[I001]
IASA--Insurance Accounting and Systems Association
An international organization to promote the study, research and development of modern theory, practice and procedure as applied to insurance accounting and statistics. Headquarters: Durham, NC.
Content[I002]
IBNR--incurred but not reported
The liability for future payments on losses which have already occurred but have not yet been reported to the insurer. This definition may be extended to include expected future development on claims already reported.
Truck Cargo Policies
[I003]
I.C.C. Endorsement--Interstate Commerce Endorsement To Motor Truck Cargo Policies
In inland marine insurance, this is the provision which broadens the policy coverage to conform to Interstate Commerce Commission requirements with respect to a carrier's liability for customers' goods.
[I175]
ICMIF
(See International Cooperative and Mutual Insurance Federation.)
[I004]
ICPI--Insurance Crime Prevention Institute
Serves casualty insurers for the investigation of fraudulent insurance claims other than for accident and health or workers compensation, and provides a deterrent to such losses. Headquarters: Westport, CT.
[I154]
Identity fraud
A generic reference to any crime involving the unauthorized use of key pieces of personal information, such as Social Security or driver's license numbers, in order to impersonate someone else. The information can be used to obtain credit, merchandise and services in the name of the victim, or to provide the thief with false credentials. The stolen information may be used either to open new accounts or to access current accounts.
[I155]
Identity fraud expense insurance
A person who has been victimized by identity theft faces the daunting task of correcting their account information, credit history, and initiating extensive communication with a multitude of lenders, businesses and legal authorities. ID fraud expense insurance helps to cover some of the related expenses, particularly postage and phone charges.
IDL
(See Independent Director Liability.)
[I163]
IDM
(See integrated disability management.)
[I168]
IDMA
(See Insurance Data Management Association.)
IGIE
(See Institute for Global Insurance Education.)
[I005]
IIA--Insurance Institute of America, Inc.
An educational organization which sets standards and gives examinations for diplomas or fellowships in general insurance, loss adjusting, underwriting, management and risk management. Headquarters: Malvern, PA.
[I006]
IIAA--Independent Insurance Agents of America
Formerly the National Association of Insurance Agents, a large trade association whose purpose is to protect the business interests of its members, who are also members of state associations. Headquarters: Alexandria, VA (Washington, DC in 1988).
IIPRC
(See Interstate Insurance Product Regulation Commission.)
[I176]
IIS
(See International Insurance Society.)
ILW
(See industry loss warranty.)
[I169]
IMB
(See International Maritime Bureau.)
[I007]
IMCA--Insurance Marketing Communications Association
A trade association of those in charge of insurance company advertising, marketing and public relations functions. Formerly known as the Insurance Advertising Conference.
[I008]
Immature policies
Liability policies that are written on a claims-made basis are not considered to be mature until they have been in effect for five uninterrupted years as claims-made. Prior to that, claims are considered not to be fully developed. The premiums for these policies are given a credit that decreases yearly until it disappears after five years.
[I009]
Immediate annuity
A type of annuity policy that begins making benefit payments as soon as the last premium payment has been made.
[I010]
Impaired capital
The capital of an insurance company is said to be impaired if its liabilities, subtracted from its assets, leave less than the stated amount of capital. Most states have statutes outlining procedures to be taken by the insurance superintendent or commissioner in the event of such impairment. The word "impaired" has specific statutory meaning in state laws which may vary from state to state. Relevant state laws should be checked for meaning and effect.
[I011]
Impaired property
Property is considered to be impaired when it has not been physically damaged, but either cannot be used for its intended purpose or has lost monetary value because it contains a defective product or the work performed on it is defective or inadequate, or because the insured has not fulfilled a contractual obligation.
[I012]
Impaired risk
In life and health insurance, when an applicant has a substandard physical condition or a hazardous occupation or hobby, he/she is an impaired risk. Many insurers avoid such risks, while others specialize in them.
[I013]
Impairment exclusion rider
An endorsement or rider added to a health insurance contract; this rider excludes losses that occur because of pre-existing conditions.
[I014]
Implied authority
Specific authority is granted an agent or representative by contractual agreement. Other types of authority, not specifically mentioned by contract but assumed or implied by the nature of the relationship, are presumed to be given to an agent if that authority is necessary to perform the duties or responsibilities otherwise assigned to the agent or representative.
[I015]
Implied warranty
An indirect expression or inference, not in writing, by the policyholder that certain conditions exist or will be met; for example, that a building is not on fire when insured, or that a vessel is seaworthy.
[I016]
Improvements and betterments
Additions made to real estate enhancing its value and amounting to more than mere repairs or replacement of waste. When made by a tenant, such additions are normally included in the tenant's own property insurance.
(See betterments.)
[I156]
Imputed negligence
Refers to a situation in which the responsibility for loss or damage is transferred from one party to another, such as a child to a parent or from a worker to his employer.
[I017]
In-force business
The total premium amount of a book of business that is active and in effect at any specific period in time.
[I018]
In-force premiums
The original premiums paid on all policies not yet expired, as distinguished from unearned premiums.
[I019]
In kind
Replacement of damaged, destroyed, or lost property with other property instead of cash.
[I020]
In motion
An aviation term that is used to express when an aircraft is in flight or under its own power or momentum.
[I021]
[I021]
In trust policy
A type of inland marine policy which provides protection for the covered property, no matter where located or in whose care, custody or control.
