Insurance

Front 1

actual cash value

Back 1

the cost less depreciation but can have different definitions depending on the policy

Front 2

adjuster

Back 2

person who assesses the facts of the claim and the extent of the coverage

Front 3

aggregate limit

Back 3

the firm pays all the losses for the year until the deductible limit is reached

Front 4

bailee

Back 4

someone who has temporary possession of property that belongs to another for storage, repair or servicing

Front 5

broker

Back 5

person that legally represents the insured and sells for more than one company as an independent agent

Front 6

burglary

Back 6

theft using force to gain entry or exit

Front 7

contribution

Back 7

deposits to a life insurance account

Front 8

direct loss

Back 8

damage you can see or touch

Front 9

estoppel

Back 9

a legal doctrine which precludes a person from denying the truth of a former statement made by him which caused certain logical conclusions to be drawn

Front 10

hazard

Back 10

condition which may cause a peril to occur (physical or moral)

Front 11

forfeiture

Back 11

the loss a right as a result of the nonperformance of some obligation or condition

Front 12

insurance

Back 12

probability of loss

Front 13

peril

Back 13

an event that may cause loss to occur - specific

Front 14

personal injury

Back 14

the false arrest, detention, imprisonment, malicious prosecution, libel, slander, defamation of character, violation of the right of privacy, unlawful entry, or eviction

Front 15

prescription

Back 15

the time after which a claim may not be brought

Front 16

proximate cause

Back 16

direct relationship exiting between the act and the damages - there must be an unbroken chain of events between thenegligent aact and the infliction of damages

Front 17

punitive/exemplary damages

Back 17

damages awarded to punish and to act as a deterrent

Front 18

pure risk

Back 18

only chance of loss (never profit)

Front 19

reinsure/reinsurance

Back 19

Proportional: % of risk (and premium) transferred

Non-proportional: insurer pays all of the losses up to an agreed amount called the PRIORITY. Reinsurer pays the rest

Treaty Reinsurance: an agreement to automatically provide reinsurance for every risk that falls within a certain category (without having to do the paperwork for each one)

Facultative Reinsurance: reinsurance placed on an individual basis (more flexible/time-consuming)

Front 20

retrocession

Back 20

when a re-insurer cedes part of its business to another re-insurer, that is a retrocession

Front 21

retrocessionaire

Back 21

second reinsurer is known as a retrocessionaire

Front 22

risk

Back 22

possibility of loss

Front 23

scienti non fit injuria

Back 23

implies knowledge that the nature of a thing is dangerous (exotic pets)

"to a knowing person, injury is not done"

scienter is a tort action that arises when a dangerous animal attacks someone and they sue

Front 24

special damages

Back 24

awarded for losses that can be determined and documented

Front 25

speculative risk

Back 25

risk can have a loss, no change, or a gain

Front 26

subrogation

Back 26

insurer will pay the insured and is entitled to recover the loss from a negligent third party

Front 27

surety

Back 27

a surety bond that provides monetary compensation if the bonded party fails to perform certain acts

Front 28

third party release

Back 28

discharges the insured for an amount stated in the release from all further liability in regard to a particular incident

Front 29

volenti non fit injuria

Back 29

volens - defence - person who is injured ought to have known better

voluntary assumption of risk

"to a willing person, injury is not done"

Front 30

waiver

Back 30

the voluntary relinquishment of a known right

Front 31

49% rule

Back 31

the victim must be 49% or less at fault to collect for a negligent act

Front 32

50% rule

Back 32

the victim can collect only if the victim's negligence is not greater than the negligence of the other party

Front 33

absolute liability

Back 33

one is liable even if there was no negligence

Front 34

accelerated death benefit

Back 34

living benefits rider that allows the insured who are terminally ill or who suffer from certain catastrophic diseases to collect all or part of their life insurance benefits before they die

Front 35

accident

Back 35

an event that causes a loss and is sudden, unexpected and unintended

Front 36

accident benefits

Back 36

benefits for insured persons if they are injured or killed in an auto accident

Front 37

accidental death and dismemberment

Back 37

used to be known as double indemnity. life insurance policy pays double if insured dies from an accident instead of from illness

Front 38

account value

Back 38

the total of all investment accounts in a universal life policy, including investment income minus deductions and expenses

Front 39

accumulating reserve

Back 39

the name in the "income tax act" for the legal reserve or policy reserve that accumulated to hold the death benefit and cash surrender value

Front 40

activities of daily living

Back 40

the activities that must be impaired to collect on a long term care policy

Front 41

actual cash value

Back 41

cost less depreciation, but can have different definitions depending on the polity

Front 42

add-on plan

Back 42

auto plan in which the benefits are paid on a nofault basis and the injured person also has the right to sue. this is the case in NB

Front 43

adhesion contract

Back 43

contract in which the applicant must accept the entire contract including terms and conditions and cannot bargain

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Front 44

adjusted cost basis

Back 44

cumulative premiums less cumulative dividends less net cost of pure insurance (NCPI)
P(death) x net amount at risk (death benefit - accumulating fund)

Front 45

additional living expenses

Back 45

expenses incurred while repairs are made to one's damaged home

Front 46

adjuster

Back 46

the person that assesses the facts of the claim and the extent of the coverage

Front 47

adjusting expenses

Back 47

costs of settling a claim, the benefits of the policy

Front 48

adjusting losses

Back 48

costs of settling a claim, the benefits of the policy

Front 49

adjustment bureau

Back 49

adjusting organization and is often used for catastrophic losses, such as those from a tornado

Front 50

adverse selection

Back 50

the tendency of persons with a higher-than-average chance of loss to seek insurance at standard (average) rates, which if not controlled by underwriting, results in higher-than-expected loss levels

