment Committee which consists of a minimum of 2 ...

Investment income

That part of the income of an insurer or reinsurer that comes from the investment of premiums and re...

Inwards Reinsurance

Reinsurance of part or all of another insurer's risks, resulting in reinsurance premium coming ?in?....

IRDAI

The Insurance Regulatory and Development Authority of India (IRDAI) is a regulatory body under the j...

IRDAI (Investment) Regulations, 2000

IRDAI (Investment) Regulations, 2000 states that every insurer carrying on the business of life-insu...

Irrevocable Beneficiary

A life insurance policy beneficiary who cannot be removed from a policy unless they agree to be, and...

Is Insurance being a Charity/Business/Social Service?

Because an?insurance company?is a business, it is obvious that it should earn some profit, But to b...

ISO

ISO (International Organization for Standardization) is a worldwide federation of national standards...

ITC New for Old clauses

MIA 1963 allows reasonable deductions (usually termed as third) for betterment of the machinery, How...

Joint Tortfeasors

Joint wrongdoers in cases of common action, agency or vicarious liability. ...

Judgment ratings

Judgment ratings?are used when the factors relating to potential losses cannot easily be quantified ...

Jurisdiction clause

A clause in an insurance or reinsurance contract which states to which territory?s courts any contra...

Key-Man insurance

Key employee or keyman is a term used specifically for an important employee or executive who is cor...

Kutcha (inferior) construction

The Fire Tariff defines ?Kutcha? (inferior) construction as buildings having walls and/or a roof of ...

Lading

Lading is the process of loading a ship with cargo. And the bill of lading is a document that detail...

Lapse

Termination of coverage due to nonpayment of premiums within a specified time period. A lapsed polic...

Law Commission

The commission is established for a fixed tenure and works as an advisory body to the Ministry of La...

Law of Large Number

According to the law of large numbers. If the risk of loss can be spread over a large enough group, ...

Lead Insurer

A co-insurance is a process where large insurance portfolio is shared between two of more insurers f...

Legal Person

A?legal person is?any being (not being a human being) which includes an object, a mass of property, ...

Legality (contract)

An essential requirement with contracts, that the proposed agreement is not contrary to any aspect o...

Liability insurance

An insurance which covers the insured against third party claims or, in the case of employer?s liabi...

Life assurance

Another term for life insurance....

Life assured

The person whose life is insured under a life insurance....

Life Expectancy

The number of years someone is expected to live, based on statistical research. Insurers factor in l...

Life insurance

A policy that pays a specified sum to beneficiaries upon the death of the life assured, or upon the ...

Lifetime Coverage

An insurance policy that lasts for your entire life, as long as premiums are paid. Whole life insura...

Lifetime Disability Benefit

a provision in some disability income policies to recoup lost wages for the term of disability or r...

Limit of indemnity

Another term for policy limit. It refers to the maximum amount payable under a policy of insurance o...

Line

The proportion of an insurance or reinsurance risk that is accepted by an underwriter or which an un...

Lloyd's

Depending on the context this term may refer to - (a) the society of individual and corporate unde...

Lloyd's agents

Agents which are independent businesses that provide surveys and loss adjusting services to managing...

Lloyd's market

This term may refer to the place where business is transacted between managing agents and Lloyd's br...

Lloyd's Act 1982

The most recent of seven private Acts of Parliament that define the powers of the Society of Lloyd's...

Lloyd's broker

A firm that is listed in the register of Lloyd's brokers maintained under the Intermediaries Byelaw ...

Lloyd's Market Board

The committee of the Council of Lloyd's that was formerly responsible for the development and growth...

Local Authorities Clause

Reinstatement Value Policy may be extended to cover additional cost of reinstatement inc...

Location Clause

The Limit per Location represents the maximum amount the Insurer shall pay in the event of a loss or...

Long Term Business

One of the two major divisions of insurance, as per the Insurance Companies Ordinance. The dominant ...

Long-tail Business

Classes of insurance where claims under a policy may arise and develop over a long period of time, p...

Loss Adjuster

The word ?Average? means Loss or Damage in Marine Transit. So An average adjuster is a (loss Adjuste...