A type of inland marine policy which provides protection for the covered property, no matter where located or in whose care, custody or control.
[I022]
Inactive risks
A term used to express a risk that is not presently operating or exposed to the hazards and potential for covered losses.
[I023]
Incendiary
1) The person who deliberately sets fire to a property.
2) A destructive fire intentionally set.
[I024]
Inchmaree clause
A clause used in ocean marine policies to identify additional named perils beyond the basic marine perils. In the more recent hull insurance policies, the clause is now identified as the "additional perils" clause. The original clause grew out of a lawsuit brought in 1887 by the owners of a ship named "Inchmaree."
[I143]
Incidental contracts
Contracts that are considered necessary to conducting business and are covered as part of premises-operations liability coverage.
[I025]
Incidental medical malpractice liability
This coverage is for operations that have a medical professional exposure which is incidental to but is not the major function of their business. The coverage responds to injury arising out of either providing or failing to provide medical services. A school nurse is an example of a qualifying incidental medical malpractice liability situation.
[I134]
Incidents of ownership
Life insurance contains the following incidents of ownership. (A) The right to change the beneficiary (unless irrevocable); (B) the ability to use the policy as collateral in a loan; (C) the right to assign the policy to another; (D) the right to surrender the policy or cancel it; and (E) the right to obtain a loan against cash value (if there is any).
[I026]
Incontestable clause
A clause in many life and health policies that sets a time period (two years is common) in the contract during which the insurer has to investigate and determine any grounds for voiding or contesting coverage because of facts or material provided by the insured in the application. Once the policy has been in effect past the stated period, the insurer no longer has the right to deny or contest any claim or loss, or void coverage based on the statements or material facts from the application.
[I027]
Increase in hazard
The standard fire insurance policy is suspended from liability while the hazard in a risk has been increased beyond what was contemplated at the time the policy was written. For example, if a dwelling house, insured as such, should be occupied for manufacturing purposes without getting consent from the insurer for such increase in hazard, the company would not have to pay a loss as long as the manufacturing condition existed.
[I028]
Increased annuity
A type of annuity where the payments made by the insured increase at a set rate during the life of the policy.
[I029]
Increased limits table
With respect to liability insurance rates, most rates or loss costs are developed based on a standard limit of insurance purchased by the insured (most often $25,000). The increased limits table provides information on the factors that allow an increase in the base rate when higher limits are requested. Increased limits must be actuarially sound with credible data and statistics to support those factors, as are the rates that are developed.
[I135]
Increasing term insurance
A term insurance policy where the death benefit increases during the term of the policy. The increase may be straight line, on a stair-step basis, or increase according to an index such as the CPI (consumer price index) or other inflationary measure.
[I030]
Incurred but not reported (IBNR)
The liability for future payments on losses which have already occurred but have not yet been reported to the insurer. This definition may be extended to include expected future development on claims already reported.
(See loss reserve.)
[I031]
Incurred expense
A cost of administering insurance which has happened, whether or not paid.
[I136]
Incurred loss ratio
Incurred losses divided by earned premiums.
[I032]
Incurred losses
1) Events which have happened and which will cause claims to be made to insurers.
2) The total amount shown in an insurer's operating statement as its obligations for policy claims, whether paid or not, during a given period (usually one year). The composition of incurred losses in such a total is derived by the following formula: losses paid during the year, plus loss reserves existing at the end of the year, minus loss reserves existing at the beginning of the year.
(See loss reserve.)
[I033]
Indemnify
To pay for loss suffered or to reimburse.
[I034]
Indemnitor
In surety bonds, a person or company entering into a written agreement with a surety to hold that surety harmless from any loss or expense it may incur on a bond issued on behalf of another.
[I035]
Indemnity
Indemnity is when the person or party suffering a loss is paid or reimbursed for that loss, the purpose being to restore that party to the condition that was present prior to the loss. In a life insurance contract, the payment made to a beneficiary is called indemnity.
[I036]
Indemnity agreement
A contract agreeing to restore an injured party to the condition that was present prior to the occurrence of injury or loss.
[I037]
Indemnity bond
A bond to pay or reimburse an obligee should the principal fail to perform as agreed upon or fail to fulfill the terms of the contract or commitment as named in the bond.
[I038]
Indemnity company
Usually a company which confines its writings to the classes defined as "casualty," as opposed to fire or marine. The term is becoming meaningless in these days when fire companies are writing casualty lines and indemnity or casualty companies are writing fire lines.
[I039]
Independent adjuster
One who adjusts losses on behalf of companies as an independent contractor instead of as an insurer's employee (staff adjuster) or a representative of the policyholder (public adjuster).
[I040]
Independent agency system
The contracting of insurance companies with agents who are independent contractors to effect property-Sliability insurance, issue policies, own the expiration records thereof and, in general, to represent the companies in their communities. Agents may represent more than one company. The system has reached its highest development in the United States; hence, it is often called the "American" agency system.
[I041]
Independent agent
A property-casualty insurance producer who sells insurance as an independent contractor while representing one or more insurers of that agent's choosing on a commission basis, and who owns the expiration records of customers served. The independent status is further illustrated by the selling functions performed, which are not directed by the insurer, as would be the case if the agent were an employee. Those functions include contacting prospective insureds, effecting insurance, issuing policies, collecting premiums (in many or most cases), settling some losses of small amounts, and generally representing the insurers in the agent's community as a part of the American agency system. By contrast, the direct writing insurer directs the selling functions of its agents, known as exclusive agents, and owns the expiration records.
