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  • Racketeering-Influenced Corrupt Organizations Act
  • Radioactive contamination insurance
  • Railroad Insurance Rating Bureau (RIRB)
  • Railroad protective liability
  • Railroad travel policy
  • Rain insurance
  • Ranchowners personal liability form
  • Ransom insurance
  • Rate
  • Rate adequacy
  • Rate card
  • Rate class
  • Rate discrimination
  • Rate filing
  • Rate of benefit
  • Rate regulation
  • Rate suppression
  • Rated policy
  • Rating agencies
  • Rating bureau
  • Readjustment income
  • Real estate agents errors and omissions insurance
  • Real property
  • Reasonable and customary charge
  • Reasonable repairs
  • Rebate
  • Rebating
  • REBC
  • Recapture
  • Receivables
  • Reciprocal exchange
  • Reciprocal Risk Retention Group
  • Reciprocity
  • Reclamation bond
  • Recoupment
  • Recovery
  • Recurrent disability
  • Recurring clause
  • Red book/Blue book
  • Redlining
  • Reduced paid-up insurance option
  • Reduced rate average clause
  • Reduction
  • Reefer
  • Re-entry term life insurance
  • Reference
  • Reformation
  • Refund annuity
  • Registered mail insurance
  • Registered representative
  • Registered (mutual fund) representative errors and omissions
  • Registered tonnage
  • Regression analysis
  • Regulation of insurance
  • Rehabilitation
  • Reinstatement
  • Reinstatement petition
  • Reinsurance
  • Reinsurance Association of America
  • Reinsurance capacity
  • Reinsurance commission
  • Reinsurance exchange
  • Reinsurance premium
  • Reinsurance ticket
  • Reinsurance treaty
  • Reinsurer
  • Release
  • Remainder
  • Remedial investigation
  • Remediation
  • Removal
  • Renewable term life insurance
  • Renewal
  • Renewal certificate
  • Rent insurance
  • Rent-a-captive
  • Rental reimbursement coverage
  • Rental value insurance
  • Renters insurance
  • Replacement
  • Replacement cost
  • Replacement cost insurance
  • Replacement ratio
  • Replevin
  • Reporting policy (or form)
  • Representation
  • Reproduction cost
  • Res ipsa loquitur
  • Rescission
  • Reservation of Rights
  • Reserve
  • Reserve premium
  • Residence employee
  • Residual disability benefit
  • Residual disability income policy
  • Residual market mechanism
  • Residual value insurance
  • Respondentia
  • Restoration premium
  • Results
  • Retail store policy
  • Retainer clause
  • Retaliatory laws
  • Retention
  • Retention clause
  • Retention group
  • Retirement annuity
  • Retirement income policy
  • Retiring from a line
  • Retroactive conversion
  • Retroactive date
  • Retroactive insurance
  • Retrocedent
  • Retrocession
  • Retrocessionaire
  • Retrospective rating
  • Return commission
  • Return for no claim
  • Return on equity
  • Return premium
  • Re-underwriting
  • Reverse competition
  • Revocable beneficiary
  • RHU
  • RICO
  • Rider
  • Right of salvage
  • RIMS--Risk and Insurance Management Society, Inc.
  • Riot
  • Riot and civil commotion insurance
  • Riparian property
  • Riparian rights
  • RIRB--Railroad Insurance Rating Bureau
  • Risk
  • Risk and Insurance Management Society, Inc. (RIMS)
  • Risk avoidance
  • Risk-based capital
  • Risk management
  • Risk manager
  • Risk mapping
  • Risk purchasing group
  • Risk retention group
  • Road hazard
  • Road rage
  • Roadside assistance
  • Robbery
  • Rolling stores
  • Rolling wrap-up
  • Rollover
  • RPG (risk purchasing group)
  • RPLU
  • Ruin Theory
  • Runoff
  • Running down clause
  • RVI

Racketeering-Influenced Corrupt Organizations Act

This Act was introduced as a tool to combat organized crime; however, its wording is flexible to the point that it has been used for prosecuting corporate fraud. Since it affects a company's chartered officers, it could be an exposure under certain specialty and directors and officers contracts.
Radioactive contamination insurance

Coverage against loss caused by radioactive contamination. Such coverage is excluded from most insurance contracts and is usually covered under policies issued by pools created for this purpose. Other risks which might occasionally be exposed to damage can obtain this insurance as an additional coverage to an existing policy. The endorsement may be used with a fire form and on inland marine insurance policies, such as transit coverage for truckers or shippers.

