SUBJECT INDEX
Absolute liability, 483
ACA. See Patient Protection and Affordable Care Act of 2009
Accidental death and dismemberment, 356–357
Accidental death benefit, 271–272
Accident, duties, 543
Accommodation risks, 135
Accountable Care Organizations (ACOs), promotion, 400
Accounting for Certain Investments in Debt and Equity Securities (FASB Statement No. 115), issuance, 145
Accounts receivable, 572
securitization, credit insurance, 614
Accumulation need, estimation, 197
Accumulation units, 313
CREF value, 314t
Acquisition expense, 88, 89, 129
Activities of daily living (ADLs), 402
defining, 406
self-maintenance activities, 405
Act of God bonds, 155
Additional Living Expense, 440
Additional Medicare Tax, 206–207
Additional purchase option, 272
Add-on coverage, 520
Adjustable life insurance, 233
Adjusted gross income (AGI), 206, 327
sum, 211
Adjusters, 138
public adjusters, difference, 138
Adjustment. See Loss adjustment bureaus, 138
Administrative expenses, 88, 89
Administrative-services-only (ASO) agreement, 416
Administrator's bond, 612
Admitted assets, nonadmitted assets (difference), 145
Admitted insurer (licensed insurer), 74–75
Admitted liability, 604
Advisory Commission on Consumer Protection and Quality in Health Care, 369
Advisory Council on Social Security report, 215–216
Affordability See Insurance problems, causes, 123–124
public choice, 125
Agency department, 133
Aggregate stop-loss, 416
Aging population, health care, 378
Agreed Value optional coverage, 564
Aid to Families with Dependent Children (AFDC), 372
Aircraft
admitted liability, 604
liability, 498
liability insurance, 604
peril, coverage, 453
Aleatory contract (insurance), 173
Alien insurer, 74
Alimony-entitled spouse, policy owner, 304–305
Alimony-obligated spouse (premium-paying spouse), life insurance policy ownership, 305
All Industry Model Rating (NAIC development), 110
Allocated funding instruments, 422
All-Terrain Vehicle Policy, 546
American agency system, 82
American Association of Insurance Services (AAIS), 85, 509
American College of Life Underwriters, 87
American International Group (AIG)
Financial Products Division (AIG-FP), OTS regulation, 104
insurance operations, threat, 103–104
Americans with Disabilities Act, 221
American Taxpayer Relief Act of 2012 (ATRA-2012), 400
American Taxpayer Relief Act of 2013 (ATRA-2013), 194
America's Health Insurance Plans (AHIP), 87
Annual income, economic value, 187t
Annual Statement (NAIC), 151
Annual Statement Blank (NAIC), 144
Annual Transit Policy, 570–571
retirement age, 314
definition, 308
federal estate tax, impact, 311
financed purchases, 299
future obligations, 305
future value, 342t
payments, 345t
premature withdrawal (early withdrawal), 310–311
principle, impact, 308
specialized annuities, 311–315
Annuity principle, 196
Anti-insurance bias, 23
Antiquity, insurance, 72
Antitrust Modernization Commission (AMC) report, 114
A posteriori probabilities, 37
Apparent authority (ostensible authority), 165
Appeal bonds, 612
Appleton Rule (New York), 74
Appraisal provision, 443
Approved amount, 393
Armstrong Committee Investigation, 100
Armstrong, William W., 100
Assessment coverage, 457
Assets
admitted assets, nonadmitted assets (difference), 145
reserve, 151
Assisted Living Care Coverage endorsement, 459
Assumption-of-risk doctrine, 217
Attachment bonds, 612
release, 612
Auto Choice Reform Act of 1997, 524
Auto Dealers Coverage Form (ADCF), 600
Automatic benefit increase, 356
Automatic convertible term, 283
Automatic premium loan, 267–268
Automatic treaty, 153
Automobile
coverage, 513
insurance, 513
medical payments coverage, 513
no-fault benefit laws, 522t physical damage coverage, 513
shared market, 85
Automobile insurance, 46
medical payments coverage, 549
perspective, change, 526
physical damage coverage, 549–550
premiums, differences, 525–526
traditional system, criticisms, 519
Availability. See Insurance problems, causes, 122–123
Average indexed monthly earnings (AIME), 207
Aviation exclusions, 258
Aviation insurance, 604
Avoidance. See Risk technique, 17
Bail bond, 613
Bailee customer policy, 603–604
Balanced Budget Act of 1997 (BBA-97), 372, 389, 400
Bank Holding Company Act, 84
Bankruptcy, 544
legal liability, 490
Banks, insurance (relationship), 84–85
Base beneficiary premium, 399
Base period, 200
Basic extended reporting period, 593
Beach and windstorm pools, 85–86
Beneficiary
classification, 255
designation, 255
Benefit-certain contracts, 249–250
Benefit representatives, 137
Benefits
adoption, impact, 210
coordination, 375
disability benefits, 209
marriage, relationship, 210
receiver, divorce, 210
Benefit-uncertain contracts, 249–250
Bid bond, 611
Blackout period, 190
Blanket bonds, 574
Blanket insurance, 561
Blue Cross and Blue Shield (Blues), 366
associations, 78
plans, 367
policy development, 393
BMW of North America, Inc. v. Ira Gore, 484–485
Bobtailing, 601
Bodily injury, 270
Boiler and machinery insurance, 553, 565–568
deductibles, 567
equipment breakdown insurance, 46
Bonding, classes, 47
Bottomry contracts, 72
Brand and Labels coverage, 567
Breakdown, definition, 566
Broad-Form Theft Coverage Endorsement, 464–465
Builder's risk coverage form, 562
Builder's Risk Form, 562
Building and Personal Property Coverage Form (BPP), 555–561
construction cost, increase, 556
debris removal, 556
Earthquake and Volcanic Eruption Form, 558
electronic data, 556
equipment breakdown, 558
fire department service charges, 556
functional building valuation endorsement, 560
functional personal property valuation, 560–561
loss, causes
basic form, 557
special form, 558
manufacturer's selling price clause, 561
mortgage holders condition, 558
non-owned detached trailers, 557
optional coverages, 560
ordinance/law coverage endorsement, 560
outdoor property, 557
pollutant cleanup/removal, 556
property off premises, 557
property, preservation, 556
provisions, 558
specialized valuation endorsements, 560–561
Spoilage Coverage, 558
storage units property, 557
vacancy condition, 558
valuation condition, 558
Bureaus, 138
Burglary robbery and theft insurance, 46
Bush Commission to Strengthen Social Security, 216
Business
activities, 499
continuation insurance, 427–428
definition, 499
firms, package policies, 578–579
floater forms, 570
floater policies, 571
government control, approaches, 96–97
income, 567
forms, 563
interruption insurance, 563
operations, resumption, 563
life insurance, specialized uses, 427–430
necessity, 419
operations, conduct, 586
personal property, 555
Business Auto Coverage (BAC) form, 597–599
coverage territory, 598
medical payments, 598
physical damage coverage, 598
uninsured motorists coverage, 598
Business Income Coverage (And Extra Expense) Form, 563
Business Income Coverage (Without Extra Expense) Form, 563
Business Income from Dependent Properties endorsement, 564
Businessowners Policy (BOP), 578–579
liability coverage, 579
Business Pursuits Endorsement, 499
Cafeteria employee benefit plan, 426–427
California, Proposition, 103, 121–122
California Supreme Court Decision, 121–122
territorial rating issue, 122
Cancelable health insurance policy, 358
Capital conservation, capital liquidation (difference), 191, 193
Capital liquidation, capital conservation (difference), 191, 193
Capital needs analysis, 193
Capital retention strategy, capital liquidation strategies (difference), 343
Capital stock insurance companies, 75
Capitation, 367
payment, 78
Captive
tax treatment, 68
Captive agents, 82
Captive insurance companies, 67–68
Capture theory of regulation, 96–97
Career average salary plans, 319, 320
Cargo insurance, 568
Caribbean Catastrophe Risk Insurance Facility (CCRIF), 158
Caribbean Community (CARICOM), 158
Carnegie Foundation, retirement programs, 313
Cash flow plans, 67
Cash-flow underwriting, 91
Cash needs, 189
Cash payment policies (insurance contracts), 169, 170
Cash plans (Section 401k plans), 321–322
Cash refund annuities, 310
Cash-refund contract, 311
Cash surrender value, policy provision, 266
Cash value corridor test, 229–230
satisfaction, 284
Cash value insurance
protection/savings, 226