Loss Development Triangle

Insurer/Regulator use a loss development triangle to compare the percentage change across time perio...

Loss Payable Clause

coverage for third party mortgagee in case of default on insured property, secured by a loan, that ...

Loss Prevention

The lowering of the frequency of identified losses. ...

Loss Ratio

the percentage of incurred losses to earned premiums....

Loss Reduction

The lowering of the severity of identified losses....

Loss reserve

A loss reserve is?an estimate of an insurer's liability from future claims it may be liable to pay. ...

Loss Reserves

an estimate of liability or provision in an insurer's financial statement, indicating the amount th...

Losses Incurred

Includes claims that have been paid and/or have amounts held in reserve for future payment...

Losses Incurred but Not Reported (IBNR)

An estimated amount set aside by the insurance company to pay claims that may have occurred, but fo...

Malpractice

alleged misconduct or negligence in a professional act resulting in loss or injury....

Management of Insurance Agents

Forming Part IV of the Code of Conduct for Insurers, this section provides guidance on various relev...

Marine Clause

A clause in a fire policy to the effect that any marine insurance covering the same loss should pay ...

Market conduct supervisors (MCSs)

Market conduct supervisors (MCSs) charged with?protecting consumers of financial products and servic...

Marketing and Promotion

Conscious contact with the public to maintain public relations and promote the company's interests. ...

Material fact

This refers to any fact which would influence the judgment of a prudent underwriter in deciding whet...

Material Fact/Information

A Proposer is obliged to provide all relevant information that may influence the decision-making pro...

Material representation

A statement that is made to an underwriter during the negotiation of cover or the amendment or renew...

Medical Malpractice

insurance coverage protecting a licensed health care provider or health care facility against legal...

Merit Rating?

A?merit rating?is based on a class rating, but the premium is adjusted according to the individual c...

Microfinance

Microfinance is a way in which loans, credit, insurance, savings accounts and money transfers are pr...

Misrepresentation (of risk)

A misstatement of fact that is made by the insured or his broker to an underwriter during the negoti...

Money Laundering

A matter of international concern, where illegally obtained money is ?processed? through various met...

Moral Hazard

Personality characteristics that increase probability of losses. For example, not taking proper care...

Morbidity

the frequency or severity of disease or illness within a subset of the population....

Morbidity rate

The term morbidity rate refers to the rate at which a disease occurs in a population. These illnesse...

Morbidity Risk

the potential for a person to experience illness, injury, or other physical or psychological impair...

Morbidity Table

a statistical record of the rate of illness among the defined age groups....

More Specifically Insured

A provision which is effectively a non-contribution clause, so that any insured item (e.g. under a h...

Mortality Rate

The frequency of death at each age group. Life insurance companies use mortality rates to determine ...

Mortgage

a note used to secure a loan for real property....

Mortgage Guaranty

insurance that indemnifies a lender for loss upon foreclosure if a borrower fails to meet required ...

Mortgage Insurance

a form of life insurance coverage payable to a third-party lender/mortgagee upon the death of the i...

Named Perils

Inland marine insurance are usually written on a named-peril basis covering such perils of transport...

National Agricultural Insurance Scheme (NAIS)

National Agricultural Insurance Scheme (NAIS) (Rashtriya Krishi Bima Yojana-RKBY) . The objectives o...

Net claims

Gross claims less reinsurance recoveries....

Net earned premium (NEP)

This refers to all written premium, including what may not be earned in the reporting period. In som...

Net incurred claims

Gross claims less the reinsurance recoveries....

Net investment income

The income received from investments such as government and corporate bonds, equities and funds. It ...

Net premium

The amount of the premium that is left after the subtraction of some or all permitted deductions suc...

Net Premiums Earned

premiums on property/casualty or health policies that will not have to be returned to the policyhol...

Net worth

Net worth is the value of all assets, minus the total of all liabilities. In other words, net worth ...

Non-Contribution

A provision in an indemnity policy to avoid contributing to a claim settlement in the event of a dou...

Non-disclosure (of a material fact)

See duty of disclosure....

Non-fraudulent Misrepresentation

A breach of utmost good faith, arising when one party innocently or negligently gives to another par...