(See American agency system, direct writer, exclusive agent, agency, independent agency system, and insurance agent.)
Independent director liability
This is coverage for an individual member of a public corporation's board of the directors. The typical coverage acts as excess over any other director and officer insurance; in certain circumstances, also provides primary protection.
[I042]
Independent Insurance Agents of America (IIAA)
Formerly the National Association of Insurance Agents, a large trade association whose purpose is to protect the business interests of its members, who are also members of state associations. Headquarters: Alexandria, VA (Washington, DC in 1988).
[I043]
Index clause
A clause in an excess of loss reinsurance agreement which shares the effect of future inflation between the insurer and its reinsurers by adjusting the retention and limits in accordance with the movement of a designated index. Other specific indexes include Consumer Price Index, Cost of Construction Index, etc.
[I044]
Indexed life insurance
A type of whole life insurance policy whose benefit payout is determined by a set index.
[I045]
Indirect damage
Loss resulting from, or as a consequence of an insured direct loss. For example, loss of business income to a firm from direct damage to the firm's premises, loss of business income to a supplier of a firm whose premises are destroyed, or loss of income to a family from death of the family's breadwinner.
(See indirect loss.)
[I046]
Indirect loss
A type of loss that does not result from direct damage of a covered cause of loss or peril but is, instead, a consequence of the direct damage loss. To illustrate, if a restaurant burns to the ground from a fire, that is the direct loss; however, the income lost because the restaurant could not operate is the indirect loss.
(See consequential loss, and indirect damage.)
[I157]
Individual bond
Refers to bonding a particular public official.
[I047]
Individual contract
The opposite of a group policy or contract, the individual contract is a policy covering one specific person and that person's immediate family members.
[I048]
Individual Retirement Account (IRA)
A tax deferred savings plan that has been approved by the federal government for those individuals who are not otherwise covered by an employer's retirement plan. In order to be approved and eligible for deferred tax treatment, strict eligibility criteria are mandated.
[I049]
Individual Risk Premium Modification Rating Plan (IRPM)
A program whereby equitable rates or premiums can be developed for large premium package risks by taking into consideration factors likely to affect future losses and expenses. Expense modification is based on the fact that handling costs for large risks may vary from the average. Risk modification recognizes special characteristics, other than those considered in the determination of the basic rate, which would improve the risk. This flexible rating approach, in effect for casualty insurance for many years, was extended to the remaining property and liability lines in 1966.
[I050]
Industrial health insurance
Health insurance usually written in small amounts, the premium for which is payable in frequent installments (usually weekly or monthly) and collected by an agent known as a debit agent. The payment frequency and collection facilities were designed decades ago to accommodate workers at industrial factories, who were paid weekly. Because of the expense and time involved, this coverage is rarely used.
(See industrial insurance, and industrial life insurance.)
[I051]
Industrial insurance
Insurance (usually life or health insurance) written in small amounts, the premium for which is payable in frequent installments (usually weekly or monthly) and collected by an agent known as a debit agent. The payment frequency and collection facilities were designed decades ago to accommodate workers at industrial factories, who were paid weekly. Because of the expense and time involved, this coverage is rarely used.
(See industrial health insurance, and industrial life insurance.)
Industrial Insured
A commercial operation that has a full-time employee who is responsible for acquiring insurance and risk management services. Typically a company must have more than 25 employees and have insurance premiums that exceed $25,000.
[I052]
Industrial life insurance
Life insurance usually written in small amounts, the premium for which is payable in frequent installments (usually weekly or monthly) and collected by an agent known as a debit agent. The payment frequency and collection facilities were designed decades ago to accommodate workers at industrial factories, who were paid weekly. Because of the expense and time involved, this coverage is rarely used.
(See industrial health insurance, and industrial insurance.)
[I053]
Industrial Risk Insurers
A consortium of major stock property and casualty insurers formed to write large, highly protected risks and to provide fire laboratory facilities and engineering services. The organization was formed in 1975 by the merger of the Factory Insurance Association and the Oil Insurance Association. Headquarters: Hartford, CT.
Industry loss warranty
This is a tool that is used as a method to protect against catastrophic events. Payment of the warranty is made based upon whether the insurance industry as a whole suffers a certain level of loss due to a natural catastrophe such as earthquake or windstorms. An established index is used for the payment trigger.
[I144]
Infidelity
Refers to dishonest acts of employees.
[I054]
Inflation guard endorsement
Language which may be added to a homeowners policy for an additional premium to extend the coverage by increasing the limits of liability quarterly (by 1%, 2%, or some fixed amount) to offset inflation.
[I055]
Inherent explosion
Explosion caused by the normal processes of a risk (as opposed to one caused by external causes), such as a dust explosion in a grain elevator.
[I056]
Inherent vice
The characteristics of any physical property which are expected to cause deterioration or damage to that property without outside help, e.g., milk sours eventually, and wooden houses depreciate over time. Excluded by most insurance policies.
[I057]
Initial premium
A tentative charge made at the start of certain policies which is subsequently adjusted, at expiration or after certain information has been developed. Also known as deposit premium.
[I058]
Injury
An act which damages or destroys a person or property.