term insurance, difference (reasons), 226
Cash value life insurance, forms (difference), 248–249
Cash value policies, 225
reserve accumulation, 248f
Cash values, availability, 290t
Casual employees, 219
Casualty insurance, 73
Casualty insurers, 73
Catastrophe bonds (cat bonds), 155–156
activity, 156
Catastrophe futures/options, 156–157
Catastrophe insurance futures, CBOT trading, 157
Catastrophe insurance options (PCS options), 157
Catastrophe modeling (cat modeling), ratemaking (relationship), 132
Catastrophic loss, avoidance, 42
Catch-up deferrals, 324
Causes of loss
basic form, 557
special form, 558
Ceding company, 153
Center for Medicare and Medicaid Innovation, 400
Certainty, decision making, 55
Certified Professional Public Adjuster (CPPA), 138
Cession, 153
Charitable institutions, liability, 482
Chartered Life Underwriter (CLU), 87
Chartered Property and Casualty Underwriter (CPCU), 87
Chicago Board of Trade (CBOT), catastrophe insurance futures trading, 157
Chicago Mercantile Exchange (CME), hurricane futures/options trading, 157
Chicago Mercantile Exchange Hurricane Index (CHI), 157
Childless couple, lifestyles, 188
Children
benefits, 208
Children's Health Insurance Program (CHIP), 371, 372, 382
Choice no-fault, 520
ChoicePoint, 136
Civil actions, 481
Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA), 372–373
Civil Rights Act of 1964, Title VII, 418
Claim expenses, 504
Claim representatives, 137
Claim reserves, 147
Claim settlement, action, 138
Class action, 491
Class Action Fairness Act of 2005 (CAFA), 491–492
Class rates, 130
Cleanup fund, 189
Cold Storage Locker Bailee Floater, 604
Collapse additional coverage, 442
Collateral assignment, 256
Collateral source rule, 485
College Retirement Equity Fund (CREF), 313
accumulation unit, value, 314t
value, 344
Collegia, 72
Collision coverage, 540
Columbia Report (1932), 519
Combination Umbrella and Following-Form Excess, 605
Combined income, 211
Combined ratio, 150
Commercial automobile insurance, 553
Commercial Crime Discovery Forms, 574
Commercial Crime Loss Sustained Forms, 574
Commercial general liability (CGL) coverage, 587
claims-made version, occurrence form (comparison), 592–593
contractual liability, 592
Coverage B (Personal and Advertising Injury Liability), 591
Coverage C (Medical Payments Coverage), 591–592
defense costs, 592
general coverages, 594
occurrence-first-reported coverage, 593–594
policy limits, 592
portfolio liability coverages, 594–595
Commercial insurance
companies, 366
Commercial liability insurance, 553
Commercial property coverage
Commercial property direct loss coverages, 554–562
Commercial property insurance, 553–554
Commissioners Standard Ordinary (CSO) tables (mortality tables), 241
female lives, 243t
male lives, 242t
Commissions, 129
Committee bonds, 612
Commodities Futures Modernization Act, 104
Common Declarations, 553
Common disaster clause, 273
Comparative negligence, 489
Competent parties (enforceable contract requirement), 165–166
Competitive rating systems, 110
Completion bond, 611
Compliance risk, 15
Comprehensive losses, 540
Comprehensive Loss Underwriting Exchange (CLUE), 135
Comprehensive major medical expense insurance, 373, 374f
Comprehensive Personal Liability (CPL) coverage, 495–507
nature, 496
Compulsory auto insurance system, 526
Computer fraud, 577
Concealment, 176
Concealment or Fraud provision, 445
Concurrent causation exclusions, 450–451
Conditional binding receipt, 254
Conditional contract (insurance), 173
Conditionally renewable health insurance policy, 358
Conditions (insurance contracts), 178
Condominium Association Coverage Form, 562
Condominium Commercial Unit-Owner's Coverage Form, 562
Consideration (enforceable contract requirement), 165
Consignment floaters, 571
Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA), 371
Consultants, impact, 81
Consumer-directed health care, 369–370
Consumer-directed health plan (CDHP), 369
Consumer Information Source (CIS), NAIC maintenance, 108
Consumer Option for an Alternative System to Allocate Losses (COASTAL), 470–471
Consumer Price Index (CPI), 205
benefits, increase, 214
inflation, indication, 338
Contingency contract, 134
Contingent beneficiary, 255
Contingent business income, 567
Contingent business interruption, 564
Contingent Deferred Annuities Working Group (NAIC), formation, 315
Contingent deferred annuity (CDA), 315
Contingent employer liability, 424
Contingent liability, 587
Continuous premium whole life insurance, 231
Contract bonds, 611
Contract of adhesion (insurance), 173
Contract of indemnity, life insurance (difference), 225
Contract of utmost good faith (insurance), 173
Contractual liability, 501–502
Contributory negligence, 216–217, 488–489
Conversion provision, impact, 230–231
Convertible term life insurance, 230–231
Coordination of benefits provision, 375
Corporate for Relief of Poor and Distressed Presbyterian Ministers, 73
Corporate-owned life insurance (COLI), 429–430
Corpus (trusts), 195
Corridor test. See Cash value corridor test
percentages, 230t
Cost-based pricing, social pricing (difference), 120
Cost-benefit analysis, 55
Cost-of-living adjustments (COLAs)
benefits, 356
provision, 320
Cost-of-living riders, 274
Counterfeit money, coverage, 441
Coverage for Damage to Your Auto, 539
Covered equipment, defined, 566
Covered expenses, categories, 392
Covered property, inclusion, 566
Credibility factor, 132
Credit card, unauthorized use, 441
Credit default swaps (CDSs), usage, 104
Credit for Reinsurance Model Act and Regulation (NAIC), 105
Credit history, examination, 136
Credit information, usage (regulation), 137
Credit insurance, 46
Credit life insurance, 234, 236–237
growth, 237
Crime insurance, 553
Critical insurance, 60
Critical risks, 28
Cross-subsidies, 124
Current assumption whole life (CAWL) insurance, 285
Currently insured status, 205, 206
Cyber liability insurance, 595–596
Cybersecurity insurance (cyber insurance), 46
Deadheading, 601
Dealers forms, 570
Death benefits, 220–221, 328. See also Retirement plans
Death probability, 198t
Death tax (federal estate tax), 193–195
Debris removal, 556
coverages, flood insurance, 469
Debris Removal additional coverage, 440–441
Debt securities, amortized value (usage), 145
Decision making, 55
Declarations (insurance contracts), 178
Deductibles, advantages, 61
Defensive medicine, 378
Deferred annuities, 309
Deferred compensation, 429
Deferred plans (Section 401k plans), 321–322
Deficit Reduction Act of 2005 (DRA-05), 408–409, 424
Defined benefit final-average-salary plans, 320
Defined benefit pension plan, 318–319
accounting, 425
advantages, 319
forfeitures, 319
job mobility, 319
Defined contribution pension plan, 318, 420
advantages, 319
annual addition, 324
forfeitures, 319
job mobility, 319
shift, 320
Delay clause, 267
Demutualization companies, 76
Dental expense insurance, 375–376
Dependency period, income needs, 190
Dependents, annual income (economic value), 187t
Deposit administration plan, 422
Desirable insurance, 60
Destructive-competition rationale, 98–99
Diagnostic-related groups (DRGs), 400
Difference-in-Conditions coverage, 572
Diminished value exclusion, 542
Direct damage equipment coverages, 566–567
Directors and Officers Errors and Omissions insurance, 595
Disability
coverage
amount, limitations, 353
difference, 350
extent, 350
limitation, 351
approaches, 354
living death, 349
occupational-nonoccupational disability, 352
presumptive disability, 356
probability, 198t
programs, 49
recurrent disability, 352
retirement risk, impact, 361
Disability determination services (DDSs), 209
Disability income
accidental death/dismemberment, 356–357
automatic benefit increases, 356
elimination periods, 352
guaranteed insurability option, 356
cost-of-living adjustment benefit, 356
coverage needs, determination, 361
insurance, programming/buying, 360–363
loss, amount (determination), 355–356
loss of earnings approach, 354
needs, 361
policies
creation, 352
premium, waiver, 357
protection, sources (evaluation), 361–362
rider, 271
social insurance, coordination, 357
taxation, 362