Railroad Insurance Rating Bureau (RIRB)

A rating bureau which rates railroad property and files with state insurance departments on behalf of its member companies and subscribers.

Railroad protective liability

The standard commercial general liability policy excludes liability for construction or demolition operations on or near railroad property, such as tracks, trestles, sidetracks, etc. In order to provide coverage for this exposure, the railroad protective liability policy is available to provide protective liability coverage for railroad owners, property owners, or contracts from the vicarious acts of contractors or subcontractors who are working on their behalf. The policy is purchased by the subcontractor or contractor in the name of the party needing protection. For example, a contractor demolishing a building near a railroad track may need to purchase a railroad protective liability policy for the property owner, the railroad, or both.

Railroad travel policy

A type of life or accident policy sold at railroads to provide coverage for bodily injury, accident or death suffered by passengers while traveling on the railroad. The coverage may be sold by railroad ticket agents or in vending machines.

Rain insurance

Insurance against loss due to the fall of rain, which may result in reduced profits or earnings. Also available to vacationers, paying the insured amount if rain occurs on specific days.

Ranchowners personal liability form

An endorsement available in the ranchowners program to purchase non-automobile personal liability protection.

Ransom insurance

This coverage was originally created for financial institutions, primarily banks. It was tailored to meet the standard kidnap premise, i.e., forcing the bank to withdraw the ransom money from its vaults and deliver it to a designated place before release of the banker or family. Typically, the insurance covers named employees for individual or aggregate amounts, with deductibles requiring the insured to participate in about 10% of any loss.


The price for a unit of insurance; all units in a given policy, multiplied by the rate per unit, produce the premium. In fire insurance, the price per $100 of insurance for one year. The basis for pricing other types of insurance varies greatly; for example, payroll is used in workers compensation insurance, area of retail floor space or sales volume is used in certain types of general liability insurance, and so forth.

Rate adequacy

An insurance regulator's requirement that a carrier's premiums be reasonable as well as sufficient to cover its operating expenses, claims obligations and result in a reasonable profit.

Rate card

Written records on file with rating bureaus showing the rate to be charged a risk following inspection or application of a schedule.

(See ISO--Insurance Services Office.)

Rate class

Rates for various insurance policy forms are segmented into classes based upon the exposure to loss. In one policy form, a class I rate may be the lowest rate. In another, the class I rate may be the highest rate.

Rate discrimination

To rate or calculate the premium charged an applicant for insurance differently than other insureds of the same class or with the same characteristics, because of any factor not related to the applicant's loss producing or expense producing qualities, such as charging a higher premium than the loss producing or expense producing qualities would justify. Factors such as a person's race, color, creed, or national origin that are unrelated to the chance of loss should not affect the writing of insurance. While making distinctions is essential in any insurance system to match individual risks with the rates appropriate for their class, unfair discrimination is illegal. All states prohibit rate discrimination.

Rate filing

A document, furnished to a state insurance department by an insurer or a rating bureau, providing detailed information on an insurance rate used or proposed. Some rate filings are made to inform insurance departments about rates already in use in file-and-use states, or in use-and-file states. Some are made in prior-approval states to seek the department's approval prior to using the rate.
Rate of benefit

The percentage of employee income that a disability program has been designed to replace. This rate is generally expressed as a range.

Rate regulation

In the insurance industry, each state has its own state insurance department that determines the type and degree of control or regulation that state will have in the rate making process of the insurers licensed for business in that state. Some states require prior approval, while others are at the opposite end of the spectrum requiring only that the insurer file-and-use.