[I145]
Injury-in-fact theory
An event is recognized as an insurable loss (or occurrence) based upon the loss circumstances as reviewed by a court, with that court having authority to apply whichever trigger theory it decides is appropriate.
(See continuous trigger theory, exposure theory, and manifestation theory.)
[I059]
Inland marine
1) The insurance of property (generally on an "all-risk" basis) that is in the course of transportation or is of such a nature that it may easily be transported. Also includes some risks at fixed locations considered "instruments of transportation or communication," such as bridges, tunnels, neon signs, and street clocks, etc., which were accepted as inland marine by custom.
2) Originally meant the insurance of goods in transit "inland," instead of at sea, by underwriters who specialized in ocean marine insurance.
[I060]
Innkeepers legal liability
Insures hotel/motel operators against their legal responsibility to care for the property of their guests. This coverage is now typically written under a commercial crime coverage form.
[I061]
Innocent capacity
The amount of insurance offered the public by inexperienced insurers or reinsurers.
[I177]
Innocent insured (doctrine)
A concept (that still appears statutorily in some jurisdictions) that preserves one person's right to recover under an insurance contract if the insurance coverage involved a loss that was deliberately caused by another insured. However, in order to recover, the affected insured must not have had any part in either deceiving the insurer or causing the loss. Also, an innocent insured's status may (depending on the jurisdiction) be voided if an insurance policy contains a provision that specifically excludes coverage for non-complicit parties.
[I178]
Innocent spouse
(See innocent insured (doctrine).)
[I137]
Inside buildup
The cash value that builds in a life insurance policy that (for most policyholders) escapes taxation until withdrawn from the policy.
[I062]
Inside limits
Sub-limits set within some types of policies, that limit specified benefits or types of losses to less than the policy limit.
[I063]
Insolvency clause
Required by law to be included in reinsurance contracts, this clause holds the reinsurer liable for payments under a treaty, even though the reinsured company in that treaty has become insolvent.
[I064]
Insolvency fund
An amount of money assessed certain insurers in a given state to reimburse policyholders and claimants of an insolvent insurer in that state. The fund may be created before an insolvency occurs (pre-assessment, as in New York) or afterward (post-assessment), and virtually all states now have such protection. Also called a guaranty fund.
[I065]
Inspection
A visual or physical examination of a property to determine whether it is an acceptable risk for insurance.
(See credit report.)
[I066]
Inspection bureau
1) An organization which inspects risks and makes surveys for the use of companies in their underwriting.
2) In some states, a rating bureau.
[I146]
Inspection reports
Physical inspection of property ordered by underwriters to determine if property qualifies for insurance coverage.
[I067]
Inspection slip
The report of an inspector on the characteristics of the insured property.
[I068]
Inspector
One who looks at risks and reports on their acceptability for coverage. In marine insurance, an inspector is a "surveyor."
[I069]
Installation insurance
Protection for the installer of equipment against loss by specified perils or on an "all-risk" basis to property in the course of installation.
[I070]
Installment premium
The payment of certain premiums may be made by the policyholder in installments.
[I138]
Installment refund option
A settlement option in life insurance that pays a life income to the beneficiary. If the beneficiary dies before the original benefit is fully paid then the remainder (the refund) is paid to the contingent payee.
[I071]
Installment sales floater
Protects the seller of property in possession of the purchaser (for which payments by the purchaser have not been completed) against loss caused by insured perils to the seller's remaining financial interest. Also known as conditional sales floater.
Institute cargo clauses
Refers to a standard set of marine cargo policy coverage conditions that are found in most such forms; they come in several packages (normally clauses A, B and C) with "A" offering the broadest coverage. Different clauses are applicable according to the type of cargo involved with a given situation.
Institute for Global Insurance Education
A global association of independent, not-for-profit insurance institutions that promote the dissemination of education to insurance professionals, creates networking opportunities and assists in developing insurance programs at all levels. The association's members may be individuals as well as corporate entities. Headquarters: Malvern, PA
[I072]
Institutional investors
Sizable investors who invest funds that have been entrusted to them. One common example is insurance companies that invest allowable premiums and reserves to earn additional income while those funds are not currently needed to pay claims.
[I073]
Institutional policy
A package policy forming a part of the special multiperil policy program applicable to institutional buildings (such as buildings occupied by educational, religious, sanitary, charitable, governmental, or nonprofit organizations). Basically, the policy covers fire, allied lines and liability, and can be extended for most additional required coverages such as boiler and machinery, burglary and robbery, fidelity, business interruption, etc.
[I165]
Instrumentality
The means or methods by which functions or policies are carried out. The tools or implements used to accomplish a purpose.
[I074]
Insurable interest
A potential for financial loss from a certain event which a person must have before acquiring insurance against that event. The event may be illustrated by the following: the destruction of property owned (in fire insurance); the incurring of legal liability for negligence in causing loss to others (in liability insurance); the compliance with law (in workers compensation insurance); the loss or impairment of human life value (in life insurance, disability insurance, and annuities); or expenses fortuitously incurred (in hospitalization insurance). In life insurance, the applicant of the policy must suffer a financial loss, or the loss of love and affection, by the death of the insured.
(See interest.)