Disability income insurance, 348–351
insurers, types, 349
marketing methods, 349
occupational classes, 351
requirement, 349
underwriting, 341
Disability income needs. See Unmet disability income needs
determination, 199
meeting, resources, 199
Disaster clause (time clause), 273
Discharge of mechanic's lien bond, 613
Disciplined current scale, 298
Discounted income flows, 184
Discovery coverage, 573
Discretionary groups, 235
Dishonest insurance coverage triggers, 573–574
coverage, continuity, 574
discovery period, 573
Distress risk companies, 519
Distress terminations, 424
Dividends
accumulation, 151
Divorce, income needs, 188–189
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) (DFA), 85, 106–107, 316
Dollar-a-day policy, 517
Domestic credit insurance, 614
Domestic insurer, 74
Donut hole, 398
Double indemnity, 271
Dread-disease policy, 375
Drug formulary, 376
Dual eligibles, 397
Durable medical equipment (DME), 391
Dwelling
forms, 463
policies, personal liability supplement, 465
program theft endorsements, 464–465
Dwelling Property 1 Basic Form, 463
Earned premiums, concept, 147
Earnings, indexing, 207
Earthquake and Volcanic Eruption Form, 558
Earthquake Endorsement, 458
Economic feasibility, 43
Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA-2001), 195, 320, 325, 418, 419
Economic value, 187t
Educational organizations, 87
Elective deferrals, limit, 324
Electronic data processing (EDP) policy, 572
Electronic fund transfer card/access device, coverage, 441
Elimination periods, 352
Emergency funds, purpose, 189
Empirical probabilities, 37
Employee benefit plan provisions, 576
cafeteria employee benefit plans, 426–427
defined benefit plans, accounting, 425
funding
501(c)(9) trust, usage, 416–417
group life/health insurance, 414–415
group ordinary life insurance, 414
group paid-up life insurance, 414–415
group term life insurance, 414
group universal life, 415
longevity risk transfer, 425–426
Employee crime coverages, 574–576
Employee, definition, 575
Employee dishonesty insurance, 47
Employee Retirement Income Security Act of 1974 (ERISA), 317–318, 320, 370
impact, 417
pension plan termination insurance, 423–425
preemption, 416
Employee stock ownership plan (ESOP), 322
Employer group Medicare coverage, 391
Employer-provided health insurance, 370–371
Employer self-insured plans, 370–371
Employers liability, 495, 583–585
law, 216
Employer-sponsored insurance benefits, prevalence, 413
Employer-sponsored plans, types, 318
Employment earnings, retirement funding source, 337
Employment practices liability coverage, 595
Endowment life insurance, 225, 233–234
policies, issuance, 234
Enforceable contract
Enterprise risk management, 15–16, 104–105
Entity plan, 428
Equal Opportunity Act, 137
Equipment breakdown insurance (boiler and machinery insurance), 46
Equipment Breakdown Protection Coverage Form, 565–566
Equipment Dealers Coverage Form, 571–572
Equipment floaters, 571
Equitable Society for the Assurance of Life, 73
Equity-indexed annuities, 312
Equity index universal life insurance, 277
Errors and omissions insurance, 507, 508
Essential health benefits, 383
Essential insurance, 60
Estate liquidity need, 193
Estate recovery, 409
Estate taxes, 328
Evaluation. See Risk implication, 28
Event, probability (determination), 36–38
Excess liability
umbrella liability contracts, difference, 605
Excess-loss reinsurance, 153
Excess-of-loss treaty, 154
Excess-over-other-insurance clause, 171
Excess Umbrella Liability Policy, 605
Exclusion ratio, 327
Exclusions (insurance contracts), 178
Exclusive agents, 82
Exculpatory clauses, 171
Executive Life, seizure, 293
Executor's bond, 612
Expanded first-party/add-on benefit laws, 522t
Expanded first-party/add-on coverage, 520
Expected loss ratio, 129
Expenses incurred, 148
Expenses, revenues (matching), 146
Experience rating, 131
Explosion, coverage, 452
Export credit insurance, 614
Export-Import Bank, 79
Exposure checklists, 27
Express authority (stipulated authority), 164
Extended Business Income, 563
Extended nonowned coverage, 545
Extended term insurance, 266–267
Extra expense insurance, 563–564
Extra risk policies (rated policies), 134
Facility, 518
Facultative treaty, 153
Fair Access to Insurance Requirements (FAIR) plans, 85, 121, 562
Fair Credit Reporting Act (FCRA), 137
Fair Isaac Corporation (FICO) scores, 136
Fair rate of return, 121
Family income policy, 281, 281f
Family income rider, 281
Family protection policy, 281–282
popularity, 282
Family purpose doctrine, 514
Fathers, benefits, 208
Fayol, Henri, 20
Federal Crime Insurance Program, 80
Federal crop insurance, 79
Federal Department Insurance Corporation (FDIC), 51
Federal Emergency Management Agency (FEMA), 466
Federal estate tax (death tax), 193–195
annuities, relationship, 311
Federal Flood Insurance Program (residential property limits), 467t
Federal Insurance Contribution Act (FICA) tax, 205–206, 324
Federal Insurance Office (FIO), creation, 107
Federal insurance regulation
control, varieties, 115
public choice, 116
state insurance regulation, difference, 113–116
Federal Motor Carrier Safety Administration (FMCSA), 600–601
Federal poverty level (FPL), 372
Federal private (voluntary) insurance programs, 79–80
Federal public guarantee insurance programs, 51–52
Federal Riot Reinsurance Program, 80
Federal Terrorism Reinsurance, 79–80
Federal Terrorism Reinsurance Act (TRIA), 79–80
Federal TRICARE programs, 372–373
Fee for service, 366
Fee-for-service coverage, 366
Fee-for-service program, 396
Fellow servant rule, 217
Fidelity Bankers Life, failure, 293
Fidelity bonds, risk transfer device, 47
Field underwriter, 134
File-and-use laws, 111
Final average salary plans, 318
Financed purchases, 299
Financial Accounting Standards Board (FASB), Statement No. 115 (issuance), 145
Financial Analysis Division (FAD), 103
Financial Analysis Solvency Tracking (FAST), 103
Financial Analysis Working Group (FAWG), 103
Financial guaranty insurance (FGI), 616–617
financial crisis, 617
Financial Industry Regulatory Authority (FINRA), 313, 316
Financial planners, impact, 81
Financial Regulation Standards Accreditation Program (NAIC), 106
Financial responsibility laws, 515
Financial Services Modernization Act, 84
Financial Stability Oversight Council (FSOC), 107
Fire and allied lines, 554
Fire department service charge, 441, 556
Fire legal liability, 591
Fire Legal Liability Insurance, 502
Fire/lightning, coverage, 452
First aid expenses, 504
First Capital Life, failure, 293
First-dollar coverages, 376
First-surplus treaties, 153
Fixed-dollar annuities, variable annuities (difference), 309
Fixed period, installments, 259–260
Flexible spending accounts, 427
Flex-rating, 110
Floaters, 471
agreement, 468
compliance cost, increase, 469
debris removal/coverages, 469
personal property, 469
rate maps, 467
Flood Insurance Rate Map (FIRM), 470
Flood Insurance Reform Act of 2012, 470–471
Floor of protection, 214
Flowcharts, usage, 27
Following-Form Excess Liability Policies, 605
Foreign insurer, 74
Foreign trade credit insurance, 614
Forgery coverage, 441
Franklin, Benjamin, 73
Fraternal insurers, 76
Fraud tax, 523
Free-bite laws, 515
Free of Capture and Seizure, 568
Freight insurance, 568
Friendly fire, hostile fire (difference), 452
Full-time equivalent employees (FTEs), penalty assessment, 381–382
Full value reporting clause (honesty clause), 561
Fully insured status, 205, 206
Functional building valuation endorsement, 560
Functional personal property valuation, 560–561
Fundamental risk, 6
Funded retention program, 62
Fund for last expenses, 189
Funding, term (usage), 420
Furriers Block Policy, 571–572
Furrier's Customer Policy, 604
Future benefits, present value, 249
Future income needs, determination, 191, 334
Future interest gifts, representation, 196
Gambling, insurance (relationship), 41
Garagekeepers Coverage Form, 599–600
Garnishment bonds, 612
Gatekeeper, 367
Gender-neutral rating, 119–120
General administrative expenses, 129
General agents, 81
General Agreement on Tariffs and Trade (GATT), 424
General damages, 484
General liability, 495