Non-fraudulent non-Disclosure

A breach of utmost good faith, arising when one party innocently or negligently fails to give to ano...

Non-Participating Life Insurance Policy

A life insurance policy that does not share in the insurance company?s surplus earnings and does not...

Non-proportional Reinsurance

reinsurance that is not secured on individual lives for specific individual amount of reinsurance, ...

Non-Smoker Rates

As non-smokers are expected to live longer than smokers, they are often rewarded with lower life ins...

Notional Premium

In case of Marine insurance, it is a practice to issue a cover note where the bank interest is also ...

Notional Value

the principal value upon which future payments are based in a derivative transaction as at a specifi...

Obligee

There are three parties to a suretyship: the surety, the principal and the obligee. It is the oblige...

Ocean Marine Coverage

Ocean Marine Coverage ? insurance covering the transportation of goods and/or merchandise by vessels...

Offer (contract)

An essential element in a simple contract, constituting the proposed terms of the intended contract....

Offeree

The person to whom a contract offer is made. ...

Offeror

The person making a contract offer. ...

Ombudsman

The Ombudsman acts as adjudicator, counsellor and mediator and he is not a Judge. The award passed b...

Open Policy

An open policy is also known as ?floating policy? is issued to large business houses who are making ...

Operation expenses

Operating expenses are incurred to run the business and include employment expenses, legal & profess...

Ordinary Good Faith

The common law duty not to lie or deliberately mislead the other party in a contract. However, this ...

Outwards Reinsurance

Reinsurance of insurer?s own business with a reinsurer, thus resulting in reinsurance premium having...

Overriding commission

A commission that is paid by a reinsurer to the reassured to cover the latter?s overheads in adminis...

Owner

Usually, the insured but may not be the same in all cases. The person who purchased an insurance pol...

Package Policy

two or more distinct policies combined into a single contract....

Paid-up Capital

Shares for which no amount remains ?on call? (i.e. all the money due for them has actually been paid...

Parameter risk and Process risk

Two basic risk elements in ratemaking are Parameter risk and Process risk. Parameter risk is associa...

Parametric insurance?

Parametric insurance?(also called?index-based insurance) is a non-traditional insurance product that...

Parole (or Oral) evidence rule

This principle limits the effects that oral statements made before a contract's execution can have o...

Participating Policy

Policy that participates in sharing the dividend or surplus earned in a policy. Every year a life in...

Particular average

A partial loss of a ship or cargo which is caused by an insured peril and which is not a general ave...

Particular Risk

A risk where the consequences are potentially of limited application, i.e. affecting relatively few ...

Performance Bond

A guarantee that a construction contract will be carried out. ...

Peril

A harmful event which may be covered under a contract of insurance or reinsurance as an insured peri...

Permanent Life Insurance

A life insurance policy that lasts your entire lifetime, as long as premiums are paid. One of the mo...

Personal accident insurance

A type of insurance which provides for the payment of specified sums in the event that the insured s...

Personal Data Protection

A subject of international importance, with the advances in computer technology. The specific legisl...

Personal lines insurance

Insurance which is sold to individual consumers such as buildings, contents and travel insurance. Th...

Physical (Risk)

An uncertainty resulting in death or injury if realized. ...

Placement (of cover)

Where a broker effects an insurance or reinsurance contract with underwriters on behalf of its clien...

Placing broker

This term may refer to an individual broker or a broking firm that places cover directly with one or...

Policy

A written/printed instrument most often issued to an insured as an evidence of the insurance contrac...

Policy Condition

Policies often contain a collection of provisions which provide a framework for the policy explainin...

Policy Dividend

Many whole life insurance policies provide dividends representing a portion of the insurance company...

Policy holder

The person who is insured under a contract of insurance....

Policy limit

Another term for limit of indemnity. It refers to the maximum amount payable under a policy of insur...

Policy Limits

Policy provisions which determine the maximum amount of insurance recovery, e.g. sum insured. ...

Policy Proof of Interest (PPI)

In marine insurance, Policy Proof of Interest policies are those where the insured has not the neces...

Policy tenure or Policy Term

The 'policy tenure? or ?Policy Term? is the duration for which the policy provides life insurance co...