[I075]
Insurable risk
Any subject matter eligible for insurance. While the law does not specify minimum criteria (except occasionally by regulation that the size of any risk insured and the amount of premium writings by an insurer be related to its financial strength), and textbook writers disagree on essential criteria, the following are probably desirable:
1) Enough relatively similar exposure units should be insured to permit the operation of the Law of Large Numbers (unless reinsurance is used by the insurer)
2) Losses insured should be measurable and accidental to the insured (to prevent intentional losses)
3) Risks taken should not threaten the insurer with a catastrophe (unless reinsurance is used) because of their centralized location or other condition.
[I139]
Insurability statement
Life insurance underwriting may take time. If weeks or months have elapsed since the applicant completed the application, the insurer may require the applicant to sign an insurability statement before the policy is delivered that says that health statements and other statements made on the original application are still correct.
[I076]
Insurance
The transfer of risk, or chance of loss from one party (the insured) to another party (the insurer), in which the insurer promises, usually specified in a written contract, to pay the insured or others on the insured's behalf, an amount of money, services, or both, for economic losses sustained from an unexpected (accidental) event, during a period of time for which the insured makes a premium payment to the insurer.
(See insurer.)
[I077]
Insurance Accounting and Systems Association (IASA)
An international organization to promote the study, research and development of modern theory, practice and procedure as applied to insurance accounting and statistics. Headquarters: Durham, NC.
[I078]
Insurance agency
A business office whose function is the sales of insurance and insurance products. An agency may be owned or run by a general agent, manager, independent agent or company manager. The principal is responsible for the statements and actions of agents performing within the scope of authorization specified in the agency agreement.
(See captive agent, general agent and independent agent.)
[I079]
Insurance agent
One who has the authority to act for another. In insurance language, an agent is the person who sells insurance by contacting the policyholder. By contract and by law, the agent is endowed with many of the powers of the company itself. There are various different types of agents, based upon the contractual relationship with the insurer they represent.
(See independent agent, exclusive agent and broker.)
[I080]
Insurance agents and brokers errors and omissions insurance
Protects an agent or broker against claims for negligent acts, errors or omissions in the conduct of business.
[I147]
Insurance archaeology
A process, similar to an audit, for researching internal and external sources to reconstruct and document an organization’s history of insurance coverage. This is particularly important to assist with liability arising from past years or even decades, such as damage related to environmental liability or asbestos.
[I081]
Insurance broker
A licensed, legal representative of the insured who negotiates with underwriters on behalf of the insured. The broker receives a commission from the insurer (underwriter).
[I148]
Insurance call center
In its simplest form, a physical site used by an organization (insurer) to handle large volumes of incoming and outgoing phone calls involving customer service, marketing, and other business transactions. Such centers are highly dependent upon sophisticated data management and technology. Also called contact centers.
[I082]
Insurance commissioner
A state official charged with enforcing the state's laws governing insurance, in some states appointed by the governor, and elected in others. Also referred to in some states as superintendent of insurance or director of insurance.
[I083]
Insurance company
An organization chartered by state law to operate as an insurer in some of the principal types of insurance: life, fire, marine, casualty, and surety. Reciprocals and Lloyd's syndicates permitted under many state laws are not companies, nor are they corporations.
[I084]
Insurance contract
The written contract or insurance policy between the insured and the insurer detailing the coverage provided, exclusions and limitations, conditions in case of loss, and other details pertinent to the terms of the agreement.
[I149]
Insurance contract parts
Refers to the four general sections of declarations.
[I085]
Insurance Crime Prevention Institute (ICPI)
Serves casualty insurers for the investigation of fraudulent insurance claims other than for accident and health or workers compensation, and provides a deterrent to such losses. Headquarters: Westport, CT.
[I170]
Insurance Data Management Association
The Insurance Data Management Association is an organization dedicated to encouraging professionalism in the insurance-related, data management area. The association creates and maintains training material and courses and also tests data management competency through its own certification program. Headquarters: Jersey City, NJ.
[I086]
Insurance department
That department of a state government which has charge of enforcing the laws governing insurance. Usually run by either an elected or appointed official called the superintendent or commissioner of insurance.
[I179]
Insurance derivatives
A contract under which an insurer is entitled to a substantial cash payment that is contingent upon another event, typically being a certain level of loss experienced by the total insurance industry due to a specified event (such as an earthquake or a hurricane). The underlying activity, or trigger, must occur within a certain time period.
[I087]
Insurance examiner
A representative or employee of a state insurance department delegated the task of verifying a company's records and procedures to determine that the law has been observed.
[I088]
Insurance exchanges
Exchanges established by law in New York, Illinois and Florida (and considered elsewhere) to provide facilities at a fixed location patterned after Lloyd's of London. Through insurance exchanges, buyers can secure insurance from insurers generally in the form of underwriting syndicates, which are members of the exchange.
(See New York Insurance Exchange, bourse and Lloyd's of London.)
[I158]
Insurance forensics
A process, similar to an audit, for researching internal and external sources to reconstruct and document an organization’s history of insurance coverage. This is particularly important to assist with liability arising from past years or even decades, such as damage related to environmental liability or asbestos.
[I171]
Insurance fraud
Typically involves illegal attempts to secure insurance benefits by submitting false claims, selling illegal or phony coverage, or stealing insurance premiums.
[I089]
Insurance Guaranty (Insolvency) Act
Legislation enacted in many states providing for assessments on insurance companies to reimburse policyholders and claimants of insolvent insurers.
(See guaranty fund.)