Generally accepted accounting principles (GAAP), 145
statutory accounting, difference, 145–146
General theft exclusions, 453
Generation-skipping transfers, 194
Gift tax, 194
Glass Coverage Form, 562
Glass or Safety Glazing Material additional coverage, 442
Glass-Steagall Act of 1933, 84
Global systemically important insurers (G-SIIs), identification, 117
Go-Cart Liability Policy, 546
Government bodies, liability, 482
Government insurance programs, 118–119
Government-sponsored entities (GSEs), mortgage insurance writing, 617–618
GPS-Based Teen Driver Pilot Program, 525
Grace period (life insurance contracts), 257
Graded annuity payments, 345t
Graded payment method, 344–345
Graded-premium whole life insurance, 283
Gramm-Leach-Bliley Act (GLBA), 84, 107
impact, 113
Grave markers, coverage, 443
Great Code of Hammurabi, 72
Gross domestic product (GDP)
growth, 400
health care percentage, 378
Gross estate, 194
impact, 195
Gross national product (GNP), 377
Gross premium, 129
Gross rate, 129
calculation, 130
Group annuities, 309
Group Annuity Mortality (GAM 83) Table (1983), 424
Group deficit annuities, 422
Group life insurance, 234, 235–236
coverage, 236
groupings, 235
importance, 236
Group ordinary life insurance, 414
Group paid-up life insurance, 414–415
Group permanent plans, 422
Group term life insurance, 414
Group universal life, 415
Guaranteed insurability option, 272–273, 356
Guaranteed investment contracts (GICs), 421–422
Guaranteed issue, 379
Guaranteed living benefits (GLBs), 315
Guaranteed minimum death benefits (GMDBs), 315
Guaranteed minimum withdrawal benefits, 315
Guaranteed renewability, 379
Guaranteed renewable health insurance policy, 358
Guaranteed replacement cost, 437
Guaranteed values, table, 265t
Guardian's bond, 612
Guest hazard statutes, 514–515
Guideline premium test, 229
Gybbons, William, 73
Halley Edmund (mortality table), 73
Hazard
groups, 507
risk, difference, 5
Hazardous substances, 567
Health care
access, 377
aging population, 378
benefits, coordination, 375
capacity excess, 378
costs, 378
taxes, relationship, 377
financing, public sector, 371–373
Health expense associations, 78
Health insurance, 45, 348, 376–377. See also Employer-provided health insurance
continuance provisions, 357–358
coverage, type, 370t
creation, 371
first-dollar coverages, 376–377
historical development, 366–368
Health insurance policies
continuance provision classification, 358
limitations, prescription drugs, 376
options, 360
Health Insurance Portability and Accountability Act of 1996 (HIPAA), 369, 380, 384, 407
Health Maintenance Organizations (HMOs), 78, 367
contracts, 374
plans, 396
Health organizations, payments, 397
Health Reimbursement Arrangement (HRA), 369
Health Savings Account (HSA), 369
High Deductible Health Plans (HDHPs), 368, 369
High-risk drivers, insurance, 517–519
High-risk plan, 420
Hired autos, inclusion, 597
Hold-harmless agreements, 20
Home care benefits, inclusion, 404
Home Day Care Coverage endorsement, 500
Home health care, 390
Medicare payment, 403
Homemaker spouse, employment ability, 190
Homeowners 2 Broad Form, 448–449
Homeowners 3 Special Form, 449–454
Homeowners 4 Contents Broad Form, 454–455
Homeowners 5 Comprehensive Form, 455–456
Homeowners 6 Condominium Unit-Owners Form, 456–457
coverage, 546
Homeowners 8 Modified Coverage Form, 457–458
Form 8 loss settlement provisions, 457–458
Homeowners Coverage C: Personal Property Perils Insured, 452–454
Homeowners deductible premium credits, 476
Homeowners forms, difference, 448–458
Homeowners policy
Section I, 504
Section II conditions, 505–506
Homeowners policy coverage, 476–477
Homeowners policy program, 432–433
characteristic, 433
Coverage A: Dwelling, 434, 436
Coverage B: Other Structures, 436
inflation, impact, 437
personal property coverage, 437–440
replacement cost coverage, 436
Homeowners Scheduled Personal Property Endorsement, 471–472
Homeowners Section I coverage, 433–443
dwelling/structures, coverage, 434–437
perils insured, 434
Homeowners Section I optional coverages, 458–459
endorsements, 459
Honesty clause (full value reporting clause), 561
Hospice care, 390
Hospital Insurance (HI)
coverage (Medicare Part A), 391–392
tax, addition, 206
Hovercraft liability, 498
Hull insurance, 568
Hurricane futures/options, CME trading, 157
Hurricane Katrina, losses, 132
Hutton Life, UL insurance (introduction), 232
Immediate annuities, deferred annuities (difference), 309
Immediate participation guarantee (IPG) plans, 422
Implied authority (incidental authority), 164–165
Implied powers, 164
Important insurance, 60
Important risks, 28
Imputed liability, 485
Incidental authority (implied authority), 164–165
Incidents of ownership, 195
Income deductions, 152
Income-earning spouse, coverage, 304
Income loss, amount (determination), 355–356
Income needs, 189
dependency period, 190
divorce, relationship, 188–189
future income needs, determination, 191
representation, 190
Income replacement coverage, 354
Incontestable clause, 256
Indemnity, 568
life insurance, difference, 225
coverage, 366
partial indemnity, 218
periods/limits, 564
Independent adjusters, usage, 138
Independent agents, 82
Independent Payment Advisory Board (IPAB), 400
Indeterminate premium policies, 285–286
benefit structure, 285
interest-sensitive whole life insurance, 285
Index annuities, 312
Index universal life (UL) insurance (equity index universal life insurance), 277
Indirect loss
boiler and machinery coverages, 567
commercial property coverage, 563–565
Individual annuities, group annuities (difference), 309
Individual life insurance, 234–235
Individual policy pension trust, 422
Individual Retirement Accounts (IRAs), 215, 318, 328–331
establishment, 369
partial IRA rollovers, 330
portable pensions, 330
eligibility, 329
nondeductible contributions, 329
Individual, risk management (difference), 24
Industry loss warranties (ILWs), 157–158
Infants, liability, 482
Inflation
rate, CPI indication, 338
Inflation-adjusted future income needs, present value, 192t
Inflation-adjusted retirement need projection, 341t
Inflation Guard Endorsement, 437
Informational filing, 111
Information technology (IT), advances, 120
Inherited property, basis, 194
Initial reserve, 247
Injured party, negligence, 488–490
Injury, definition, 353
Inland marine coverage (individual), 471–475
coverage, scope, 472
fine art/antiques, 473
golfer's equipment, 472
personal furs, 472
postage stamps, 473
silverware, 472
valuation options, 472
Inland marine forms, 572
Inland marine insurance, 45–46, 569–572
controlled/uncontrolled forms, 570
property, classes, 569
Innkeepers Liability Policy, 604
Insolvencies, control, 105–106
Installment annuities, 309
Installment refund annuities, 310
Installments-of-fixed-amount option, 260
doctrine, usage, 167
question, 225
Insurable risk
securitization, 155
Insurable value, calculations, 291
Insurance. See Self-insurance
affordability
aleatory contract, 173
anti-insurance bias, 23
availability
plan, necessity, 60
cash-flow underwriting, 91
competition, intensity (evidence), 90
competitive industry, hallmarks, 90
concealment, 176
conditional contract, 173
consultants, usage, 81
contract of adhesion, 173
corporate combinations, 83
cost-based approach, 119
courts, impact, 178
coverage, ACA expansion, 381
cross-subsidies, 124
defined, 35
derivatives, 155
destructive-competition rationale, 98–99
direct response distribution, 82
economic feasibility, 43
educational organizations, 87
exchanges, 78
expenditures, priority ranking, 60
similarities, 52
financial planners, usage, 81
gambling, relationship, 41
gender-neutral rating, 119–120
groups, systemic risk, 106–107
incorporation location, classification, 74–75
last resort, 61
licensing, classification, 74–75
management, risk management (difference), 20–21
mandated underwriting losses, 118
market
subsidies, 118
marketing
Internet, impact, 83
misrepresentation, 174
multiple-line transition, 74
operation, factors, 133
optional coverages, 61
personal contract, 172
policies
personal contract rule, application, 172
classification, 74
program, 189
