Date of Issue - date when an insurance company issues a policy. Accident Only or AD&D - policies providing coverage, singly or in combination, for death, dismemberment, disability, or hospital and medical care caused by or necessitated as a result of accident or specified kinds of accidents. Life Settlements - a contract or agreement in which a policyholder agrees to sell or transfer ownership in all or part of a life insurance policy to a third party for compensation that is less than the expected death benefit of a policy. Loss of Use Insurance - policy providing protection against loss of use due to damage or destruction of property. Having a problem with an insurance company or agent? Errors and Omissions Liability | Professional Liability other than Medical - liability coverage of a professional or quasi professional insured to persons who have incurred bodily injury or property damage, or who have sustained any loss from omissions arising from the performance of services for others, errors in judgment, breaches of duty, or negligent or wrongful acts in business conduct. Pure Premium - that portion of the premium equal to expected losses void of insurance company expenses, premium taxes, contingencies, or profit margin. These are a liability to the company and not included in written premium or the unearned premium reserve. (Bickelhaupt and Magee). Treaty - a reinsurance agreement between the ceding company and reinsurer. Incurred Claims - paid claims plus amounts held in reserve for those that have been incurred but not yet paid. Living benefits rider - a rider attached to a life insurance policy providing long term care for the terminally ill. Lloyd's of London - association offering membership in various syndicates of wealthy individuals organized for the purpose of writing insurance for a particular hazard. Security - a share, participation, or other interest in property or in an enterprise of the issuer or an obligation of the issuer. Other Considerations - Unallocated annuity considerations and other unallocated deposits that incorporate any mortality or morbidity risk and are not reported as direct premiums, direct annuity considerations or deposit-type contract funds. Premiums are made for same time period. Losses Incurred But Not Reported (IBNR) - An estimated amount set aside by the insurance company to pay claims that may have occurred, but for some reason have not yet been reported to the insurance company. Encourages participation by private insurers through a flood insurance pool . Soft Market - a buyer's market characterized by abundant supply of insurance driving premiums down. Advisory Organization - a group supported by member companies whose function is to gather loss statistics and publish trended loss costs. This article will discuss one particular category called living benefit riders or accelerated death benefit riders. Can be classified into two broad categories: Defense and Cost Containment (DCC) and Adjusting and Other (AO). What does NAIC mean as an abbreviation? Must include at least one option to have the accumulation vary in accordance with the rate of return of the underlying investment portfolio selected by the policyholder and may include at least one option to have the series of payments vary in accordance with the rate of return of the underlying investment portfolio selected by the policyholder. Morbidity risk excludes the potential for an individual's death, but includes the potential for an illness or injury that results in death. Excess Workers' Compensation - either specific and/or aggregate excess workers' compensation insurance written above an attachment point or self-insured retention. (Bickelhaupt and Magee ). Developments and trends in financial markets and insurer investments. Travel Coverage - covers financial loss due to trip cancellation/interruption; lost or damaged baggage; trip or baggage delays; missed connections and/or changes in itinerary; and casualty losses due to rental vehicle damage. Blanket coverage - coverage for property and liability that extends to more than one location, class of property or employee. Product Liability - insurance coverage protecting the manufacturer, distributor, seller, or lessor of a product against legal liability resulting from a defective condition causing personal injury, or damage, to any individual or entity, associated with the use of the product. Accelerated Benefit (Insurance) - The Business Professor, LLC Commercial is defined as all motor vehicle policies that include vehicles that are used in connection with business, commercial establishments, activity, employment, or activities carried on for gain or profit. "Dual Interest" includes insurance commonly referred to as "Limited Dual Interest.". If a quoted market price is available, the fair value is the product of the number of trading units times market price. Notional Value - the principal value upon which future payments are based in a derivative transaction as at a specific period in time (the "as of" reporting date) in the reporting currency. The lifetime maximum benefit for the Accelerated Access Solution rider equals the selected percentage (2%, 4%, Homeowners Insurance - a package policy combining real and personal property coverage with personal liability coverage. 