Rate suppression

Refers to rates that are held low artificially by an act of state rate regulation. Such rates are insufficient to support writing the applicable line of business such as personal auto or workers compensation.

Rated policy

A person with less than average health or who has a high-risk occupation may receive a rated life insurance policy. The rating may be an additional percent of the total premium or a flat extra amount of premium per $1,000 of death benefit.

Rating agencies

Refers to the various organizations (such as A.M. Best Co.; Duff & Phelps Inc.; Fitch, Inc.; Moody's Investors Services; Standard & Poor's Corp.; and Weiss Ratings, Inc.) that evaluate an insurer's financial strength and ability to meet claims obligations. Factors considered include company earnings, capital adequacy, operating leverage, liquidity, investment performance, reinsurance programs, and management ability, integrity and experience.

Rating bureau

An association of insurers which makes rates for the use of its affiliated insurers; devises territorial classifications, rating plans, schedules, manuals, policy forms, and building inspections; and performs related functions for companies. Also known as advisory organizations.

(See advisory organization, and trade association.)

Readjustment income

The calculation on the change in the amount of income a family unit would need to have following the death or disability of the primary income producer.

Real estate agents errors and omissions insurance

A type of professional liability or errors and omissions protection designed for real estate agents. It covers damages or losses from negligence caused by the rendering or failing to render of services, or negligence caused by other errors and omissions that may be committed during the performance of duties as a real estate agent.

Real property

The earth and all attached to it; land and buildings. Also known as real estate.

Reasonable and customary charge

Health insurers look to see what the average medical professional will charge for a particular procedure in a particular geography. A reasonable and customary benefit will pay for this average charge, but if the physician or other medical care provider wants to charge more, the patient may have to pay the difference.

Reasonable repairs

A provision in most property polices which agrees to pay for the reasonable repairs made solely to protect covered property form further damage.


Anything of value given or promised a prospective insured or unlicensed party by an agent or broker as an inducement to purchase insurance, including part or all of the commission. Rebating is usually illegal for all parties involved, except in Florida where it has been held to be legal.


An inducement to purchase an insurance policy that is not in the insurance contract.


Registered Employee Benefits Consultant designation sponsored by the National Association of Health Underwriters. Headquarters: Washington, DC.


As it applies to reinsurance treaties or placements, it is when the ceding insurer takes back or retains business previously ceded to a reinsurer.


Amounts owed to a business for goods or services provided.

Reciprocal exchange

A group of persons who agree to share each other's losses. An unincorporated mutual. Also known as an interinsurance exchange.
Reciprocal Risk Retention Group

An unincorporated group of entities which, via use of a managing attorney-in-fact, exchange insurance agreements with each other, agreeing to cover types of losses specified in the agreements. Profits/savings are distributed back to each member of the reciprocal.


When insurers mutually agree to provide each other with reinsurance protection. One insurer accepts the reinsurance cessions of the other insurer who, in return, accepts the cessions of the first.

Reclamation bond

A bond to assure that a contractor will restore the land that surrounds a project to its original state when the project is complete.


A party that is confronted by a legal action responds by filing a separate action, alleging a different set of circumstances.


Loss money which an insurance company gets back from reinsurance, salvage or by subrogation against a third party at fault.
Recurrent disability

Any subsequent disablement that arises from the same incident. It generally allows for the re-injured employee to immediately receive disability payments.

Recurring clause

A health insurance clause that sets a specific time period that must elapse between the occurrence and reoccurrence of the same illness or injury in order for the policy to respond with coverage for the reoccurrence.

Red book/Blue book

A publication that has become a standard and that is used to determine the physical value of both automobiles and trucks.


The designation by an insurer of a certain geographical area considered unacceptable for the writing of insurance, usually illegal because it is considered to be unfair discrimination. Redlining is refusing to insure, refusing to renew, canceling, charging a higher rate, or limiting the amount or type of property insurance solely because of the geographic location of a risk. Further, redlining involves risk selection criteria that are not based on sound underwriting and actuarial principles, reasonably related to actual or anticipated loss experience of risk(s) having similar characteristics.