public guarantee programs, usage, 52
quality competition, 89
reporting, 103
retention, selections (consideration), 61–62
selection, considerations, 61–62
severability, 506
shared markets, 118
social pricing, 119
subsidies, income redistribution effects, 122
suretyship, difference, 610–611
transfer/pooling, selection, 41
unilateral contract, 172
vested-in-the-public-interest rationale, 98
Insurance companies
cost, 65
costs, 88
examination, 103
groups, 83
policyholders, treatment, 65
Insurance Company of North America, 73
cash payment policies, 169, 170
complexity, 178
conditions, 178
declarations, 178
exclusions, 178
insuring agreement, 178
legal characteristics, 166–178
parol evidence rule, 177
parts, 178
policy construction, 178
reasonable expectations, 177–178
valued policies, 169
laws, 170
Insurance-encouraged utilization, 379
Insurance industry
market structure, 90
profitability, 92
Insurance-linked securities (ILS), 155, 157–158
Insurance Marketplace Standards Association (IMSA), 300
Insurance purchasing groups, 69
Insurance regulation
economic theories, 96
executive branch regulation, 102
federal control, varieties, 115
federal regulation
public choice, 116
state regulation, difference, 113
global influences, 117
goals, 99
judicial branch regulation, 102
legislative branch regulation, 101–102
market failure theory, 96
National Association of Insurance Commissioners (NAIC), impact, 102
post-Civil War change, 100
public choice theory, 97
state regulation
continuation, 115
federal regulation, difference, 113–116
modernization, NAIC efforts, 115–116
public choice, 116
support, arguments, 114
Insurance Regulatory Information System (IRIS), 103
Insurance Service Office (ISO), 85, 509, 553
Breakdown Protection Coverage Form, 565–566
Commercial Umbrella Liability Coverage Form, 606–607
Crime Insurance Program, 574
Insured periods, injuries, 502–503
Insureds
duties, 506
financial loss, measurement, 169
property ownership, 502
severability, 497
status, requirement, 209, 210t
Insurers
accounting functions, 140
consumer complaints/assistance, 108
diversity state preference, 112
engineering functions, 140
enterprise risk management, 104–105
file-and-use laws, 111
filing, absence, 111
financial analysis, 103
functions, 128
impairments, 91t
informational filing, 111
investment function, 128, 139–140
investment, percentage composition, 140
investments, 105
legal functions, 140
liability rates, regulation, 110–112
ownership, legal form classification, 75–80
policy forms, usage, 108
prior approval system, 110–111
privacy, GLBA (impact), 108–109
property rates, regulation, 110–112
rates, regulation, 109
rating, 294
agencies, rating categories, 64t
reinsurance, 105
reserves, regulation, 105
retrospective rating plans, 141
state insolvency funds, 106
trade profit, 150
Insuring agreement (insurance contracts), 178
Integration (permitted disparity), 325
Intentional loss, 450
Intentional torts, 481
Interest
current rate, 315
life insurance ratemaking element, 240, 241, 244
maintenance reserve, 151
option, 259
rates, present value, 185t
Interest-adjusted cost index, calculation, 296
Interest-sensitive whole life insurance, 285
Internal communication system, usage, 27
Internal explosion, 463
Internal Revenue Code (IRC), 159
gift exemptions, 196
requirements, 343
service tax code, 275
International Accounting Standards Board (IASB), creation, 117
International Association of Insurance Supervisors (IAIS), core principles, 116
International Financial Reporting Standards (IFRS), adoption, 117
International Monetary Fund (IMF), country compliance assessment, 117
Internet, insurance marketing (relationship), 83
Interstate compact, 116
living trusts, 196
Inventory Shortage Exclusion, 575
Investment
accumulation, 336t
results (property and liability insurer), 149–150
risk, 319
tax treatment, 336
Investment generation method (IGM), 286
partitioned-portfolio IGM, 286
Investor-initiated life insurance, 299–300
Investor-owned life insurance (IOLI), 299–300
Invitees, 487
Irrevocable beneficiary designation, 255
Irrevocable inter vivos trust, 196
Irrevocable life insurance trust (ILIT), 196
Jewelers Block Policy, 571
John Hancock Mutual Life Insurance Co. v. Harris Trust & Savings Bank, 422–423
Joint-and-last-survivor annuity, 309
Joint-and-several liability, 486
Joint and survivor income option, 260
monthly payments, 261t
Joint-and-survivor option, requirement, 326
Joint life annuities, 309, 310, 345
Joint mortgage protection policy, 280
Joint underwriting associations, 518
Judgment rating, 130
Junk bonds (unrated bonds), 293
appeal, 285
Keogh plans, 322
Key-person insurance, 428
King, Jr., Martin Luther (assassination), 120
Labor and materials payment, 611
Landlord's Furnishings additional coverage, 442
Large employer penalties, 381–382
Last clear chance, doctrine, 489–490
Last-in first-out (LIFO) treatment, 284
Law coverage endorsement, 560
Law of averages, 196
dual application, 40
Leasehold interest coverage, 564–565
Legal form (enforceable contract requirement), 166
Legal hazard, 5
Legal liability, 481
bankruptcy, 490
Legal object (enforceable contract requirement), 165
Level premium
understanding, absence, 282
plan, 228
costs, prepayment (effect), 247
Liability
absolute liability, 483
joint-and-several liability, 486
Liability-driven investing (LDI), 425
Liability insurance, 45–47, 494–495, 585–595
coverage range, 46
types, 496
Licensed insurer (admitted insurer), 74–75
Licensees, 487
Lienholders Single Interest Endorsement, 466
Life and Longevity Markets Association (LLMA), formation, 426
Life annuity, 196
function, 308
installment distributions, 344
Life-contingency risk, 340
Life income
single life, 261t
period certain, 260
refund option, 260
straight life income, 260
Life insurance, 45
accelerated benefits, 407
advantage, l292
choices, 291
collateral assignment, 256
contract of indemnity, difference, 225
cost-comparison techniques, 297
difference, investment, 290–291
existence (United States), 237
financed purchases, 299
industry, reform initiatives, 300
insurable interest, requirements, 168
interest-adjusted method, 296–297
investor-owned life insurance, 299–300
IRC definition, 284
level premium, concept, 227–228
long-term investment, 292
low-load/no-load life insurance, 286
need, measurement, 196
overcharge, return, 295
ownership clause, 255
partial loss, possibility, 225
policies
elimination, 229
types, availability, 294
premium payment options, 297
probabilities, 250
proceeds, creditor rights, 274
purchase
amount, 187
reinsurance, 154
securitizations, 156
specialized business use, 427–430
special policy forms, advantages/disadvantages, 286–287
surplus drain, 152
tax code definition, 276
tax-free exchanges, 303
trust agreement, 196
types, 238
Life insurance companies, 150–152
cost difference, comparison, 295
federal income taxes, 159
financial strength/integrity, 293–294
net-cost comparisons, traditional system, 295
policies, types (availability), 294
Life insurance company taxable income (LICTI), 159
Life insurance contracts
automatic premium loan, 267–268
aviation exclusions, 258
clause, 254
cost-of-living riders, 274
disaster clause, 273
extended term insurance, 266–267
grace period, 257
inception, 254
incontestable clause, 256
installments (fixed amount), 260
installments (fixed period), 259–260, 259t
joint and survivor income option, 260
life income with refund option, 260
misstatement of age clause, 256–257
paid-up reduced amount, 266
policy loan provisions, 267
policy proceeds, taxation, 262
settlement, optional modes, 259
settlement options, policy proceeds (taxation), 262
specialized life contracts, 279–286
suicide clause, 258
war clause, 258
Life Insurance Illustration Questionnaire, 30
Life Insurance Illustrations Model Regulation (NAIC), 298–299
Life Insurance Solicitation Model Regulation (NAIC), 296
Life insurers
assets, 150
valuation reserve, 151
dividends, accumulation, 151
financial problems, 293
income, 151
deductions, 152
interest maintenance reserve, 151
policyholders, surplus, 151
principles-based reserving (PBR) system, 151