1991-2023 National Association of Insurance Commissioners. Premiums Net - is the amount calculated on the basis of the interest and mortality table used to calculate the reporting entity's statutory policy reserves. Admitted Company - an insurance company licensed to do business in a state(s), domiciled in an alternative state or country. Category Accident and Health Insurance Model Numbers: 10-36 Accident and Health Insurance Consumer Protection Model Numbers: 40-42 Accident and Health Insurance Delivery Systems Model Numbers: 68-98 Accident and Health Insurance Group Regulation Model Numbers: 100-126 Accident and Health Insurance Rate and Policy Standards Model Numbers: 134-190 Group Annuities Immediate Variable - an annuity contract that provides for the first payment of the annuity at the end of the fixed interval of payment after purchase. National Association Of Insurance Commisioners. These standards accommodate Foreign Investment - an investment in a foreign jurisdiction, or an investment in a person, real estate or asset domiciled in a foreign jurisdiction. Variable Life Insurance - life insurance whose face value and/or duration varies depending upon the value of underlying securities. This annuity contract provides for the initiation of payments at some designated future date. Select a state or jurisdiction for insurance department contact information. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. Benefits (Medical & Hospital Expenses) - total expenditures for health care services paid to or on behalf of a member. State Page - Exhibit of Premiums and Losses for each state a company is licensed. Covered Lives - The total number of lives insured, including dependents, under individual policies and group certificates. Fidelity - a bond or policy covering an employer's loss resulting from an employee's dishonest act (e.g., loss of cash, securities, valuables, etc.). Reported Losses - Includes both expected payments for losses relating to insured events that have occurred and have been reported to the insurance company, but not yet paid. Affiliate - a person or entity that directly, or indirectly, through one or more other persons or entities, controls, is controlled by or is under common control with the insurer. Variable Universal Life - combines the flexible premium features of universal life with the component of variable life in which excess credited to the cash value of the account depends on investment results of separate accounts. PDF ACCELERATED DEATH BENEFITS - Insurance Compact Retrospective Rating - the process of determining the cost of an insurance policy based on the actual loss experience determined as an adjustment to the initial premium payment. Third Party - person other than the insured or insurer who has incurred losses or is entitled to receive payment due to acts or omissions of the insured. Sort. Captive Insurer - an insurance company established by a parent firm for the purpose of insuring the parent's exposures. Aircraft - coverage for aircraft (hull) and their contents; aircraft owners' and aircraft manufacturers liability to passengers, airports and other third parties. Retrocession - the portion of risk that a reinsurance company cedes or amount of insurance the company chooses not to retain. Moral Hazard - personality characteristics that increase probability of losses. Named Peril Coverage - insurance for losses explicitly defined in the policy contract. Statutory Accounting - method of accounting standards and principles used by state regulatory authorities to measure the financial condition of regulated companies and other insurance enterprises. Underinsured Motorist Coverage - policy option for bodily injury or property losses caused by a motorist with coverage insufficient to cover total dollar amount of losses. Creditor-Placed Home - single interest or dual interest credit insurance purchased unilaterally by the creditor, who is the named insured, subsequent to the date of the credit transaction, providing coverage against loss to property that would either impair a creditor's interest or adversely affect the value of collateral on homes, mobile homes, and other real estate. Coinsurance - A clause contained in most property insurance policies to encourage policy holders to carry a reasonable amount of insurance. The definition of "long-term care insurance" under this Act is designed to allow maximum flexibility in benefit scope, intensity and level, while assuring that the purchaser's reasonable expectations for a long-term care insurance policy are met. Short-term Disability - a company standard defining a period of time employees are eligible for short-term disability coverage, typically for 2 years or less. The contract provides for the initiation of payments at some designated future date. 2. What Is an Accelerated Death Benefit? policy loan interest rate is that which is permitted under the NAIC Model Policy Loan . Browse our timeline to learn how we support insurance regulators in their mission to protect consumers and