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  • Uberrimae fidie
  • UL--Underwriters Laboratories, Inc.
  • Ultimate mortality table
  • Ultimate net loss
  • Ultralight aircraft
  • Umbrella liability insurance
  • Umpire
  • Unallocated benefit
  • Unallocated claim expense
  • Unallocated funding
  • Unauthorized insurance
  • Unauthorized insurer
  • Unbundled services
  • Underground storage tank (UST)
  • Underinsurance
  • Underinsured motorists coverage
  • Underlying insurance policy
  • Underlying limits
  • Underwriter
  • Underwriters Adjusting Company
  • Underwriters Laboratories, Inc. (UL)
  • Underwriters Salvage Company of Chicago
  • Underwriters Salvage Company of New York
  • Underwriters Service Association
  • Underwriting
  • Underwriting association
  • Underwriting capacity
  • Underwriting department
  • Underwriting edits
  • Underwriting income
  • Underwriting margin
  • Underwriting profit or loss
  • Underwriting reserves
  • Underwriting year
  • Underwriting year experience
  • Unearned premium
  • Unearned premium reserve
  • Unemployment compensation
  • Unemployment insurance
  • Unfair claims practice
  • Unfair discrimination
  • Uniform Building Code
  • Uniform forms
  • Uniform premium
  • Unilateral contract
  • Uninsurable risk
  • Uninsured motorists coverage
  • Union liability insurance
  • Unisex legislation
  • United States Aircraft Insurance Group (USAIG)
  • Universal life insurance
  • Universal Mercantile Schedule
  • Universal variable life insurance
  • Unlevel commission system
  • Unoccupied building
  • Unreported claims
  • Unsatisfied Judgment Fund
  • Unscheduled personal property
  • Unscheduled premium payments
  • Unscheduled property floater
  • Usage
  • USAIG--United States Aircraft Insurance Group
  • Use and occupancy
  • UST--underground storage tank
  • Usual, customary and reasonable fees
  • Usual ranges
  • Utility services coverage
  • Utilization review
  • Utmost good faith

Uberrimae fidie

Literally, of the utmost good faith. The basis of all insurance and reinsurance contracts. Both parties to the contract are bound to exercise good faith and do so by fully disclosing all information material to the proposed contract.

UL--Underwriters Laboratories, Inc.

A nonprofit organization which maintains an extensive laboratory for testing the safety of electrical products and other devices, authorizing the use of the "UL" symbol on the device to indicate approval. Headquarters: Northbrook, IL.

Ultimate mortality table

A type of mortality table or listing of data showing the death rates of persons of each sex at each age used, which is used in life insurance to calculate the premiums charged. This particular type of table has been manipulated to correct or compensate for any possible adverse selection by eliminating the use of incredible or undeveloped data.

Ultimate net loss

In liability insurance, the amount an insured is obligated to pay because of settlement or adjudication.

Ultralight aircraft

A gasoline powered aircraft weighing 160 pounds or less resembling in appearance its motorless cousin, the hang glider. Humorously referred to as an airborne lawnmower.

Umbrella liability insurance

A form of liability insurance protecting policyholders for claims in excess of the limits of their primary automobile, general liability and workers compensation policies, and for some (few) claims excluded by their primary policies which are subject to a deductible, which may range from $250 for a personal umbrella to a minimum of $10,000 for a commercial umbrella.


1) A person selected by two appraisers to help settle disputes in property insurance claims. The appraisers are chosen by the disputing company and claimant, and a decision of any two of the three is binding. For example, if a company and claimant fail to agree on actual cash value of property destroyed or the amount of the loss, many policies provide that these be determined by appraisal.

2) A similar person in an arbitration proceeding under a reinsurance contract.

Unallocated benefit

When referring to unallocated benefits in a health insurance policy, they are those benefits that are not scheduled or limited by individual types of expenses. All reasonable expenses are covered up to a specified amount.

Unallocated claim expense

General expenses that are not a result of any one particular claim but, rather, are a part of the administrative or overall business costs of a claims operation.

Unallocated funding

The insurance company does not allocate employer contributions to any one employee account. At retirement of an individual, the insurer takes a lump sum out of the general account and purchases an annuity to fund the individual's retirement benefit.

Unauthorized insurance

Insurance written by an insurer not licensed by the country or state in which the risk is located.

Unauthorized insurer

Insurer that is not licensed by the country or state where the risk is located.

Unbundled services

A range of services related to insurance that some insurers or their subsidiaries offer their policyholders but that can be separated (or unbundled) from the insurance transaction. Examples: management services for captives, pools and self-insurers, claim services, actuarial services and statistical information, and loss control services.

Underground storage tank (UST)

The EPA has developed financial responsibility requirements with respect to owners and users of specific types of underground storage tanks that contain petroleum products or other hazardous chemicals.


Insurance which is insufficient in amount to cover a loss which the policyholder may suffer.

Underinsured motorists coverage

Coverage an insured may purchase to protect his or her own self from damage or injury caused by a negligent party who does not have adequate limits of insurance to cover the loss.