[I090]
Insurance Hall of Fame
An institution at Ohio State University recognizing individuals who have made outstanding contributions to insurance thought and practice anywhere at any time.
[I091]
Insurance Information Institute
A public relations organization supported by several hundred property and liability insurance companies. Provides extensive literature to the public and to high schools throughout the country in furthering its purpose of improving public understanding of property and liability insurance. Headquarters: New York, NY.
[I092]
Insurance insolvency act
Legislation enacted in many states providing for assessments on insurance companies to reimburse policyholders and claimants of insolvent insurers.
(See guaranty fund.)
[I093]
Insurance Institute of America, Inc. (IIA)
An educational organization which sets standards and gives examinations for diplomas or fellowships in general insurance, loss adjusting, underwriting, management and risk management. Headquarters: Malvern, PA.
[I094]
Insurance Institute for Highway Safety
An independent, nonprofit scientific organization established and supported by the insurance companies. Its research identifies, evaluates and develops ways to reduce human and economic damage resulting from the use of motor vehicles. The institute also seeks to make the results of its studies known to the widest possible audience and provides substantial input to federal policymakers. Headquarters: Washington, DC.
[I095]
Insurance management
The method used to handle a specific risk's exposure to loss by almost exclusive use of insurance coverages and policies, as well as the control and management of the insurance policies purchased.
[I096]
Insurance Marketing Communications Association (IMCA)
A trade association of those in charge of insurance company advertising, marketing and public relations functions. Formerly known as the Insurance Advertising Conference.
[I097]
Insurance policy<.strong>
The written contract or insurance policy between the insured and the insurer detailing the coverage provided, exclusions and limitations, conditions in case of loss, and other details pertinent to the terms of the agreement.
[I150]
Insurance purchasing group
A coverage alternative to using the traditional insurance market, it refers to a number of parties with similar coverage needs who incorporate into a group to buy liability insurance. Such arrangements are authorized by the Federal Liability Risk Retention Act of 1986.
[I098]
Insurance Regulatory Information System (IRIS)
Formerly known as Early Warning System or Early Warning Tests, financial ratio and performance criteria designed by the National Association of Insurance Commissioners to identify insurance companies which may need close surveillance by state insurance departments.
[I099]
Insurance representatives
The collection of professionals that represents the insurance industry in the sales and field positions, such as agency, solicitors, brokers, producers, consultants, etc.
[I099a]
Insurance retention group (IRG)
An insurance company organized by a group of businesses or institutions in the same line of business to provide liability insurance for the owners or organizers. As permitted by federal legislation passed in 1986, such a group is eligible to provide insurance for its members in any state after being licensed in any one state. Also known as risk retention group.
[I159]
Insurance scoring
Refers to assigning a numerical score to a number of attributes in an individual's financial history in order to evaluate his or her desirability as a customer or loan prospect. Due to a discovery of a correlation between credit scores and loss probability, credit scores have been modified for use as an underwriting tool by insurers.
[I100]
Insurance Services Office (ISO)
A corporation which provides a wide variety of services on a national basis. Among its operations are rating, statistical, actuarial, and policy form services for all classes of property and casualty businesses. The corporation also functions as an insurance rating organization and, where applicable, as an advisory organization or as a statistical agent. Headquarters: New York, NY.
(See rate card.)
[I101]
Insurance Society of New York, Inc.
A nonprofit organization founded in 1901 for educational purposes. Its earliest contribution was the formation of its insurance library, today the world's largest collection of insurance literature. In 1917, it started insurance instruction, which in 1947 became The School of Insurance, which was converted in 1962 to the fully accredited degree-granting institution, The College of Insurance.
[I102]
Insurance superintendent
A state official charged with enforcing the state's laws governing insurance, in some states appointed by the governor, and elected in others. Also referred to in some states as commissioner of insurance or director of insurance.
[I151]
Insurance to value
1) In property insurance, a clause requiring the insured to maintain insurance at least equal to stipulated percentage of value in order to collect partial losses in full. If the insurance is less than the minimum required, that proportion of the loss will be paid which the amount of insurance carried bears to the amount which should have been carried.
Symbolically:
Insurance Carried x Loss = Payment (subject to policy limit)
Insurance Required
2) In major medical insurance, the clause that specifies the percentage of a loss which the company will pay and the percentage which the insured will bear (e.g., 8020, 7525).
[I172]
Insurance Training Professional
A designation created by the Society of Insurance Trainers & Educators (SITE) to acknowledge excellence in professional trainers. Headquarters: San Francisco, CA
[I140]
Insurance trust
One of any number of trusts into which life insurance is placed during the lifetime of the insured or into which the proceeds are payable upon death of the insured.
[I102a]
Insurance wraps
A general contractor is typically the party responsible for providing primary insurance coverage on the contract. This coverage must include protection for the work done by and the exposures resulting from the use of subcontractors. This includes coverages such as general liability and workers compensation but may also include business auto exposures. In order to obtain the necessary coverage, insurers may have to develop special programs and manuscript or tailoring endorsements to clarify the extent of the protection and who/what it encompasses. It is sometimes referred to simply as a "wrap."
[I103]
Insured
The person(s) or party(ies) protected by an insurance policy, synonymous with assured. Some property-liability policies distinguish between the named insured and other insureds.
(See policyholder and named insured.)
[I152]
Insured contracts
Contracts that are considered necessary to conducting business and are covered as part of premises-operations liability coverage.