ensure fair and healthy insurance markets. Casualty Insurance - a form of liability insurance providing coverage for negligent acts and omissions such as workers compensation, errors and omissions, fidelity, crime, glass, boiler, and various malpractice coverages. A loss exceeding a certain size triggers a reduction in the bond value or a change in the bond structure as loss payments are paid out of bond funds. Mortality Table - chart that shows the death rates of a particular population at each age displayed as the number of deaths per thousand. Crop-Hail Insurance - coverage for crop damage due to hail, fire or lightning. Reinsurance - a transaction between a primary insurer and another licensed (re) insurer where the reinsurer agrees to cover all or part of the losses and/or loss adjustment expenses of the primary insurer. Frequently includes fire, allied lines, various other coverages (e.g., difference in conditions) and liability coverage. Typically, you must. Life Endowment - insurance that pays the same benefit amount should the insured die during the term of the contract, or if the insured survives to the end of the specified coverage term or age. Suggest. Whole Life - life insurance that may be kept in force for a person's entire life and that pays a benefit upon the person's death, whenever that may be. This line also includes instrumentalities of transportation and communication, such as bridges, tunnels, piers, wharves, docks, pipelines, power and phone lines, and radio and television towers. It saw its start in the 1980s to help AIDs patients with their health care costs. Calculated on the basis of original cost adjusted, as appropriate, for accrual of discount or amortization of premium and for depreciation. Subrogation - situation where an insurer, on behalf of the insured, has a legal right to bring a liability suit against a third party who caused losses to the insured. The interval may vary, however the annuity payouts must begin within 13 months. Comprehensive (Hospital and Medical) - line of business providing for medical coverages; includes hospital, surgical, major medical coverages; does not include Medicare Supplement, administrative services (ASC) contracts, administrative services only (ASO) contracts, federal employees health benefit plans (FEHBP), medical only programs, Medicare and Medicaid programs, vision only and dental only business. Quoted market prices in active markets are the best evidence of fair value and shall be used as the basis for the measurement, if available. Flood - coverage protecting the insured against loss or damage to real or personal property from flood. Gramm-Leach Bliley Act (GLBA) - act, repealing Glass-Steagal Act of 1933, allows consolidation of commercial banks, investment institutions and insurance companies. This page provides a glossary of insurance terms and definitions that are commonly used in the insurance business. The beneficiary may use providers outside the provider network. International - includes all business transacted outside the U.S. and its territories and possessions where the appropriate line of business is not determinable. Arbitration - a binding dispute resolution tactic whereby a conciliator with no interest in the outcome intercedes. Federally Reinsured Crop - crop insurance coverage that is either wholly or in part reinsured by the Federal Crop Insurance Corporation (FCIC) under the Standard Reinsurance Agreement (SRA). Internet Liability Insurance/Cyber Insurance - coverage for cyber commerce including copyright infringement, libel, and violation of privacy. Difference In Conditions (DIC) Insurance - special form of open-peril coverage written in conjunction with basic fire coverage and designed to provide protection against losses not reimbursed under the standard fire forms. The amount being accelerated wishes reduce the death benefit on the contract dollar for dollar. The policy covers risks not explicitly excluded in the policy contract. Adjuster - a person who investigates claims and recommends settlement options based on estimates of damage and insurance policies held. Statutory rules also govern how insurers should establish reserves for invested assets and claims and the conditions under which they can claim credit for reinsurance ceded. Fixed Deferred Annuities - a specific type of deferred annuity where the account value increases based on the relatively stable performance of an annuity provider's general account investments and often subject to a guaranteed minimum return in each year. These securities must also be grouped in one of the top two ratings as determined by an accredited credit rating agency, and usually pay periodic payments that are similar to coupon payments. Surplus Line - specialized property or liability coverage available via nonadmitted insurers where coverage is not available through an admitted insurer, licensed to sell that particular coverage in the state. Mortgage Guaranty - insurance that indemnifies a lender for loss upon foreclosure if a borrower fails to meet required mortgage payments. Group Annuities Unallocated - annuity contracts or portions thereof where the Insurer purchases