Postal Life Insurance Scheme (PLI)

Postal Life Insurance Scheme of the central government and the life insurance schemes run by several...

Power of Attorney

A document that allows you to appoint someone to manage your affairs if you become unable to do so. ...

Powers of Intervention

The statutory ?teeth? given to the regulatory authorities to take action in appropriate circumstance...

Practical Classification of Insurance

The categorization of insurance business best suited to the internal organisation of the insurer (pe...

Premium

The amount charged by an insurer or reinsurer as the price of granting insurance or reinsurance cove...

Premium growth

The change in GWP from one period to the next....

Pre-shipment survey

The purpose of a pre-shipment survey of the cargo is to establish its apparent condition immediately...

Price adequacy

This ensures that an insurer is charging the adequate price in order to underwrite a risk....

Primary Functions of Insurance

The direct objectives and intentions of insurance, e.g. transferring risk and compensating losses. ...

Principal

The person for whom an agent acts ...

Principle of Average

The Principle of Average is a condition by which an insurer determines that the payment for any dama...

Principle of Contribution

The principle of Contribution means that when there is two or more insurers covering the same asset,...

Principle of Indemnity

Principle of Indemnity is defining characteristic of insurance, providing that the compensation paid...

Principle of Loss Minimization

Principle of Loss Minimization, requires that the insured must always try his best to minimize the l...

Prior years

Earlier years. This term usually refers to earlier years of account which have been closed into anot...

Pro rata cancellation

When an insurance contract is terminated mid-term by an insurer, the return premium will usually be ...

Product Development

The invention and introduction of new forms of cover, either as an individual product or as a portfo...

Product Liability

insurance coverage protecting the manufacturer, distributor, seller, or lessor of a product against...

Product Research

Monitoring and developing existing and new products to keep in line with trends and market competiti...

Professional Indemnity Insurance

A liability insurance covering professional people (doctors, lawyers, insurance brokers, etc.) for l...

Professional Negligence

A failure of the expected degree of professional competence, resulting in death, injury or loss to a...

Professional Reinsurer

An insurer that only transacts reinsurance business. ...

Profit before tax

This is an organization?s final result after all premium income, investment and other income, claims...

Proposal form

Proposal form is an offer from Proposal to enter into a Insurance agreement with the insurer. If the...

Proposal Form (or Application Form)

A standard form on which a proposer of insurance is required to supply the insurer with material inf...

Proposer

A prospective insured who completes a proposal form when seeking insurance; may also be known as an ...

Prospectus

A legal document that describes a security, such as a stock, bond or mutual fund, to potential inves...

Protection and Indemnity (P&I) Insurance

a broad form of marine legal liability insurance coverage. The protection and indemnity clause (P a...

Proximate Cause

Causa Proxima or Proximate cause is the most proximate or nearest or immediate cause of a loss in an...

Pure Risk

An uncertainty that can only result in either a loss or no change. Pure risks are those risks that ...

Qualified Prospect

In insurance marketing, a Potential customer is categorized on the basis of his or her buying author...

Quantum

The amount of loss, or the amount recoverable from the insurer. ...

Quantum

Latin for amount. Where an insured or reassured makes a claim it must first be established whether t...

Quasi-contract

A Quasi-contract is not an agreement but resembles an agreement or a contract. Generally, Contracts ...

Quota share treaty

A reinsurance treaty which provides that the reassured shall cede to the reinsurer a specified perce...

Quotation

A statement of the premium that an underwriter requires to underwrite an insurance/ reinsurance risk...

Rate

A?rate?"is the price per unit of insurance for each exposure unit, which is the unit of measurement ...

Rate making

Rate making?(also called ?insurance pricing, or ratemaking), is the determination of what rates, or ...

Ratable Share

The proportion of a loss to be paid by the respective insurers in a contribution situation, i.e. whe...

Ratification

A retrospective act of adopting a contract or a transaction by someone who was not bound by it origi...

Rating

The basis for an additional charge to the standard premium because the person insured is classified ...

Redressal of Public Grievances Rules, 1998

The Government of India, in exercise of powers conferred on it by Insurance Act, 1938 framed "Redres...

Registered Person

A person who has been registered under the Code of Practice for the Administration of Insurance Agen...