[I104]
Insured loss ratio
Term used by an insurer when evaluating what portion or percent of that insured's losses are reinsured as compared to earned premium.
[I105]
Insured peril
Those causes of loss such as fire, explosion, or accident that are covered by the insurance contract. In many standard property insurance policies, peril is now called cause of loss.
[I106]
Insurer
The insurance company or other organization such as a syndicate, pool or association providing insurance coverage and services.
(See insurance.)
[I107]
Insuring agreement
The portion or section of an insurance policy that details what is covered by the contract for causes of loss or perils, subject to other provisions such as exclusions, limitations and conditions.
[I108]
Insuring clause
That portion of a policy which describes the risk which the insurer has agreed to assume.
[I109]
Insuror
A term adopted and used by some agents to enhance their public image as persons who represent insurers in effecting contracts of insurance between insurers and insureds. As such, insuror may be considered a misnomer when confused with insurer, which is recognized in statutory law as the party to an insurance contract which undertakes to indemnify for losses incurred by, or to provide services to, the other party to the insurance contract (the insured). Thus, an insurer is a risk-bearing party in an insurance contract, while an insuror is not. Two state associations of insurance agents, Tennessee and Colorado, use insuror in their title.
[I164]
Integrated disability management (IDM)
A cost management program that combines (integrates) management of a disability (either work-related or non-work-related) claim with that same loss administration. The method focuses upon quality, individual health care and flexibility in options to return an ill/injured worker back to work in an appropriate job.
[I160]
Integrated financial services
Typically refers to the trend of consumers seeking a broader range of financial services such as banking, brokerage and insurance from a single provider. This approach is also referred to as integrated financial services.
[I180]
Integrated Risk Management
(See enterprise risk management.)
Integration
Regarding an insurance program, the process of packaging different products while assuring that they do not provide duplicate coverages.
[I110]
Intentional injury
Depending upon the type of insurance:
1) injuries that are caused deliberately, or
2) self-inflicted injuries,
either of which is usually considered excluded by its respective policy type.
[I111]
Intentional loss
Losses that were intentionally caused, most often occurring with intent to collect insurance benefits or defraud the insurer.
[I162]
Inter vivos trust
A trust that is arranged during the creator's lifetime.
[I112]
Intercompany arbitration
When two or more insurers are involved in the settlement of a claim and those insurers are unable to agree as to the amounts and shares owed by each, arbitration may be involved in an attempt to settle the dispute out of court. When this happens, the matter is submitted to disinterested parties for solution. One party is appointed by each insurer, and the appointed arbitrators then pick an "umpire." Resolution occurs when two or more parties come to an agreement. The decision is binding on all parties involved.
[I161]
Intercompany reinsurance
A reinsurance arrangement between two or more companies that are affiliates of the same major insurance company group. It is a strategy for spreading a company's total risk more evenly.
[I113]
Interest
The subject of insurance such as the property insured or the loss against which the insurance company agrees to indemnify.
(See insurable interest.)
[I114]
Interest option
When a life insurance policy is called upon to pay the beneficiary the face amount after the death of the insured, some policies offer a settlement option to the beneficiary, whereby the beneficiary leaves the principal with the insurer to be invested or to accrue interest. That interest or investment income is paid periodically to the beneficiary until the beneficiary withdraws the balance.
[I115]
Interest policy
A policy which insures someone who has an interest in the described property, but who need not be the holder of full title to it. The New York standard form of fire policy adopted in 1943 is an interest policy, whereas the older forms were not.
[I141]
Interest sensitive whole life insurance
Whole life insurance that pays interest on cash value according to the variable investment results of the insurer. Traditional whole life pays a guaranteed cash value that does not participate in favorable or unfavorable insurer investment results.
[I116]
Interim rates
Temporary insurance prices, specified by a state insurance department for an insurer which has no legally effective rates otherwise, as a result of the commissioner's disapproval of its rates. The commissioner may require that a specified portion of premiums received during such interim period be placed in escrow until new rates become effective.
[I117]
Interinsurance exchange
A group of persons who agree to share each other's losses. An unincorporated mutual. Also known as "reciprocal exchange."
[I118]
Interline endorsement
In standard commercial insurance, an interline endorsement is one that applies across the lines of insurance to all coverage parts. Most often these types of endorsements have to do with general items, such as cancellation or nonrenewal provisions or the effective time of the policy.
[I166]
Interlocking clause
A reinsurance treaty provision. The clause reassigns loss or damage from a single occurrence to two or more reinsurance contracts.
[I167]
Interlocutory appeal
Refers to a district court level case that is presented to an appellate court during, rather than after, the case hearing. It is done in situations that will obviously be subject to review.
[I119]
Intermediary
One who arranges reinsurance between companies. A reinsurance broker.
[I120]
Intermediary clause
A contractual provision frequently used in reinsurance, in which payments (of premium) by the ceder company (the issuer of the original insurance policy) to the broker (the intermediary) discharge the ceder's debts, whereas payments (for losses) by the reinsurer to the broker do not discharge the debts of the reinsurer until payments have actually been received by the ceder.
[I142]
Internal replacement
Replacement is the canceling or lapsing of one life insurance policy for another. An internal replacement is when a policy is canceled and replaced by another policy with the same insurer.
[I121]
International Association of Health Underwriters
A trade association composed of insurance companies writing health insurance. The purpose is to foster proper practice in the marketing of these products and to create good public relations.