an annuity for the retirees. Joint-Life Annuity - an annuity contract that ceases upon the death of the first of two or more annuitants. Intermediary - a person, corporation or other business entity (not licensed as a medical provider) that arranges, by contracts with physicians and other licensed medical providers, to deliver health services for a health insurer and its enrollees via a separate contract between the intermediary and the insurer. The formula reflects market value adjustments. Legal principle limiting compensation for damages be equivalent to the losses incurred. Hazard - circumstance which tends to increase the probability or severity of a loss. Balance Sheet - accounting statement showing the financial condition of a company at a particular date. Catastrophe Bonds - Bonds issued by an insurance company with funding tied to the company's losses from disasters, or acts of God. Statement Value - the Statutory Accounting Principle book value reduced by any valuation allowance and non-admitted adjustment applied to an individual investment or a similar group of investments, e.g., bonds, mortgage loans, common stock. Fire - coverage protecting the insured against the loss to real or personal property from damage caused by the peril of fire or lightning, including business interruption, loss of rents, etc. We intend that payments we make under the Accelerated Death Benefit options will receive favorable tax treatment; Accelerated Death Benefits, Viatical Settlements, and Viatical Loans Nuclear Energy Liability - coverage for bodily injury and property damage liability resulting from the nuclear energy material (whether or not radioactive) on the insured business's premises or in transit. Construction and Alteration Liability - covering the liability of an insured to persons who have incurred bodily injury or property damage from alterations involving demolition, new construction or change in size of a structure on the insured's premises. Kidnap/Ransom Insurance - coverage for ransom or extortion costs and related expenses. Warrant - an agreement that gives the holder the right to purchase an underlying financial instrument at a given price and time or at a series of prices and times according to a schedule or warrant agreement. The policy does not include coverage provided under comprehensive/major medical policies, Medicare Advantage, or for accelerated heath benefit-type products. Directors & Officers Liability - liability coverage protecting directors or officers of a corporation from liability arising out of the performance of their professional duties on behalf of the corporation. Individual Credit Credit Disability - makes monthly loan/credit transaction payments to the creditor upon the disablement of an insured debtor. Commercial Mortgage-Backed Securities - a type of mortgage-backed security that is secured by the loan on a commercial property. Comprehensive Personal Liability - comprehensive liability coverage for exposures arising out of the residence premises and activities of individuals and family members. Industrial Life - Industrial life insurance, also called "debit" insurance, is insurance under which premiums are paid monthly or more often, the face amount of the policy does not exceed a stated amount, and the words "industrial policy" are printed in prominent type on the face of the policy. Broker - an individual who receives commissions from the sale and service of insurance policies. These individuals work on behalf of the customer and are not restricted to selling policies for a specific company but commissions are paid by the company with which the sale was made. Loss Frequency - incidence of claims on a policy during a premium period. Crop - coverage protecting the insured against loss or damage to crops from a variety of perils, including but not limited to fire, lightening, loss of revenue, tornado, windstorm, hail, flood, rain, or damage by insects. The accelerated death benefit rider is usually included in your policy at no extra cost to you. Direct Written Premium - total premiums received by an insurance company without any adjustments for the ceding of any portion of these premiums to the Reinsurer. Medicare - a state assistance program, passed under Title XVIII of the Social Security Amendments of 1965, to provide hospital and medical expense insurance to those over 65 years of age. Independent Adjuster - freelance contractor paid a fee for adjusting losses on behalf of companies. Includes but is not limited to coverage for all obligations and liabilities incurred by a service contract provider, mechanical breakdown insurance and service contracts written by insurers. Mobile Homes - Homeowners - homeowners insurance sold to owners occupying the described mobile home. Claims Adjustment Expenses - costs expected to be incurred in connection with the adjustment and recording of accident and health, auto medical and workers' compensation claims. Occurrence - an accident , including injurious exposure to conditions, which results, during the policy period in bodily injury or property damage neither expected or intended from the standpoint of the insured. Public