Front 51

advertising injuru

Back 51

this coverage deals with slander, libel, persecution, defamation of character, false arrest, detention or imprisonment, malicious prosecution, violation of the right of privacy, and unlawful entry or eviction

Front 52

age of reason

Back 52

age 7

Front 53

agency agreement

Back 53

agreement between the agent and the principal (insurer) outlining the agent's authority

Front 54

agency relationship

Back 54

is one in which the agent acts on behalf of the principal

Front 55

agent

Back 55

the person that legally represents the insurer and has the authority to act on behalf of one insurance company

Front 56

aggregate deductible

Back 56

the firm pays all the losses for the year until the deductible limit is reached

Front 57

aleatory contract

Back 57

contract where the dollar amounts exchanged may not be equal but depend on an uncertain event

Front 58

all perils

Back 58

combination of collision and comprehensive having a common deductible

Front 59

all risk coverage

Back 59

coverage that covers everything unless it is specifically excluded

Front 60

amount at risk

Back 60

for the insurer, this is the difference between the face value of a whole life policy and the cash surrender value at any oint in time

Front 61

apparent authority

Back 61

if a third party believes an agent has certain authority, the principal is bound by the agent's actions

Front 62

artificial person

Back 62

a legal entity such as corporation having legal rights and duties

Front 63

assignment

Back 63

this transfers the benefits to another party

Front 64

attachment bond

Back 64

a surety bond that guarantees that if the court rule-s against the plaintive who has attached the property of the denfe3ndantin a lawsuit, the defendant will be reimbursed for damages as a result of having the property attached

Front 65

attained-age method

Back 65

this uses the age of the life insured at the beginning of the policy year

Front 66

attractive nuisance

Back 66

condition that can attract and injure children. children are considered to be licencees, not trespassers because they cannot recognize danger. the occupant must keep the premises safe and take ordinary care to protect the children fromharm

Front 67

auctioneers bond

Back 67

a surety bond that guarantees the accurate acounting of sales proceeds by the auctioneer

Front 68

automatic premium loan

Back 68

this automatically pays the premiums in default by borrowing against the CSV as a policy loan

Front 69

average

Back 69

a partial loss

Front 70

B/U ratio

Back 70

the ratio of regular beneficiaries (people receiving regular benefits as opposed to people receiving maternity or parental benefits etc) to unemployed

Front 71

bail bond

Back 71

bond which is forfeited if a person fails to appear in court

Front 72

bailee

Back 72

someone who has temporary possession of property that belongs to another for storage, repair or servicing

Front 73

bargaining contract

Back 73

contract that the applicant can make counter proposals or ask for changes

Front 74

base plan

Back 74

a plan that outlines the health care coverage for a province or territory

Front 75

basic policy

Back 75

the starting point, the minimum coverage

Front 76

beneficiary

Back 76

the person, people, corporation, trust or charity who receives the death benefit in a life insurance contract and becomes the policyholder when the life insured dies

Front 77

beneficiary designation

Back 77

beneficiary designated or named in the insurance contract

Front 78

bid bond

Back 78

a surety bond in which the owner (obligee) is guaranteed that the party awarded a bid on a project will sign a contract and furnish a performance bond

Front 79

bilateral contract

Back 79

contract in which each party makes a legally enforceable promise

Front 80

blanket insurance

Back 80

insurance that provides coverage under a single limit for two or more items or locations

Front 81

block policy

Back 81

policy that cover loss to the property of a merchant, wholesaler or manufacturer including property of others in their care, custody or control, on consignment or sold but not delivered

Front 82

boiler and machinery

Back 82

insurance that protects against the physical damage and financial loss that results from the sudden and accidental breakdown of boilers and other machinery and equiment

Front 83

bonded

Back 83

refers to a person's status when they are covered by employee theft insurance

Front 84

breach of contract

Back 84

this is wrongful nonperformance, meaning one party to a contract fails to perform an obligation which is part of the contract

Front 85

breach of warranty

Back 85

this means the product does not do what it is intended to do

Front 86

broad policy

Back 86

a policy that provides "all-risks" coverage on the building and the "named perils" coverage on the contents

Front 87

builders risk

Back 87

risk that covers buildings under construction

Front 88

bundled

Back 88

this refers to the elements of a life insurance policy that are connected to each other

Front 89

burglary

Back 89

theft using force to gain entry or exit

Front 90

business floater

Back 90

policy that provides broad and comprehensive protection on property that is frequently moved from one location to another

Front 91

business income and extra expenses

Back 91

commercial insurance that covers loss of income and added expenses incurred to continue operations after a loss

Front 92

business interruption

Back 92

insurance covers net income before taxes plus continuing expenses

Front 93

cafeteria plans

Back 93

group health plans where employees are allocated points and can choose the coverage on which they want to spend their points

Front 94

binding authority

Back 94

from agency. pre-approved amount of authority to provide certain levels of coverage immediately without approval from underwriter

Front 95

direct writer

Back 95

employee of insurer, usually for non-complex types of insurance

Front 96

IBNR

Back 96

claims that have occurred but not been reported yet. insurers know that they always have outstanding claims not yet reported and have a fund for these

Front 97

intermediary

Back 97

broker - independent

agent - independent

direct writer - employee

Front 98

outstanding loss reserve

Back 98

money available for immediate indemnification of loss

Front 99

rated policy

Back 99

life insurance policy for higher than average risk individuals

Front 100

standard rates

Back 100

rate for policy holder with average underwriting standards

Front 101

underwriter

Back 101

evaluates the risk of an insured. selects and classifies insured

Front 102

unearned premium reserve

Back 102

remainder of premiums from insured that can be paid out if policy cancelled.