regulation, rules-based system, 150–151
unpaid claims, reserves, 151
Life settlement, 299
Lifestyles, needs approach, 188
Limited health insurance policies, 375
Limited own occupation, 354
Limited-payment whole life insurance, 231–232
Limited-payment whole-life policy, 231–232
Limited Theft Coverage Endorsement, 465
Litigation bonds, 611, 612–613
Living benefits, 407
Living trusts (inter vivos trusts), 196
Loading, 129
Loading (life insurance ratemaking element), 240, 241
Loan transactions, limitations, 328
Longevity, 181
Long-term care (LTC)
exposure, 402
development, 403
life insurance accelerated benefits, 407
limited-payment (limited-pay) policy, 405–406
needs, Medicare inadequacy, 402–403
partnership programs, 409
policies
benefit limits, 404
elimination periods, 404
inflation protection, 405
lapses, 405
nonforfeiture provisions, 405–406
renewability, 405
services, 427
Long-term disability (LTD)
coverage, short-term disability (difference), 350
plans, elimination periods, 352
policies, provisions, 353
writing, 352
Long-term investment (life insurance), 292
adjusters, 138
claim settlement, action, 138
expense, 88
investigation, 139
payment/denial, 139
Loss assessment
share, 469
Loss Assessment coverage, 442
Losses. See Incurred losses
catastrophic loss, avoidance, 42
illustrations, 505
other than by collision, 539–540
payment, 542
predictability, homogeneous exposure (impact), 42
production, risk (impact), 42
proof, 139
sharing, 34
Loss of earnings approach, 354
Loss-of-income protection, 198
Loss of Use coverage, 440
Loss settlement, 443
difficulties, 139
Loss severity
increase, 10
Loss sustained forms, 574
Loss-to-a-Pair-or-Set clause, 443
Loss unit, concept, 29
Lost instrument bond, 613
Low-cost auto insurance policies, 516–517
Low-income beneficiaries, Medicare assistance, 399
Low-load insurance, 286
Lump-sum death benefit, 208
Lump-sum distribution, 327
Mail Coverage Form, 571
Malpractice insurance, 507–508
Managed care
dominance, 368
plans, 368
Managed care organizations (MCOs), 367–368
Mandated underwriting losses, 118
Manufacturers Output Policy, 572
Manufacturer's selling price clause, 561
Market failure theory of regulation, 96
Market-value-adjusted annuities, 312
Material fact, 174
McCarran-Ferguson Act (Public Law 15), 101
repeal
states-rights issue, 115
Mean reserve, 247
Means test, usage, 48
Medicaid
benefits, 372
expansion, 381
maintenance of effort requirements, 381
spousal impoverishment provisions, 408–409
statutory restrictions, 408
Medical expense, 219
Medical Information Bureau (MIB), 135
Medical malpractice pools, 86
coverage, 475, 513, 536–537, 549
insurance agreement, 536
Medical technology improvement, 378
Medicare, 50, 366–367, 388–402
claims/charges, assignment, 392
costs
deceleration, 400
coverage. See Employer group Medicare coverage.
enrollment periods, 390
federal standards, 395
low-income beneficiaries assistance, 399
Part A (Hospital Insurance Coverage), 389, 391–392
costs, assistance, 399
Part B (Supplementary Medical Insurance) (SMI), 389, 392–393
costs, assistance, 399
premiums, modified AGI (impact), 390t
Trust Fund, 401
Part C (Medicare Advantage), 395, 396–397
plans, types, 396
Part D (Prescription Drug Coverage), 397–399
base beneficiary premium, 399
costs, assistance, 399
stand-alone plans, 398
Prescription Drug Benefit, 398f
Prescription Drug Programs (PDPs), 395, 397–399
formulary, 398
program, 371
comparison, 394t
regulation, NAIC model act, 393
traditional program Medicare supplement policies, 393–396
Trust Funds, 401
trust funds, Trustee warnings, 399–400
Medicare Advantage (MA), 395, 396–397
plans, types, 396
Medicare benefits, 205
Medicare Catastrophic Coverage Act (MCCA), 391
Medicare+Choice, 396
Medicare Medical Savings Account (MSA) plans, 396, 397
Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA-2003), 389, 394, 397
Medicare Special Needs (MSN) plans, 396, 397
Medicare Supplement (MedSupp), 402
Medigap
insurance, regulation, 393–394
Mentally incompetent, liability, 482
Merritt Committee Investigation, 100–101
Merritt, Jr., Edwin A., 100
Minimax regret strategy, 57
Miscellaneous bonds, 611, 613–614
Miscellaneous Type Vehicle Endorsement, 546
Misrepresentation (insurance), 174–175
doctrine, 174
Mississippi rule, 489
Misstatement of age clause, 256–257
eligibility, 465
personal property, coverage, 466
property removal, 466
Model Group Life Insurance Law (NAIC), 235
Model Holding Company Act (NAIC), 103
Model Holding Company Act and Regulation (NAIC), 104
Model Life Insurance Solicitation Regulation (NAIC), 110
Model Policy Loan Interest Rate (NAIC), 267
Model regulation, purposes, 298
Model Replacement Regulation (NAIC), 299
Modified adjusted gross income, 206, 211
Modified endowment contracts (MECs), 284
Modified Loss Settlement Endorsement, 464
Modified no-fault proposals, 520
Modified own occupation, 353
Modified whole life insurance, 283
Monarch Life Insurance, failure, 293
Money-Operated Devices exclusion, 577
Money purchase plans, 318
Monoline fire dwelling program, 463–465
dwelling forms/homeowner forms, difference, 464
dwelling program, 463
forms, endorsements, 464
eligibility, 463
Monoline organization, 74
Morale hazard, 5
potential, 353
Moral hazard, 5
Mortality (life insurance ratemaking element), 240, 241
Mortgagee
clause, 444
obligations, 444
Mortgage guaranty insurance, 617–618
Mortgage loan insurance, 79
Mortgage payment fund, 189
Mortgage redemption policy (mortgage protection policy), 280, 280f
Mothers, benefits, 208
Motor Carrier Coverage Form (MCCF), 600–601
Motor Carriers Insurance for Non-Trucking Use, 601
Motor home endorsement, 547
Motor Truck Cargo liability policy, 602
Motor Truck Cargo Owner's Policy, 571
Motor Truck Cargo policies, 602
Motor vehicle liability, 497–498
Moving Ahead for Progress in the 21st Century (MAP-21), 420, 424
Multiple employer welfare arrangements (MEWAs), 370–371
Multiple-line transition, 74
Multiple-line underwriting, 74
Mutual fund, wrapping, 315
Mutual insurance companies, 75–76
Mutual insurance holding companies, 76
Named non-owner policy, 545–546
Named-peril coverage, 45
Name schedule bonds, 574
National Association for the Advancement of Colored People (NAACP), 121
National Association of Insurance Commissioners (NAIC)
All Industry Model Rating (development), 110
Annual Statement, 151
Annual Statement Blank, 144
Contingent Deferred Annuities Working Group, formation, 315
Credit for Reinsurance Model Act and Regulation, 105
Financial Regulation Standards Accreditation Program, 106
Life Insurance Illustrations Model Regulation, 298–299
Life Insurance Solicitation Model Regulation, 296
Model Group Life Insurance Law, 235
Model Holding Company Act, 103
Model Life Insurance Solicitation Regulation, 110
Model Policy Loan Interest Rate, 267
Model Replacement Regulation, 299
Nationwide Marine Insurance Definition, 569
Privacy of Consumer Financial and Health Information Model Regulation (adoption), 109
RBC standards, development, 104
regulation impact, 102
Securities Valuation Office (SVO), 105
Senior Protection in Annuity Transactions Model Regulation, 316–317
Standard Valuation Law, 150–151
state accreditation program, 106
Suitability in Annuity Transactions Model Regulation, 317
Uniform Accident and Sickness Policy Provision Law (UPPL), 358
uniform provisions, inclusion, 358
Valuation of Securities Task Force, 145–146
National Association of Mutual Insurance Companies, 87
National Banking Act of 1864, 84
National Commission on Society Security Reform, 213
National Council on Compensation Insurance (NCCI), 85
National Credit Union Administration (NCUA), 51
National Federation of Independent Businesses (NFIB), ACA lawsuit, 385
National Federation of Independent Business v. Sebelius, 385
National Flood Insurance Program (NFIP), 79, 572–573
financial challenges, 471
initiation, 466
National Flood Insurance Reform Act of 1994, 467–468
Nationwide Marine Insurance Definition (NAIC), 569
Needs
analysis, 187–188. See also Disability risks.
chart, 191f
approach, 191
lifestyles, relationship, 188
estimation. See Accumulation need.