Underlying insurance policy

The basic or primary layer of coverage, the initial policy that will respond to the covered loss. Only when the limits of the underlying policy have been exhausted, will the other respective layers of insurance respond, as with the case of an excess or umbrella policy in liability insurance.

Underlying limits

1) In the case of liability excess or umbrella policies, it refers to the limits of the primary (underlying) policy below the excess or umbrella policy which will respond first to loss. Many excess or umbrella policies have established minimum limits for underlying policies. Should the underlying policy not meet the minimum limit requirements, the excess or umbrella will not be offered.

2) With respect to reinsurance, it is the amount that must be exhausted on the underlying coverages or policies before the reinsurance coverage will go into effect.


One who accepts or rejects risks for an insurer (originally, by writing the person's name under the contract of insurance being issued).

Underwriters Adjusting Company

A large company-owned adjustment bureau operating on a countrywide basis. Headquarters: Picataway, NJ.

Underwriters Laboratories, Inc. (UL)

A nonprofit organization which maintains an extensive laboratory for testing the safety of electrical products and other devices, authorizing the use of the "UL" symbol on the device to indicate approval. Headquarters: Northbrook, IL.

Underwriters Salvage Company of Chicago

Appraises damaged, insured merchandise, including disposal, for the benefit of insurers. Headquarters: Elk Grove Village, IL.

Underwriters Salvage Company of New York

Assists insurance companies in adjustment of losses through the reclamation, reconditioning and disposition of damaged merchandise. Headquarters: Clifton, NJ.

Underwriters Service Association

A group of insurers banded together to write industrial risks on a pool basis, supplying the needed engineering services and inspections jointly. Similar to the Factory Insurance Association, but normally writing risks less highly protected than those in the F.I.A. Headquarters: Chicago, IL.


The process of selecting, classifying, evaluating, rating, and assuming risks.

Underwriting association

A joint insurance or underwriting operation in which the participant insurers assume a predetermined interest in all business written. Pools are managed by professionals with expertise in the classes of business undertaken. The members share proportionately in the premiums, losses, expenses, and profits. An "association" or a "syndicate" is synonymous with a pool.

(See syndicate.)

Underwriting capacity

This is the maximum amount of financial risk an insurer or a reinsurer is willing to assume in the event of a single loss or for a given period of time. With respect to the insurance industry, underwriting capacity may not necessarily be at the discretion of the insurance company but may be influenced or controlled by the regulations that apply to the insurance industry based on the capacity of the insurance company.

Underwriting department

The department or group of employees responsible for the process of selecting, classifying, evaluating, rating, and assuming risks.

Underwriting edits

Account or risk elements selected by an insurer as evaluation points. Most often associated with automated underwriting systems (AUS).

Underwriting income

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

Underwriting margin

A computation used predominantly by property and casualty insurers to determine the amount of underwriting loss or gain--based on 100% being the break-even point. Any time the total loss ratio and expense ratio versus the amount of premium written is less than 100%, it is indicative of an underwriting profit. If over 100%, it shows an underwriting loss. For example, an insurer with an expense ratio of 32% and a loss ratio of 66% or a total underwriting expense of 98% shows a 2% underwriting profit.

Underwriting profit or loss

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.
Underwriting reserves

(See unearned premium reserve and loss reserves.)

Underwriting year

The year commencing with the effective date of a policy or with the renewal date of that policy, to be distinguished from the calendar year, which always starts from January 1. A term of particular importance in the collection of loss statistics.

Underwriting year experience

The statistical segregation of all premiums and losses attributable to policies having an inception or renewal date within a given 12-month period. Accident year experience is the statistical matching of all losses occurring (regardless of when the losses are reported) during a given 12-month period of time, with all premium earned (regardless of when the premium was written) during the same period of time. Calendar year experience, on the other hand, is the statistical matching of all losses incurred (not necessarily occurring) within a given 12-month period, usually beginning on January 1, with all premium earned within the same period of time.

Unearned premium

The portion of the premium representing the unexpired portion of the policy term.

Unearned premium reserve

The sum of all the premiums representing the unexpired portions of the policies which the insurer has on its books as of a certain date. It is usually calculated by a formula of averages of issue dates and the length of term. The reserve is equivalent to the amount of return premium due policyholders if the insurer should terminate the insurance.

(See equity in unearned premium reserve, and reserve.)

Unemployment compensation

Federal and state programs designed to provide income compensation for a limited period of time for employees who are temporarily out of work. The program is financed by a combination of mandatory employer and employee payroll taxes.

Unemployment insurance

A federally designed option available to finance the employer's portion of the cost of unemployment compensation for specific, qualified operations. This option allows the employer either to self-insure and/or to purchase available specialty insurance, usually available on a stop loss or excess of loss basis.

Unfair claims practice

Illegal and intentional claims handling practices used by insurers in order to avoid a claim, reduce the amount of a claim, or delay payment of a claim for an unreasonable period of time. Insureds have recourse through their state insurance departments in addition to legal action, should this occur.

Unfair discrimination

Treating an applicant for insurance differently than other insureds because of any factor not related to the applicant's loss producing or expense producing qualities, such as charging a higher rate, among other possibilities, 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.