Regulation of Insurance Intermediaries

This is partly by the Government and partly by the insurance industry itself, consisting of legislat...

Reinstatement (Property insurance)

As a method of providing an indemnity, it means the restoration of the insured property to the condi...

Reinstatement Insurance

Property insurance where the settlement basis for claims is effectively ?new for old? (i.e. no deduc...

Reinstatement of cover

The restoration of cover following its exhaustion as a result of a loss by payment of an additional ...

Reinstatement Value

Reinstatement Value clause provides that in the event of loss, the amount payable is the ...

Reinsurance

A contract under which a reinsurer agrees to pay specified types and amounts of underwriting loss in...

Reinsurance to close (RITC)

A reinsurance which closes a year of account by transferring the responsibility for discharging all ...

Renewal

The continuation of an insurance contract for a further period (legally constituting a new contract)...

Repatriation

The process of returning remains of a loved one to the primary country of the deceased, then to the ...

Replacement

Where an insurer agrees to replace irreparably damaged or stolen goods with goods of a similar type ...

Replacement cost

A method of providing an indemnity, by the insurer providing a substitute item for the one lost/dama...

Reporting Requirements

Under the Insurance Companies Ordinance, every insurer has to submit annually to the Insurance Autho...

Representation

A statement of fact or expectation. Representations made as to material facts at the time of the neg...

Repudiation

Repudiation of a contract?occurs when one party to the contract demonstrates that it is unwilling or...

Reserve

An amount subtracted from a firm?s retained earnings for a general or specific purpose. (A firm?s ?r...

Reserve Bank of India (RBI)

The banking system in India is regulated by the Reserve Bank of India (RBI), through the provisions ...

Reserves

The amount of money that has been set aside by an insurer or reinsurer to meet outstanding claims, i...

Responsible Officer

More fully defined in the Code of Practice for the Administration of Insurance Agents, such a person...

Retention

The amount of any loss or combination of losses that would otherwise be payable under an insurance/r...

Retention

a mechanism of internal fund allocation for loss exposure used in place of or as a supplement to ri...

Retention Limit

maximum amount of medical and hospital expense an insurer will carry on its own. The limit can be f...

Retrocedent

A reinsurer that is reinsured under a retrocession....

Retrocession

The portion of risk that a reinsurance company cedes or amount of insurance the company chooses not ...

Retrocessionaire

The reinsurer under a retrocession....

Retrospective rating

Retrospective rating(a.k.a.retro plan) uses the actual loss experience for the period to determine t...

Return on Equity

Net income divided by net worth....

Reversionary bonus

Reversionary bonus is a bonus which is paid by the insurance company along with the maturity value o...

Revocation

The cancellation of an agency agreement by either party (which must be subject to legal and specific...

Rider

An optional add-on to an insurance policy that provides additional benefits for an increased cost. E...

Right to choose

Right to choose is one of the 6 Consumer Rights protected under the Consumer Protection Act. This ri...

Risk

This term may variously refer to - (a) the possibility of some event occurring which causes injury o...

Risk adjusted rate change (RARC)

RARC is taken into account when pricing a risk. It is a comparator of the rate that is charged in a ...

Risk Avoidance

Elimination of the chance of loss of a certain kind by not exposing oneself to the peril....

Risk Financing

No matter how effective the loss control measures an organisation takes, there will remain some risk...

Risk Management (as used by insurers)

Ways and means of improving the insured loss potential of risks that are insured. ...

Risk Management (not as used by insurers)

In banking and other financial service areas, the reference is to the control of speculative risks. ...

Risk Mapping

A visual representation of identified risks in a way that easily allows ranking them. Often represen...

Risk Retention Group

group-owned insurer organized for the purpose of assuming and spreading the liability risks to its ...

Risk Transfer

Finding another party to promise in advance to bear the consequences of one?s exposure to risk. ...

Running Down Clause

An ocean marine hull policy clause adding legal liability coverage for damage done to another ship o...

Salvage

This may refer to ? (a) property that is rescued from danger on land or at sea; or (b) an award that...

Salvage (in maritime law and marine insurance):

This term is used to mean (a) a reward payable to a person (salvor) who has successfully rescued shi...

