Abide the Issue
A treaty provision stating that the reinsurer will agree to pay claims decisions made by the ceding company
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In some life insurance policies, benefits available before death, in such events as long-term, catastrophic or terminal illness; life insurance company's response to viaticals.
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Accident and Health Insurance
Insurance against loss by sickness or bodily injury. The generic form for those forms of insurance that provide lump sum or periodic payments in the event of loss occasioned by bodily injury, sickness or disease and medical expense.
Synonyms: A&H
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Accidental Death Benefit
A life insurance policy provision that calls for an additional payment, usually equal to the face amount of the insurance, in the event of accidental death. Also called double indemnity.
Synonyms: AADB, ADB
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Account Value
The accumulated gross premiums with interest, less loads and other deductions, in a universal life policy
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Accrual
An accounting adjustment to assets or liabilities for an event which will affect cash in the future
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Acquisition Cost
An expense that results directly from the sale, underwriting, and issue of a new policy
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Active Life Reserve
An amount set aside to pay future claims for non-cancelable and guaranteed renewable policies and for DWP benefits; generally held only for those contracts not currently on claim status
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A specialist in the mathematics of risk, especially as it relates to insurance calculations such as premiums, reserves, dividends, insurance and annuity rates.
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Adjustable Life Insurance
A form of Whole Life which permits the policyowner to make frequent changes in the amount of premium and/or benefit
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Administrative Services Only
A contract under which an insurer or other organization, such as a third-party administrator, agrees to provide administrative services for an employer that is self-funding an insurance benefit plan rather than purchasing group insurance
Synonyms: ASO
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Admitted Reinsurance
Reinsurance provided by a state-authorized reinsurer
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A situation where one party in a transaction has information that the other party doesn't have about some aspect of the transaction; a tendency for those in dangerous jobs or high risk lifestyles to get life insurance; the reason that many insurance companies rather sell to a consumer than have a consumer come to buy insurance; people with poor health are more apt to apply for or continue insurance than those with average or better-than-average health expectations
Synonyms: Anti-selection
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Age Basis
The method used to calculate the insured's issue age, either last birthday (ALB) or age nearest birthday (ANB)
Synonyms: ALB, ANB
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Age Last Birthday
A method used to calculate the insured's issue age; refers to the insured's current age as of his last birthday
Synonyms: ALB
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Age Limits
The range of ages at which a policy may be sold
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Age Nearest Birthday
A method used to calculate the insured's issue age; refers to age of the insured on his closest (last or next) birthday
Synonyms: ANB
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Agents' Credit Balances
Funds, other than commissions, owed by the company to an agent
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Agents' Debit Balances
Funds owed to the company by an agent of the company as a result of a loan or an advance against commissions
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Aggregate Limit
The maximum amount payable under reinsurance treaties that have an overall maximum loss limitation, such as stop loss
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Alien Reinsurer
A company chartered outside the United States that provides reinsurance for companies in the United States
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Allowance
Amount paid by the reinsurer to the ceding company to cover expenses, such as underwriting and commissions; usually a formula, such as a percentage of gross premium, is used rather than gross expenses
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Alphabet Split
A method of allocating shares of automatic reinsurance among several reinsurers; using this method, each reinsurer is assigned a part of the alphabet and the reinsurance is ceded based on the first letter of the insured's last name
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A line of business at Transamerica Reinsurance which develops products and services related to proprietary, alternative underwriting programs
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Alternative Minimum Tax
Part of the federal income tax system in the United States; the AMT system uses a different set of rules for determining taxable income and allowable deductions
Synonyms: AMT
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AM Best
Company that provides insurance company ratings data
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Amount at Risk
Difference between the face value of a permanent life insurance policy and its accrued cash value; the pure cost of protection is based on this difference; see also Net Amount at Risk
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Annual Renewable Term
A form of coverage in both life insurance and reinsurance; term life insurance that may be renewed annually without evidence of insurability until some stated age; a form of life reinsurance in which the reinsurer assumes only the mortality risk, which is usually calculated as the face amount of reinsurance minus the terminal reserve
Synonyms: ART, YRT
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A financial contract between an insurer and a customer under which the insurer promises to make a series of periodic benefit payments to a named individual in exchange for the contract owner’s payment of a premium or series of premiums to the insurer; see also Structured Solutions
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Annuity Consideration
The amount paid to the insurance company to purchase an annuity
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The reason why many insurance companies would rather go to you than have you come to them; people with poor health are more apt to apply for or continue insurance than those with average or better-than-average health expectations
Synonyms: Adverse Selection
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Anticipated Mortality
Assumption about the mortality to be experienced in the future on a group of insured lives
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Appointed Actuary
An actuary who has been duly appointed by an insurer’s board of directors to render an official opinion as to the insurer’s financial condition; any individual who is appointed or retained in accordance with the requirements set forth in the Actuarial Opinion and Memorandum Regulation
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Attempting to profit by exploiting price differences of identical or similar financial instruments, on different markets or in different forms
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The process by which the parties to a dispute submit their differences to the judgment of an impartial person or group appointed by mutual consent or statutory provision
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Arbitration Clause
A treaty provision that allows for disputes to be resolved by three arbiters; one arbiter is chosen by each company, and these two arbiters jointly select the third
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Asset Segmentation
The process of allocating investment income by assigning specific instruments to each line of business or coverage (as opposed to proportionate shares of all company assets).
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Asset Valuation Reserve
An investment reserve established to provide for default risk on fixed income assets and market value fluctuation on real estate and other equity type investments
Synonyms: AVR
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A risk management technique designed to earn an adequate return while maintaining a comfortable surplus of assets beyond liabilities. Takes into consideration interest rates, earning power and degree of willingness to take on debt.
Synonyms: ALM, surplus management
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Assume
To accept or take over a risk from a ceding company
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Assumed Interest Rate
The rate of interest, or growth rate, selected by an insurance company; AIR is provided to determine the value of an annuity contract and, therefore, the periodic income payment which can be provided to the annuitant; the minimum interest rate that must be earned on investments in the policyholder's cash-value account in order to cover the insurance company's costs and expected profit margin
Synonyms: AIR
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Assumption Reinsurance
A form of reinsurance used to completely transfer a block of business from one company to another; the policyholder is given an assumption certificate to show that the reinsurer now has the rights and obligations previously held by the ceding company
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Reinsurance accepted by the reinsurer because it meets the rules and limits of the treaty; the reinsurer depends on the underwriting judgement of the ceding company
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Actuarial Guideline 38, a regulation introduced to address reserve requirements for certain universal life insurance policies with implicit guarantees
Synonyms: Actuarial Guideline 38
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