(See unfair discrimination.)

Reduced paid-up insurance option

One of the whole life nonforfeiture options. The company purchases a paid-up life insurance policy for whatever limit the cash value in the original policy will fund.

(See also nonforfeiture options.)

Reduced rate average clause

1) In property insurance, a clause requiring the insured to maintain insurance at least equal to a 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.


Insurance Carried x Loss = Payment (subject to policy limit)
Insurance Required

2) In major medical insurance, the clause which specifies the percentage of a loss that the company will pay and the percentage that the insured will bear (such as 80%­20%, 75%­25%).


1) To lower or reduce limits, coverage or benefits in order to reduce premium, or as a result of a hazard, exposure or condition.

2) To lower premium charges to reflect reduced coverage, hazard or exposure controls, or better than average loss experience.


A refrigerated transportation container used in hauling cargo.

Re-entry term life insurance

An endorsement or rider found most often in term life insurance coverage that allows the insured to request increases in coverage periodically at a stable or favorable premium.


In certain states, arbitration is called "reference."

(See arbitration clause.)

An act involving a court's decision to reform (revert) a contract to adhere to the proper intent of the contracting parties. The dispute brought before the court that resulted in the reformation is resolved according to that altered language.

Refund annuity

A type of annuity policy which allows for the return of all the premiums paid to the beneficiary, including interest earned, should the insured die prior to the accumulation period.

Registered mail insurance

An inland marine form which insures money and securities for banks and brokers while in transit by registered mail.

Registered representative

A person who is licensed by the NASD and a specific broker-dealer to sell equities.

(See also NASD.)

Registered (mutual fund) representative errors and omissions

A professional liability or errors and omissions coverage specially designed to meet the needs of registered representatives of mutual fund or variable annuities. Protection is for damages caused by the rendering or failing to render of services or from errors and omissions while performing occupational duties of the sale of mutual funds or variable annuities.

Registered tonnage

The cargo capacity of commercial ships measured in tons, figuring each ton to occupy 100 cubic feet.

Regression analysis

A statistical method of measuring or predicting working relationships between dependent variables and one or more independent variables that is based upon observing actual data.

Regulation of insurance

Governmental control of the business of insurance by federal, state or local law.


1) When used in workers compensation insurance, it includes the various types of medical treatment, mental and physical therapy, education, vocational training, and retraining necessary to return an injured employee to work.

2) When used in reference to an insurer with solvency concerns, it is the action mandated by the applicable state insurance department in an attempt to restore and rehabilitate, or salvage a financially impaired company and return that insurer to solvency.


1) Restoration of the amount of insurance depleted from a policy by payment of loss. Most fire policies contain an automatic reinstatement clause.

2) Reinstituting or putting coverage back into effect under a policy in which coverage has been suspended or canceled for a part of the policy term.

Reinstatement petition

A formal request (generally to a workers compensation board) to have benefits resume after they have been terminated. The request must be due to a reoccurrence of the original injury that justified the workers comp claim.


1) The transaction whereby an insurance company (the reinsurer), for a consideration, agrees to indemnify another insurance company known as the ceding company (the reinsured) against all or part of a loss which the latter may sustain under a policy or policies it has issued.

2) When referred to as "a reinsurance," the term means the relationship between reinsured(s) and reinsurer(s).

Reinsurance Association of America

A group of property-casualty professional reinsurers formed to undertake programs designed to create a national awareness of the role and function of the reinsurer to the public, governmental bodies and the insurance industry in general. Founded in 1968 with headquarters in Washington, DC.

Reinsurance capacity

1) With respect to an individual account, insurer, or a book of business, it is the amount a reinsurer has available to commit to that risk, that insurer, or that book of business.

2) On a broader scale, this term is also used to express the total amount available in the national or worldwide basis for reinsurance offerings.