Salvage (in non-marine insurance)

what is left of the subject matter of insurance, following damage, e.g. the wreck of a car, which ma...

Salvage Loss (partial loss)

Salvage Loss (partial loss) is loss when the goods damaged during transit are dispose of at an inter...

Salvage Loss (partial loss)

Salvage Loss (partial loss) is loss when the goods damaged during transit are dispose of at an inter...

Salvage value

The estimated cash amount that would be received if damaged property were to be sold....

Schedule rating?

Schedule rating?uses a class rating as an average base, then the premium is adjusted according to sp...

Seaworthiness

There are two implied warranties under the Marine Insurance Acts seaworthiness and legality of objec...

Section Limit

A policy provision limiting the amount payable under a particular section of the policy. ...

Securities Appellate Tribunal

Securities Appellate Tribunal was Set up under the Securities and Exchange Board of India (SEBI) Act...

Securitization of Insurance Risk

a method for insurance companies to access capital and hedge risks by converting policies into secu...

Self-Insurance

type of insurance often used for high frequency low severity risks where risk is not transferred to...

Settlement Options

A settlement is the way your life insurance policy proceeds are paid out. Options include a lump-sum...

Short-rate cancellation

When an insurance contract is terminated prior to its expiry date by the insured any return premium ...

Short-tail (risk)

A type of insurance where claims are usually made during the term of the policy or shortly after the...

Short-tail Business

Classes of insurance where claims arise and are notified in a relatively short time-scale, e.g. fire...

Shut out Cargo

Shut out Cargo means any cargo brought into the port for shipment but not shipped by the designated ...

Signed line

This refers to the amount of a given risk that an underwriter has agreed to accept. It may be the sa...

Signing Down

Where a risk is oversubscribed, which is to say that the underwriters? written lines exceed 100% the...

signing slip

is a document that is created by a Lloyd?s broker after a quotation has been accepted for the purpos...

Simple Contract

It is a contract created verbally, or by writing not under seal. It can also be inferred from conduc...

Simulation Methods

Models that use a large number of computer-generated trials to approximate an answer; relatively rob...

Single Article Limit

A property policy provision stipulating that the policy liability in respect of any one article shou...

Slip

There are two types of underwriting slip: a placing slip and a signing slip. A placing slip is a doc...

Slip policy

A signed slip which is agreed to be a policy where the insured or the reassured does not require a s...

Society of Lloyd?s

The Society incorporated by Lloyd?s Act 1871 by the name of Lloyd?s....

Soft market

When the availability of some or all classes of insurance or reinsurances is high relative to demand...

Solvency Margin

?Solvency Margin" means the excess of value of assets over the value of insurance liabilities and ot...

Solvency ratio

A solvency ratio is used in financial management that measures the extent to which assets covers the...

Special Contingency Insurance

Special Contingency Insurance provides tailored coverage to suit specific requirements. This policy ...

Speculative Risk

A risk which offers the possibilities of gain and loss....

SRCC (Strikes, Riots and Civil Commotion)

SRCC refers to Strikes, Riots and Civil Commotion Clause. An insurance clause referring to loss or d...

Stakeholders

Any individual or group with a direct interest in the affairs of the enterprise; includes shareholde...

Standard contract Form

In legal terms known as ?Contract of Adhesion? is a type of contract (i.e. the Insurance contract) w...

Standard Deviation

The square root of the variance....

Standard Risk

a person who, according to a company's underwriting standards, is considered a normal risk and insur...

Statutory Classification of Insurance

The categorization of insurance classes in accordance with statute (the Insurance Regulatory and Dev...

Stepping into the shoes of others

The term ?subrogation? also referred to as ?stepping into the shoes of others?. An insurer can step ...

Stock Option

Stock Option is something related to issue of stock or share in a company. This is an option given t...

Stop loss reinsurance

Also known as excess of loss ratio reinsurance. This is a form of excess of loss reinsurance which p...

Stop Loss/Excess Loss

individual or group policies providing coverage to a health plan, a self-insured employer plan, or a...

Stop-Lists

Risks identified by the insurer as being of a type or class not to be offered insurance cover (e.g. ...