Need test, usage, 48
Negligence, 481
defenses, 488
liability, 482
policy reserves, 247t
Net line (net retention), 153
Net payment cost index, 296–297
importance, 297
Net premiums, comparison, 227f
Net single premium, 229, 244–246
computation process, 245
policy reserve, 247t
New England Life, 73
Newly acquired auto, inclusion, 533
Newly Acquired Building extension, 556
Newly acquired business personal property, 556–557
Newly Acquired Premises Coverage, 566
No Benefit to Bailee provision, 444
No-fault legislation, prospects, 524
No-fault states, cost experience, 523
No-load life insurance, 286
Nominator, 312
Nonadmitted assets, admitted assets (difference), 145–146
Nonadmitted insurer (unlicensed insurer), 74–75
Nonbuilding Replacement Cost, 459
Noncancelable health insurance policy, 358
Nonemployee crime coverages, 576–578
Nonforfeiture value, 228, 264–268
Non-highly compensated employees (NHCEs), eligibility, 322
Non-owned auto, 540
Nonowned automobiles
clarification, 597
physical damage coverage, 541
Non-owned detached trailers, 557
Nonowner autos, physical damage, 540–541
Nonparticipating life insurance, 234
policies, availability, 294
Nonparticipating physicians, 392–393
Nonprofit organization employees, Section 403(b) plans, 323
Nonresidential condominiums, 573
Nonvariable annuities, variable distributions, 344–345
No provision health insurance policy, 358
Nuclear energy pools, 83
Nuclear hazard, 450
Nuclear Hazard clause, 444
Occupational disease, 219
Occupational-nonoccupational disability, 352
Occupying, term (usage), 536
Occurrence-first-reported coverage, 593–594
Ocean marine insurance, 45, 568–569
average conditions, 569
perils insured, 568
warehouse-to-warehouse clause, 569
Offer and acceptance (enforceable contract requirement), 164–165
Office of Thrift Supervision (OTS), 84–85
AIG-FP regulation responsibility, 104
Off-premises theft exclusions, 453–454
Old-age benefits, 205
Old-Age, Survivors, and Disability Health Insurance (OASDHI), 204–106
earnings, indexing, 207
low years, 207
program, Social Security Administration, 206
qualification requirements, 209
self-employment qualification, 205
Trust Funds, 214
Old-Age, Survivors, and Disability Health Insurance (OASDHI) benefits
amount, 207
insured status, requirement, 210t
Old-Age, Survivors, and Disability Insurance (OASDI), 49, 350
system, impact, 401
Old-Age, Survivors, and Disability tax, application, 206
Omnibus Budget Reconciliation Act of 1990 (OBRA), 159, 393–394
Omnibus Budget Reconciliation Act of 1993 (OBRA-93), 409
Open-peril exclusions, grouping, 452
Open rating systems, 110
Operational risk, 15
Optional insurance, 60
Ordinance or Law Enforcement coverage, 566–567
Ordinance or Law exclusion, 442–443
Organization
risk management, contribution, 21–22
Original equipment manufacturer (OEM), 542–543
Ostensible authority (apparent authority), 165
Other insurance, 167
Other-States Insurance, 585
Other suitable occupation, 354
Other than collision, designation, 539–540
Outboard Motor and Boat Policy, 474
Outdoor property, 557
Overseas Private Investor Corporation (OPIC), 79
Owned Motorized Golf Cart (Physical Loss Coverage Endorsement), 459
Ownership
clause, 255
incidents, 195
Ownership of renewals, 82
Own occupation, 353
Own Risk and Solvency Assessment (ORSA), 104–105
Package modification factor, 578
Paid-up reduced amount, 266
Parameter, 37
Parcel Post Policy, 571
Parents, benefits, 209
Parol evidence rule, 177
Partial disability
benefit, 355
residual disability difference, 356
Partial permanent disability, 219, 220
Partial temporary disability, 219, 220
Participating life insurance, 234
contracts, availability, 294
Participating physicians, 392–393
Participating policy, innovations, 286
Participation rate, 277
Particular risk, 6
Partitioned-portfolio IGM, 286
Pascal, Blaise, 56
Patient Protection and Affordable Care Act of 2009 (ACA) (Obamacare), 206, 380–386
impact, 371
individual mandate, 381
large employer penalties, 381–382
Medicaid expansion, 381
objections, 384
PCIP funding, 377
small employer tax credit, 382
Pay-As-You-Drive program, 525
Payoff matrix, 56
Payor clause, 285
PCS options, 157
Pension Benefit Guaranty Corporation (PBGC), 51–52, 320
Pension fiduciary liability, 595
Pension Funding Equity Act of 2004 (PFEA-2004), 420
Pension plans
amortization rules, 421
benefits, 325
restrictions, 421
disability benefits, 326
distribution requirements, 326
high-risk plan, 420
joint-and-survivor option, requirement, 326
period-certain payments, 326
premature withdrawals, 327
qualification requirements, 418–420
Pension Protection Act of 2006 (PPA-2006), 318, 322, 407
penalty-free withdrawal option, 327
Pension Relief Act of 2010 (PRA-2010), 420
Performance bonds, 611
Peril, risk (difference), 5
Perils of transportation, 571
Period certain, 260
Period-certain annuities, 310
Period-certain contract, 311
Period-certain payments, 326
Periodic payments (Social Security), 218
Permanent life insurance (benefit-certain contracts), 249
Permissible loss ratio, 130
Permitted disparity (integration), 325
Permitted Incidental Occupancies, 500
Personal Articles Floater, 471
Personal Automobile Policy (PAP), 529–531
coverage, 532
eligibility, 530
extended nonowned coverage, 545
legal liability, 530
supplementary payments, 535
liability exclusion, 533–535, 547
liability insuring agreement, 531–533
liability limits, 536
premium increases, 548t
miscellaneous type vehicle endorsement, 546–548
motor home endorsement, 547
named non-owner policy, 545–546k
out of state coverage, 535–536
parts, 531
physical damage coverage, 547
physical damage deductible credits, 549t
snowmobile endorsement, 547–548
Personal contract
insurance, 172
rule, application, 172
Personal injury liability endorsements, 506–507
Personal Injury Protection (PIP) coverage, 521
Personal inland marine floaters, 471
Personal liability, 496
endorsements, 506
insurance, cost, 506
Personal-producing general agent (PPGA), 82
Personal property
flood insurance, 469
open-peril coverage, 457
replacement cost, 438
Personal Property of Others, 555
Personal Property Replacement Cost Endorsement, 438
Personal risks, 7
management
steps, 183
Personal savings, retirement funding source, 335–337
Persons with children, lifestyles, 188
Philadelphia Contributorship for the Insurance of Houses from Loss by Fire, 73
Physical damage
coverage, 513, 539–543, 547, 549
Physical hazard, 5
Pittman v. West American Insurance Company, 174
Plate glass coverage, 562
Plumbing/heating, freezing, 454
Point estimate, 37
Point-of-service (POS) plans, 368
Policy construction, 178
Policyholders
runs, 293
treatment, 65
Policy reserves, 105
Pollutant cleanup/removal, 556
Pollution liability insurance coverage, 594–595
Pooling, 154
Pool of money concept, 404
Poor and Distressed Widows and Children of Presbyterian Ministers, 73
Portability, 379
Portfolio average method, 286
Portfolio liability coverages, 594–595
Portfolio program, 553
Position schedule bonds, 574
Post-loss objectives, 24
Post Office insurance coverages, 79
Postretirement death benefits, 325
Postselection underwriting, 135–136
restrictions, 136
Predictive analytics, 524
usage, 137
Preexisting condition exclusions, limits, 379
Preexisting Condition Insurance Plan (PCIP), 377
Preferred Provider Organizations (PPOs), 367–368
plans, 396
Preferred risk, classification, 133
Pre-loss objectives, 24
Premature death, 290
discounted income flows, 184
present value, 184
time value of money, 184
Premature death, risk, 182
identification, 183
Premises and Operations coverage, 586
Premises, ownership/maintenance, 585–586
Premium, 129
provision, disability waiver, 270–271