(See classification, redlining, anti-discriminatory laws, discrimination, and selection.)

Uniform Building Code

A code established by the International Conference of Building Officials that specifies acceptable/approved building processes, materials and structural designs.

Uniform forms

A form, a policy or other document used to write insurance, which has been adopted and is used by a large number of companies or which has been promulgated by a rating bureau or legislature. The use of standard forms does away with much of the need to scrutinize every word of a policy form for meaning, since the standard has been examined and adjudicated by courts. Also known as standard forms.

Uniform premium

When the same set of rates or premiums applies to all insureds; a program with no differences based on age, sex, or occupation. Often found in group life and health insurance programs.

Unilateral contract

A unilateral contract is one where the entire context and content of the contract is drawn by one party. The second party has only the option to accept or not accept the contract as written. The insurance policy is considered to be this type of contract. Any unclearness or ambiguity in such contracts is construed to be the fault of the party drawing the contract; and, therefore, legal interpretations of such will go against the drawer of the contract (the insurer) and in favor of the other party (the insured).

Uninsurable risk

Those cases where a risk cannot be insured because the possibility of or frequency of loss is so high, or the cause of loss considered illegal, criminal, or against public policy.

Uninsured motorists coverage

Under an auto policy, protection for the insured against bodily injury or property damage (in some states) caused by the negligence of an uninsured or underinsured motorist.

Union liability insurance

A form of errors and omissions (E&O) coverage that protects against loss triggered by the action(s) of a union (as an entity and that appears on the policy) and its authorized representatives.

Unisex legislation

In some jurisdictions, legislation has been passed which prohibits the use of an individual's gender when developing insurance classifications, rates, or coverages. All persons falling into a category must be given the same rates and coverages.

United States Aircraft Insurance Group (USAIG)

A multi-company aviation pool writing a substantial volume of most types of aviation coverages, both domestic and international. Founded in 1928. Headquarters: New York, NY.

Universal life insurance

A combination of monthly term life insurance plus possible savings in an arrangement that provides limited flexibility as to death benefits and premium payment.

Universal Mercantile Schedule

A method of making fire insurance rates which is the basis of many of the methods in use, particularly in the east.

Universal variable life insurance

A type of life insurance program that combines coverage, options, and/or benefit features of both universal life and variable life insurance policies. The insurer may select options regarding the investment of both the policy premium and any interest or dividends earned.

Unlevel commission system

A commissions payout system where first year commissions are a higher percentage of the premium than renewal commissions.

Unoccupied building

A building whose occupant(s) is temporarily absent, but in which the occupant's furniture and personal effects remain, as opposed to a vacant building, which has neither occupants nor contents.

Unreported claims

Unreported claims are those where the damage or injury has already occurred, but an actual claim has not been made or reported to the insurer. Occurs often in the liability lines. Insurers have set up designated funds to handle these claims called incurred but not reported (IBNR) reserves.
Unsatisfied Judgment Fund

Refers to those states that have created and maintained funds to compensate auto accident victims that have been unable to collect from the responsible party.

Unscheduled personal property

Refers to any and all covered contents which are not itemized on a list with specific amounts of insurance assigned.

Unscheduled premium payments

A universal life program option in which an insured may make additional, unscheduled premium payments to the policy which will be used to increase investment income for the insured.

Unscheduled property floater

A primarily personal inland marine insurance designed to provide blanket special or "all-risk" property coverage on all related property of a certain type.

Means the primary purpose for which a given vehicle is operated. Such as pleasure use (all use is personal), commuting (traveling to and from work) or for business.

USAIG--United States Aircraft Insurance Group

A multi-company aviation pool writing a substantial volume of most types of aviation coverages, both domestic and international. Founded in 1928. Headquarters: New York, NY.

Use and occupancy

A term used to describe some time element coverages that pay for loss of earnings when business operations are curtailed or suspended due to property loss as a result of an insured cause of loss. This coverage is now obsolete and has been replaced by a more comprehensive and generic business income insurance.

(See time element insurance, and business income insurance.)

UST--underground storage tank

The EPA has developed financial responsibility requirements with respect to owners and users of specific types of underground storage tanks that contain petroleum products or other hazardous chemicals.

Usual, customary and reasonable fees

A term used in health and dental insurance programs to designate what the insurer has determined to be the fair and reasonable cost of a given service in the territory in which the insured is located.

Usual ranges

The measurements within which the key financial ratios of an insurer may fluctuate and still pass the tests of the NAIC Insurance Regulatory Information System.
Utility services coverage

Insures against loss to a building, personal property or of business income caused by an interruption to power, water or communication services that are supplied by an off-site entity.

Utilization review

Part of the managed care process in health insurance where an individual person's case is reviewed to determine whether the treatment was adequate or excessive. This review can be conducted prospectively, e.g., in an AIDS case to set parameters for future treatment, or retrospectively to determine how efficiently the treatment was handled.

Utmost good faith

Insurance policies are called "contracts of utmost good faith" because they depend upon each party being completely honest. Insurance applicants must tell the insurer every fact that is relevant to their seeking insurance. This information is needed to determine whether an applicant qualifies for insurance and how much premium should be charged.