Strategic asset allocation

An investment strategy that determines what percentage of your assets are held across financial asse...

Strategic Planning

The use of structural simulation modeling as a decision tool to assist management in selecting among...

Strategic Risks

Risks from damage to reputation, competition, demographic trends, technological innovation, capital ...

Subject Matter of Insurance

Where the Subject Matter of Insurance is lost, damaged, injured, or the like, the insurance policy w...

Subrogation

The right of an insurer which has paid a claim under a policy to step into the shoes of the insured ...

Subrogation ? (How Arising)

Subrogation may arise in tort, under contract, under statute or in salvage. ...

Subrogation - Rights (Limited)

The insurer may not retain under subrogation more than he paid as an indemnity. ...

Subrogation Clause

section of insurance policies giving an insurer the right to take legal action against a third party...

Subsequent Event

events or transactions that occur subsequent to the balance sheet date, but before the issuance of t...

Substandard Risk - (impaired risk)

risks deemed undesirable due to medical condition or hazardous occupation requiring the use of a wai...

Sue and Labour Charges

If there be any expenses incurred by the insured or its agent to minimize the loss or damage payable...

Suicide Clause

A provision in a life insurance policy that denies payment if the insured person takes his or her ow...

Sum Insured

The limit of the insurer's liability under the policy. ...

Suretyship

A suretyship contract is one whereby the surety is obliged to pay the obligee in the event of the pr...

Surrender Charge

The fee deducted from a life insurance policy or annuity payout when a policyholder cancels (or ?sur...

Survival Benefits

Part of a life insurance policy that lets you access funds while you?re still living, usually to cov...

Take it or leave it

Insurance is a contract of adhesion, where the insurer draws up the contract in its entirety and pre...

Tangible and Intangible Assets

In general there are two types of assets ? tangible and intangible. Intangible assets cover non-phys...

Target Risks

1 General insurance: the term may be used to refer to large, hazardous risks. 2 Life insurance: risk...

Term

The specific time period for which the insured person is covered under a term life policy. The insur...

Term Life Insurance

A life insurance policy that provides death benefit protection for a certain length of time, usually...

Term life insurance

A life insurance policy that pays the sum insured only if the life assured dies within the period of...

Termination of Agency

An agency relationship may be brought to an end on various grounds, including mutual consent. ...

Territorial Sea

Territorial sea, as defined by the 1982 United Nations Convention on the Law of the Sea, is a belt o...

The Indian Contract Act, 1872

The Indian Contract Act, 1872 prescribes the law relating to contracts in India and is the key Legis...

The Insurance Regulatory and Development Authority of India (IRDAI)

The Insurance Regulatory and Development Authority of India (IRDAI) is a regulatory body under the j...

Third Party

There are insurance available for Third-party liabilities which is a type of policy where insurance ...

Third party

Someone other than the insured or his insurer who has suffered injury or loss....

Third Party

A person, other than the insured or the insurer, who might be involved in a claim as a claimant agai...

Third Party Administrator

A third-Party administrator (TPA) is an organization that processes insurance claims for and on beha...

Third party liability

The liability that an insured has to a third party....

Time policies

?Time policies? like Fire & Special peril policies, covers the subject matter for a specified period...

Tort

The law of tort is notoriously difficult to define. In simple words, it is a kind of civil wrong (es...

Total Loss

A "total loss," occurs when an insured property is totally destroyed, lost, or damaged to such an ex...

Total loss

Where the subject matter of an insurance is lost, destroyed or damaged beyond repair....

Training and Development

An important area of company activity, both with inside and field staff. Especially important with i...

Transit Clause

Clause 8 of the Institute Cargo Clauses (A) 1/1/09 also known as ?Transit Clause? specifies various ...

Transparency

An important word in regulatory matters, indicating that information should be freely available and ...

Treaty

A reinsurance contract under which the reassured agrees to offer and the reinsurer agrees to accept ...

Treaty

a reinsurance agreement between the ceding company and reinsurer....

Trustee

An individual, named by the insurer who manages trusts established during one?s life and at death. A...

Uberrima fides

Latin for utmost good faith....

Uberrimae fidei

The principle of utmost good faith, uberrimae fidei, states that the insured must disclose all mater...