[I181]
International Cooperative and Mutual Insurance Federation
This group is a global association with membership consisting of cooperative and mutual insurers that provides conferences, networking opportunities, research and publications. Headquarters: Altrincham, United Kingdom.
[I121a]
International insurance coverages/exposures
Business coverage for companies that conduct business outside the USA. The scope of coverages available may include but are not limited to: premises and product liability, automobile liability, workers compensation and employers liability, property including transit, kidnap and ransom, confiscation and civil war, crime, business interruption, difference in limits and conditions, and endemic disease.
[I182]
International Insurance Society
A globalwide membership of insurance entities that was founded in 1965. The group encourages networking, academic pursuits (particularly on international insurance issues) and education. It sponsors annual meetings, funds research projects and awards (including an international insurance hall of fame). Headquarters: New York, NY.
[I183]
International liability policy
(See international insurance coverages/exposures.)
[I173]
International Maritime Bureau
The International Maritime Bureau is a nonprofit division of the International Chamber of Commerce (ICC). The organization's focus is on providing information to facilitate safe maritime trading, including operation of its Piracy Reporting Center (that publishes information on pirate activity worldwide). The IMB also investigates maritime-related crime and fraud activity. Headquarters: Paris, France.
[I122]
Interrogatory
A question such as is found in the NAIC Annual Statement or as is addressed by one party to another party in a lawsuit.
[I123]
Interstate commerce
The Constitution of the United States places the regulation of commerce between the several states (interstate commerce) under the supervision of the federal government. Until the decision of the Supreme Court in 1944 in the Southeastern Underwriters Association Case, insurance had been held not to be commerce and therefore not interstate commerce. That decision changed the entire outlook, so that today the business is subject to such regulation as the Congress chooses to exert, "to the extent that the states are not regulating insurance."
(See Southeastern Underwriters Association (SEUA), and S.E.U.A. Case.)
[I124]
Interstate Commerce Endorsement To Motor Truck Cargo Policies (ICC Endorsement)
In inland marine insurance, this is the provision which broadens the policy coverage to conform to Interstate Commerce Commission requirements with respect to a carrier's liability for customers' goods.
Interstate Insurance Compact
An important modernization initiative that benefits state insurance regulators, consumers and the insurance industry. The Compact enhances the efficiency and effectiveness of the way insurance products are filed, reviewed and approved allowing consumers to have faster access to competitive insurance products in an ever-changing global marketplace.
Interstate Insurance Product Regulation Commission
This is the regulatory arm of the multistate Interstate Insurance Compact. It oversees insurance product filings, develops filing guidelines and standards and develops uniform product and rate reviews to facilitate insurance product introduction and approval on a multistate basis. Headquarters: Fairfax, VA.
[I125]
Inventory
A list of one's possessions, usually personal, as distinguished from "real" possessions. Also the stock in trade of a business.
[I126]
Investment income
That part of a company's income derived from its invested assets before realized capital gain or loss, as opposed to its underwriting (risk-taking) activities.
(See capital gain.)
[I127]
Involuntary associations
Those industry or industry-related organizations operating under an industry or governmental program to supply insurance needs for what is purported to be an unfilled or residue market.
[I153]
Involuntary costs
Costs borne by insurers related to their mandated participation in a state’s insurance pools for covering exposures that are not handled by the voluntary market.
[I128]
IRA--Individual Retirement Account
A tax deferred savings plan that has been approved by the federal government for those individuals who are not otherwise covered by an employer's retirement plan. In order to be approved and eligible for deferred tax treatment, strict eligibility criteria are mandated.
[I128a]
IRG--insurance retention group
An insurance company organized by a group of businesses or institutions in the same line of business to provide liability insurance for the owners or organizers. As permitted by federal legislation passed in 1986, such a group is eligible to provide insurance for its members in any state after being licensed in any one state. Also known as risk retention group.
[I129]
IRIS--Insurance Regulatory Information System
Formerly known as Early Warning System or Early Warning Tests, financial ratio and performance criteria designed by the National Association of Insurance Commissioners to identify insurance companies which may need close surveillance by state insurance departments.
[I130]
IRPM--Individual Risk Premium Modification Rating Plan
A program whereby equitable rates or premiums can be developed for large premium package risks by taking into consideration factors likely to affect future losses and expenses. Expense modification is based on the fact that handling costs for large risks may vary from the average. Risk modification recognizes special characteristics, other than those considered in the determination of the basic rate, which would improve the risk. This flexible rating approach, in effect for casualty insurance for many years, was extended to the remaining property and liability lines in 1966.
[I131]
Irrevocable beneficiary
A type of life insurance policy that does not allow a beneficiary to be changed without the beneficiary's written consent.
(See absolute beneficiary.)
[I132]
ISO--Insurance Services Office
A corporation which provides a wide variety of services on a national basis. Among its operations are rating, statistical, actuarial, and policy form services for all classes of property and casualty businesses. The corporation also functions as an insurance rating organization and, where applicable, as an advisory organization or as a statistical agent. Headquarters: New York, NY.
(See rate card.)
[I133]
Issued business
Those policies that have been ordered or for which the request for coverage has been ordered by the insured, and the policy has been issued by the insurer, but has not yet been delivered to or accepted by the insured.
[I174]
ITP
(See Insurance Training Professional.)