Reinsurance commission

The commission paid by the reinsurer to the ceding company (primary insurer) on reinsurance agreements as compensation to place the business with the reinsurer and to cover the ceding company's acquisition expenses.

Reinsurance exchange

A reinsurance operation designed to facilitate the ceding, assumption, offering, or exchange of reinsurance between its members.

Reinsurance premium

The premiums a ceding insurer must pay the reinsurer for the reinsurance coverage provided.

Reinsurance ticket

A notation in the form of a separate piece of paper attached to the daily report of an insurer, setting forth the details of reinsurance that has been effected.

Reinsurance treaty

A reinsurance agreement between an insurance company and a reinsurer, usually for one year or longer, which may be divided into two broad classifications:

1) the participating type which provides for sharing of risks between the ceding company and the reinsurer; and

2) the excess type which provides for indemnity by the reinsurer only for loss which exceeds some specified predetermined amount.


An organization which assumes the liability of an insurer by way of reinsurance.


A written acknowledgment that policy obligations have been fulfilled.


The remaining premium a reinsurer is actually able to retain after deducting any commissions paid to the ceding insurer.

Remedial investigation
A thorough study for collecting information in order to determine the scope of contamination at a Superfund site. It is also used to create remediation alternatives, including an analysis of related costs.


The act of affording a remedy, of righting wrongs and abuses. To compensate or indemnify. As it refers to pollution-related losses, it describes the obligation to restore the damaged property (usually land or body of water) to the condition it enjoyed prior to the escape of the pollutant.


The taking of property to some place other than where it was insured. The standard fire insurance policy used in most states insures against damage done in removing the insured property from the path of the fire.

Renewable term life insurance

A term life insurance coverage that offers the renewal of the coverage without making the insured take physical exams or otherwise prove insurability.


A policy issued to replace one which has expired.

Renewal certificate

A document issued by an insurance company to its policyholder indicating that the insurance policy to which the certificate refers is being renewed for another policy term.

Rent insurance

Insurance which reimburses a building owner for lost rental income due to a covered hazard making the building unusable by a tenant. Rent insurance is usually offered as part of a business income coverage form.


Companies may not want to incur the expense, time and effort necessary to establish their own captive insurers. With a rent-a-captive, a business rents space within a larger captive that provides access to the license, surplus, management and other services of the captive for a fee that may be much less than it would cost for the business to begin its own captive insurer. The captive may also have access to quality reinsurers and other expertise that the business does not.

Rental reimbursement coverage

An optional personal auto coverage endorsement to provide reimbursement for the expenses incurred by an insured when a temporary replacement vehicle is needed following a covered accident to the insured's vehicle.

Rental value insurance

(See rent insurance.)

Renters insurance

In personal lines insurance, it is a package of property and liability coverages designed to protect apartment or dwelling renters. Although renters do not own the building, physical damage losses could occur to owned contents, and liability coverage is needed for personal and premises exposures. It is a self-contained package with endorsements available to add or increase coverages, much the same as a homeowners policy.


When a life insurance policy is surrendered in order to purchase another life insurance policy (or similar product), this is considered replacement. Each state has laws requiring agents and companies to inform customers of their rights under their old policy to prevent unscrupulous replacement.

Replacement cost

When used in property insurance contracts, this is the amount it would take to replace the property with like property of the same quality and construction. No deduction is made for depreciation or obsolescence.

Replacement cost insurance

Protection which pays the cost to restore or replace damaged or destroyed property without deduction for depreciation. Automatically included in homeowners forms.

(See actual cash value.)

Replacement ratio

A calculation used by agents and insurers to determine how many new business premiums need to be written to replace premiums lost by cancellation, placement with another carrier, nonrenewal, and attrition.


Describes a legal action that is initiated in order to make a claim for personal property.

Reporting policy (or form)

A policy in which the policyholder is required to report the values of a property insured to the company at certain intervals. A provisional premium is charged initially, and the final premium is determined by applying the rate to the average of the values reported.

(See open policy, and adjustable policy.)