Under insurance

Where the sum insured does not represent the true value of the property insured....

Underwrite

This term may refer to (a) The process of evaluating, defining and pricing insurance and reinsurance...

Underwriter

The person in an insurance company who reviews the application for insurance and decides if the appl...

Underwriter

Depending on the context this term may refer to: (a) the individual who is responsible for underwrit...

Underwriters

Depending on the context this term may refer to: (a) the employees of managing agents, insurance com...

Underwriting

The process by which an insurance company determines the insurability of a risk and the terms to be ...

Underwriting Capacity

The practical, financial ability of an insurer to accept proposed business, with or without the assi...

Underwriting capacity

the underwriting capacity of an insurance company or a reinsurance company. ...

Underwriting Profit

The measure of the profitability of an insurer?s underwriting activity. This refers to earned premiu...

Underwriting Risk

section of the risk-based capital formula calculating requirements for reserves and premiums....

Underwriting-Lapse

When a Greater Than Standard Risk person conceal or falsify the Information about their actual condi...

Unearned premium

The proportion of premium that relates to the unused period of cover. Unearned premium is defined as...

Unearned Premium Reserve

All premiums (fees) received for coverage extending beyond the statement date; appears as a liabilit...

Unenforceable Contract

A contract which cannot be enforced (or sued on) in a court of law. ...

Unfair Discrimination in Insurance

This relates to the application of different terms which are not justified by the technical merits o...

Uniform Customs and Practices for Documentary Credits (UCP)

The Uniform Customs and Practices for Documentary Credits (UCP) is a set of rules on usance and issu...

Uninsured Peril

A cause of loss which is not specifically excluded from policy cover, but it is not specifically inc...

Unit Linked Investment Plans (ULIPs)

Commonly known as ULIPs, it?s a kind of hybrid fund which gives both the life insurance cover as wel...

Unit-linked Business (or Linked Business)

The policyowner?s contributions (after deductions for expenses and premiums) are used to buy ?units?...

Utmost good faith

Contracts of insurance and reinsurance are contracts of utmost good faith. In the event that either ...

Utmost Good Faith

The common law duty upon both parties in an insurance contract to reveal all material information to...

Valued Policy

A valued policy ? a policy effected on a valued basis ? is commonly issued in marine insurance. A su...

VAR (Value at Risk)

Solvency related measure of risk; used primarily in banking industry; the maximum loss an organizati...

Variance

The average squared difference between a random variable and its mean....

Vicarious Liability

A person?s liability at law for the acts and omissions of another, e.g. the principal, in respect of...

Void contract

A void contract is one that?was never legally valid to begin with?(and will never be enforceable at ...

Void policy

A contract which has no legal effect and is therefore unenforceable in a court of law. For example, ...

Voidable Contract

Although it has full legal effect, a voidable contract may be declared void as from inception, at th...

Voidable contract

A voidable contract is an agreement that may be rendered unenforceable for any number of legal reaso...

Waive (a breach)

Effectively an ?act of forgiveness?, where a breach of policy condition or other contractual require...

War risk waterborne agreement

A marine market agreement whereby underwriters will only cover goods against war risks whilst they a...

Warrant

an agreement that gives the holder the right to purchase an underlying financial instrument at a gi...

Warranty

coverage that protects against manufacturer's defects past the normal warranty period and for repai...

Warranty

An absolute undertaking by the insured to do, or to refrain from doing, some specified thing(s), or ...

Wear and tear

The amount deducted from a claims payment in recognition of the depreciation of the property insured...

Weighted Average Cost of Capital

The sum of the required market returns of each component of corporate capitalization, weighted by th...

Whole Life

life insurance that may be kept in force for a person's entire life and that pays a benefit upon th...

Whole Life Insurance

A type of life insurance that provides a set amount of coverage for your entire life. You pay the sa...

Will

A document describing what you want to happen to your assets when you die. You can also name your he...

Workers' Compensation

insurance that covers an employer's liability for injuries, disability or death to persons in their...

Written line

The amount of a risk that an underwriter is willing to accept on behalf of the Insurer or company fo...

Written Premium

the contractually determined amount charged by the reporting entity to the policyholder for the eff...

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