Adjuster - independent claims adjuster representing policyholders instead of insurance companies. What does NAIC stand for? - Abbreviations.com PDF MEMORANDUM TO: IIPRC Management Committee Standards for - Insurance Compact Include under this type of insurance multi-peril policies (other than farmowners, homeowners and automobile policies) that include coverage for liability other than auto. How Does an Accelerated Death Benefit Work? The Health Plans involved will often designate these contracted providers as "preferred" and will provide an incentive, usually in the form of lower deductibles or co-payments, to encourage covered individuals to use these providers. An asset has three essential characteristics: It embodies a probable future benefit that involves a capacity, singly or in combination with other assets, to contribute directly or indirectly to future net cash inflows; A particular entity can obtain the benefit and control others' access to it; and The transaction or other event-giving rise to the entity's right to or control of the benefit has already occurred. Investments with original maturities of three months or less qualify under this definition. Loss - physical damage to property or bodily injury, Including loss of use or loss of income. If the coverage is as a rider, deductibles or out-of-pocket limits must be set separately from the medical coverage. For example, let's say Jane Doe bought a life insurance policy with an accelerated death benefit. Mutual Insurance Holding Company - a company organized as a mutual and owning a capital stock insurer or insurers for the benefit of pooling risk for many people, typically those in the same industry. Excluded are losses resulting from fire, explosion, flood or tidal wave following the covered event. PDF LONG-TERM CARE INSURANCE MODEL ACT Table of Contents - NAIC Living Benefit or Accelerated Death Benefit Rider Options | SOA Whole Life Insurance - life insurance that may be kept in force for the duration of a person's life and pays a benefit upon the person's death. Specified Disease Coverage - coverage that provides primarily pre-determined benefits for expenses of the care of cancer and/or other specified diseases. Risk Retention Group - group-owned insurer organized for the purpose of assuming and spreading the liability risks to its members. Group Annuities Immediate Non-Variable and Variable - an annuity contract that provides an accumulation based on both (1) funds that accumulate based on a guaranteed crediting interest rates or additional interest rate applied to designated considerations, and (2) funds where the accumulation vary in accordance with the rate of return of the underlying investment portfolio selected by the policyholder. Model Laws - National Association of Insurance Commissioners Typically, accelerated benefits are given for people with medical disabilities, for those who need a permanent residence in a retirement home, and for short-term and expensive illnesses. Agent - an individual who sells, services, or negotiates insurance policies either on behalf of a company or independently. Ac-celerated Death Benefits do not and are not intended to qualify as long-term care insurance. Estimates are established to book these claims. Foreign jurisdiction - a jurisdiction outside of the United States, Canada or any province or political subdivision of the foregoing. Mutual Insurance Company - a privately held insurer owned by its policyholders, operated as a non-profit that may or may not be incorporated. New terms will be added to the glossary over time. Preferred Provider Organization (PPO) - arrangement, insured or uninsured, where contracts are established by Health Plan Companies (typically, commercial insurers, and, in some circumstances, by self-insured employers) with health care providers. Medigap - supplementary private health insurance products to Medicare insurance benefits. Disability Income - a policy designed to compensate insured individuals for a portion of the income they lose because of a disabling injury or illness. Renters Insurance - liability coverage for contents within a renter's residence. (Non-business liability exposure protection for individuals.). Also include short-term care policies that provide coverage for less than one year for medical and other services provided in a setting other than an acute care unit of the hospital. Dental Only - line of business providing dental only coverage; coverage can be on a stand-alone basis or as a rider to a medical policy. PDF Terminal Illness, Chronic Illness and Critical Illness Accelerated Owner Occupied - homeowners insurance sold to owners occupying the described property. NFIP - National Flood Insurance Program - flood insurance and floodplain management for personal and business property administered under the National Flood Act of 1968. Liquor Liability - coverage for the liability of an entity involved in the retail or wholesale sales of alcoholic beverages, or the serving of alcoholic beverages, to persons who have incurred bodily injury or property damage arising from an intoxicated person.
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