Information communicated by the prospective insured to an insurer which will influence the latter's underwriting decision.

Reproduction cost

The amount it would cost to replace or reproduce damaged property or goods with the same type and quality. This may apply to both real and personal property.

Res ipsa loquitur

A Latin term meaning "the thing speaks for itself." As the term relates to liability insurance, it suggests that the act or occurrence causing injury or damage would most likely not have happened except for the negligence of the tortfeasor.


The action taken by an insurer to void an insurance contract. Most often fraud or material misrepresentation is the impetus for the rescission action.

Reservation of Rights

Describes a notice that a company sends to a client. It allows a company to investigate a claim or being defending an insured, without forfeiting its right to deny coverage or a legal defense if it later finds that the claim does not qualify protection.


An amount representing a liability of an insurer.

(See unearned premium reserve, and loss reserve.)

Reserve premium

The portion of each premium collected by the insurer that must be set aside in reserves to pay claims. Reserve requirements are set by the state jurisdictions of the states the insured is licensed in.

Residence employee

An employee whose duties are in and around the insured premises.

Residual disability benefit

Most disability insurance plans pay only when a person is totally disabled (as defined by the policy). A person may be able to work part-time or at another less demanding job during recovery. Policies that provide partial disability benefits pay a percentage of the total benefit for these partial disabilities.

(See also partial disability benefit.)

Residual disability income policy

A health or disability policy providing income protection for insureds that experience reduced income when returning to work after an accident or illness, either because they are unable to return to work on a full-time basis or are unable to fulfill the duties of the previous occupation and must take a lesser paying position.

Residual market mechanism

An arrangement, either voluntary or required by law, among participating insurers in which applicants for a certain type of insurance who are unable to secure protection in the open market (hard-to-place risks) may be covered by such participating insurers.

Residual value insurance

A type of business risk faced by leasing parties which involves the property being returned at the end of a lease having less market value than assumed when the agreement was written. Example: A car leasing agreement assumed that, after one year, the vehicle would be worth $10,000 but it ends up with a value of $7,200. Residual value insurance protects a lessor against such value shortfalls.


The lending of money on cargo being shipped overseas at a higher rate of interest than otherwise, the difference to compensate the lender for the provision that no repayment was expected if the voyage failed. If the loan was on the vessel, the arrangement was called bottomry. Thus, respondentia was an early form of cargo insurance, and bottomry was an early form of hull insurance.

(See bottomry.)

Restoration premium

Once a policy has exhausted its full or aggregate annual limits in claims and benefit payments, some policies will allow the option of restoring the limits for an additional premium charge, called the restoration premium.


1) Money earned or lost by an insurer in its underwriting operations, as distinguished from money earned or lost in the investment of assets.

2) Earned premiums less losses, loss adjustment expenses incurred and other underwriting expenses incurred, usually determined monthly for managerial purposes.

Retail store policy

A package policy for commercial accounts containing four principal sections of coverage: property, liability, crime, and boiler and machinery. The basic policy contains declarations, general provisions, and definitions applicable to these sections; and the specific coverage requirements for each section are handled by separate forms. The types of accounts eligible for this policy can be grouped into eight categories: motel/ hotel, apartment house, office, mercantile, service, industrial, and processing, institution and contractors.

Retainer clause

A clause in reinsurance agreements between ceding insurer and reinsurer which outlines the amount and conditions of the ceding insurer's retention.

Retaliatory laws

Laws, usually referring to taxes, which provide that State A will charge a citizen or a corporation of State B doing business in State A not less than State B would charge one of the citizens or corporations of State A doing business in State B.


1) The amount which an insured or an insurer assumes as its own liability and which is not insured otherwise.

2) In reinsurance, the amount which a primary insurer assumes for its own account. In pro rata reinsurance contracts, the retention may be a percentage of the policy limit. In excess of loss contracts, the retention is a dollar amount of loss.

(See net retention, and net line.)

Retention clause

A clause in a policy of reinsurance by which the ceding company agrees to retain for its own account a certain part of the line.

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 insurance retention group or IRG.

Retirement annuity

A specific type of annuity designed to provide benefits to the annuitant once a specific retirement age has been reached.

Retirement income policy

A specific type of income/annuity policy designed to provide the annuitant retirement income once a specific retirement age has been reached.

Retiring from a line

The act of an insurer in canceling an existing line or declining to renew it.

Retroactive conversion

A provision in some term life insurance policies that allows the use of the original date of the term when converting to a whole or permanent cash value life policy.

Retroactive date

The earliest date for which coverage is afforded under a claims-made form. Usually the effective date of the first year of such policy form provided to the insured.

(See claimsmade.)

Retroactive insurance

The promise of an insurer, made after the occurrence of bodily injury and/or property damage, to pay up to a specified maximum legal liability of the insured ensuing from such injury or damage.


In reinsurance transactions, when a reinsurer cedes all or a portion of assumed insurance to another reinsurer, the ceding reinsurer is known as the retrocedent.


The transaction whereby a reinsurer cedes to another reinsurer all or part of the insurance it has assumed.

(See specific retrocession, and blanket retrocession.)


The name given a reinsurer who assumes reinsurance cessions from another reinsurer.

Retrospective rating

A plan under which the premium is determined after the policy has expired based on contractual factors, chiefly the loss experience of the insured during the policy term. Designed to encourage safety by the insured and to compensate the insurer if larger than expected losses are incurred.

Return commission

When a policy is canceled, the company returns the unearned premium to the insured. An agent is under contractual obligation to refund the unearned portion of the commission and, as a matter of business practice, a broker does likewise.

Return for no claim

Certain policies, for example, marine insurance covering yachts, provide for a refund of part of the premium in the event that the policyholder makes no claim for loss during the term of the policy. In the standard yacht policy, the refund may be a percent, such as 20%.

Return on equity

A ratio derived by dividing an operation's net income by its total equity. Measures profitability by showing how efficiently invested capital is being used.

Return premium

That part of a premium returned to an insured upon cancellation or partial cancellation of a policy, when rate adjustments are necessary, or when an advance premium is in excess of the actual premium.


Reviewing a risk that has already been issued an in-force to determine if it is still acceptable.

Reverse competition

Intensive competition among insurers for the services or influence of insurance intermediaries in an insurance transaction, such as the agent, broker, finance companies, or banks. Since insurers are forced to pay higher compensation for these services, reverse competition generally results in higher insurance costs for consumers.

Revocable beneficiary

Unless an irrevocable beneficiary is named, the owner of a life insurance policy can change (revoke) any beneficiary designation at any time.

(See also beneficiary.)


Registered Health Underwriter designation sponsored by the National Association of Health Underwriters. Headquarters: Washington, DC.


(See Racketeering-Influenced Corrupt Organizations Act.)


Another word for endorsement.

(See attachment, and endorsement.)

Right of salvage

A right an insurance company acquires to property for which it has paid an insured in full for its loss or destruction. Sale of the salvaged property helps an insurer recover some of its costs.
RIMS--Risk and Insurance Management Society, Inc.

Previously known as American Society of Insurance Management, Inc. (ASIM). Formed in 1950, a nonprofit association dedicated to the advancement of professional standards of risk management. RIMS sponsors educational programs and maintains relationships with insurers, brokers, rating organizations, and regulatory and governmental bodies. Headquarters: New York, NY.


Violent and tumultuous actions by a number of people, coverage for which is included in the extended coverage endorsement.

Riot and civil commotion insurance

Insurance against damage done by rioters or those engaged in civil commotion, included in the extended coverage endorsement to the standard fire policy.

(See civil commotion.)

Riparian property

Structure or building that's located over water, connected to a bank or shoreline, such as a wharf, dock or boathouse; the property owner does not own the area (water space) over which the property is situated.

Riparian rights

A person who has the right to use a waterway because he or she owns the property located on the bank or shore.

RIRB--Railroad Insurance Rating Bureau

A rating bureau which rates railroad property and files with state insurance departments on behalf of its member companies and subscribers.


1) Defined variously as uncertainty of loss, chance of loss, or the variance of actual from expected results. However defined, its existence is the reason people buy insurance.

2) The subject matter of an insurance contract such as the building, cargo or liability exposure insured.

Risk and Insurance Management Society, Inc. (RIMS)

Previously known as American Society of Insurance Management, Inc. (ASIM). Formed in 1950, a nonprofit association dedicated to the advancement of professional standards of risk management. RIMS sponsors educational programs and maintains relationships with insurers, brokers, rating organizations, and regulatory and governmental bodies. Headquarters: New York, NY.
Risk avoidance

(See avoidance of risk.)

Risk-based capital

A method for determining adequacy of capital created by the National Association of Insurance Commissioners. It requires insurers to determine their proper amount of capitalization according to the level of risk found in their investments and the lines of business written.

Risk management

The active identification, evaluation and management of all of the potential hazards and exposures to loss a risk may experience. The handling of those exposures is not limited to insurance options, but includes a variety of methods such as alternative financing, retention, reduction, elimination, transfer, and/or any combination of methods.

Risk manager

The person or manager in charge of the active identification, evaluation, and management of all of the potential hazards and exposures to loss a risk may experience. The handling of those exposures is not limited to insurance options, but includes a variety of methods such as alternative financing, retention, reduction, elimination, transfer, and/or any combination of methods.

Risk mapping

A method (inherently subjective) of identifying and ranking various kinds of risks (or loss exposures) that are faced by a given organization. Typically, such risks are evaluated by organizational leadership and it should include the likelihood of risk occurrence as well as its impact on business operations.

Risk 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.

Risk 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.

Road hazard

In reference to automobile insurance, it means losses that are typically caused by the routine operation of a motor vehicle that are not covered, such as damage to tires caused by potholes.

Road rage

Refers to violence associated with the anger and stress generated by modern traffic conditions. It typically involves one driver aggressively pursuing, shooting at, colliding with or otherwise insulting or abusing another vehicle, person or object.
Roadside assistance

Refers to supplemental or optional insurance coverage against the cost of handling vehicle breakdowns, particularly roadside repairs, towing, and related extra expense (taxis, vehicle rental, emergency lodging, etc.).


The taking of property by violence or threat of violence.
Rolling stores

Vehicles that have been either specially built or customized in order to act as a mobile, retail food or specialty product site. Typically, they are subject to restrictive underwriting and/or rating since, by their nature, they are heavily exposed to contact with pedestrians (shoppers, etc.)

Rolling wrap-up

A wrap-up covering many projects for a single sponsor.


1) When an agent moves a book of business from one carrier to another.

2) When an individual transfers his/her vested interest and funds from one retirement plan to either an IRA or to another plan. In order to avoid taxes or IRS penalties, rollovers must be between qualified plans and must conform to specific guidelines regarding when, how, how much and how often such rollovers may occur.

RPG (risk 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.


Registered Professional Liability Underwriter designation sponsored by the Professional Liability Underwriting Society. Headquarters: Minneapolis, MNw.

Ruin Theory

A concept describing an insurer's vulnerability to insolvency, caused from too much growth in premium writings in relation to its policyholder surplus. Because an insurer must use its policyholder surplus (the difference between its assets and liabilities) to put new business on the books, the amount of its policyholder surplus is a limit to its growth.


In a reinsurance contract, there may be a termination provision to require a reinsurer to continue the liability for any losses that may occur to policies still in force at the time the contract terminates, until those policies expire.

Running down clause

The clause in an ocean marine hull policy which covers damage done to another ship by collision, and other property damage caused by collision.

RVI (residual value insurance)

A type of business risk faced by leasing parties which involves the property being returned at the end of a lease having less market value than assumed when the agreement was written. Example: A car leasing agreement assumed that, after one year, the vehicle would be worth $10,000 but it ends up with a value of $7,200. Residual value insurance protects a lessor against such value shortfalls.