waiver, 272
Premium nonparticipating rates, protection/cash values, 290t
Premium reserve. See Unearned premium reserve
Premium taxes, 130
credits, 382
imposition, 158
Prepaid insurance premiums, 147
Preretirement death benefits, 325
Prescription Drug Benefit, 398f
Prescription Drug Coverage (Medicare Part D), 397–399
Prescription Drug Plans (PDPs), 395, 397–399
formulary, 398
Prescription drugs, health insurance policies, 376
Present interest, 196
Present value, 184. See also Inflation-adjusted future income needs
Presumptive disability, 356
Price fixing, 85
Primary beneficiary, 255
Primary care physician (PCP), 367
Primary insurance amount (PIA), 207–208
computation, 207
Principles-based reserving (PBR) system, 151
Prior approval system, 110–111
Prior dishonesty clause, 576
Privacy, Gramm-Leach-Bliley Act (GLBA) impact, 108–109
Privacy of Consumer Financial and Health Information Model Regulation (NAIC adoption), 109
Private Fee-for-Service (PFFS) plans, 396–397
Private insurance (voluntary insurance), 44–47
Private insurers
usage, 122
Private passenger automobiles, 530
Private retirement plans, federal regulation, 317–318
Probability
distribution, 37
estimation, accuracy, 40
rankings, 29
Processing floaters, 571
Products and completed operations coverage, 586
Professional liability, 500
Profit and contingencies, allowances, 88, 89
Profit-sharing contract, 134
Profit-sharing plans, retirement funding source, 335
Property and liability companies, federal income taxes, 159–160
Property and liability distribution systems, 82
Property and liability insurance
insurable interest, 167
Property and liability insurers, 147–150
combined ratio, 150
expenses incurred, 148
incurred losses, 147
loss reserves, 148
underwriting profitability, indicator, 150
Property Casualty Insurers Associaton of America, 87
Property Claim Services, 157
Property collapse, 442
Property Coverage Form, 573
form, selection, 476
pricing/cost considerations, 475–476
Property owners, obligations, 486–488
Property rates, regulation, 110–112
Property removal, 441
Property risks, 7
Proportional coverage, excess-of-loss coverage (difference), 615
Proportional reinsurance, 153
Proposition 103. See California
Prospective payment system (PPS), 400
floor, 214
Prudential Insurance Company of America, 313
Public adjuster, difference, 138
Public benefit guarantee programs, 44
Public choice theory of regulation, 97
Public finance insurance, 615
Public guarantee insurance programs, 51
Public guarantee programs, usage, 52
Public Law 15 (McCarran-Ferguson Act), 101
repeal, pressure, 113
Public official bonds, 611, 613
Punitive damages, 484
Purchasing groups, 69
Pure captives, 67
Pure life annuities, period-certain annuities (difference), 310
Pure no-fault proposals, 520
Pure premium, 129
Qualified Disabled and Working Individual (QDWI), 399
Qualified Health Plans (QHPs), 383
Qualified Individual (QI), 399
Qualified Medicare Beneficiary (QMB), 399
Qualified pensions
distributions, taxation, 327–328
retirement funding source, 335
Qualified preretirement survivor, 325
Qualified profit-sharing plan, 321
Qualified retirement plans, 317–328
contributions/benefits, limitations, 323–324
employee contributions, savers tax credit, 325
employer promise, importance, 319–320
permitted disparity, 325
qualification requirements, 318
Quality, insurance competition, 89
Quantitative performance standards, 29–30
Quota share treaty, 153
Railroad retirement programs, 49
Rain insurance, 565
Rate, 129
Rated policies (extra risk policies), 134
actuarial precision, legend, 132–133
catastrophe modeling, relationship, 132
Rating
modification, 131
Rating bureaus, 100
Ratio plan, 233
Reasonable and customary basis, 375
Reasonable expectations, 177–178
Reasonable Repairs Additional Coverage, 441
Rebating, 107
Redetermination provision, 285
Reduced amount provision, paid-up policy, 266
Reduction. See Risk
technique, 17
Reentry provision, 231
Refrigerated Property Coverage Endorsement, 458
Regulation. See Insurance regulation
Rehabilitation benefits, 219, 221, 356
Reinstatement (life insurance contracts), 257
excess-of-loss treaty, 154
pooling, 154
pools, 518
property and liability insurance, 153–154
risk-financing alternatives, 155–158
treaties, types, 153
Reinsurance Association of America (RAA), 87
Relative frequency interpretation, 36
Remaindermen, 195
Removal bonds, 612
Renewable at the company's option health insurance policy, 358
Renewable term life insurance
net premiums, comparison, 227f
policies, 230
Renewals, ownership, 82
Rental unit coverage, 457
Rental value, 563
Repetitive loss structure, 469
Replacement Cost Option, 555
Replacement Cost Settlement for Certain Non-Building Structures, 459
Replevin bonds, 612
Reputational risk, 15
Reserves, 146
accumulation (cash value policies), 248f
regulation, 105
Residential property limits (Federal Flood Insurance Program), 467t
Residual disability
definitions, types, 355
partial disability difference, 356
Resource-Based Relative Value Schedule (RBRVS), 393, 400
Respite care benefits, 392, 404
Respondentia contracts, 72
Retention. See Risk; Unemployment
selection, considerations, 61–62
usage, 17
Retired lives reserve, 415
Retirement
accumulation
outliving, risk, 197
aggregate need, estimation, 338–339
annuities, investment usage, 315–316
distribution
minimum option, 344
taxes, relationship, 339t
inflation-adjusted retirement need projection, 341t
inflation, effect, 340
joint-life annuities, 345
life annuities, installment distributions, 344
needs
increase, expectations, 338–339
noncontributory plans, 317
planning process, overview, 334–337
resources, inventory, 339
single annuities, 345
unmet need, summarization, 339–340
variable annuity variation, 344
variable distributions, 344–345
Retirement Equity Act of 1984, 326
Retirement plans, 317. See also Qualified retirement plans
death benefits, 328
estate taxes, 328
installment distributions, 327
loan transactions, limitations, 328
lump-sum distributions, 327–328
Retirement risk, 196
alternatives, 334
causes, 334
impact, 361
transfer, usage, 334
types, 334
Retrospective premium, calculation, 141
Retrospective rating, 131
plans, 141
Return-of-cash-value policy, 282–283, 282f
Return-of-premium policy, 282–283, 283f
Revenue Ruling 2002-89, 68
Revenues, expenses (matching), 146
Reversionary annuity, 312
Reversionary life insurance policy, 312
Revocable beneficiary designation, 255
Riot/civil commotion, coverage, 452–453
Risk
analysis questionnaires, 27
assumption, 488
avoidance, 18
burden, 8
control, 18
decision making, 55
managerial control, 30
exposures, identification, 25
failure, impact, 8
cost, 62
decisions, tax considerations, 62
flowcharts, usage, 27
hazard, difference, 5
identification techniques, 26–27
impact, 42
loss, 57
manager
term, usage, 13
peril, difference, 5
priority ranking, severity basis, 28
probability/priority rankings, 29
quantitative performance standards, 30–31
reduction, 18. See also Unemployment.
special cases, 59
retention, 19
decision, implementation, 30
managerial control, 30
shift, 34
treatment device, selection, 29–30
uncertainty, relationship, 3
Risk and Insurance Management Society (RIMS), 15
Risk-based capital (RBC)
requirements, 103
standards, NAIC development, 104
Risk identification
approaches, combination, 28
expert systems, usage, 28
internal communication system, usage, 27
Risk management, 10
audits, 31
decision theory, impact, 55–57
individual, relationship, 24
insurance management, difference, 20–21
misconceptions, 23
objectives, determination, 24
organization contribution, 21–22
policy, 25
sample, 26f
primary objective, 25
problems, 291
rules, 57
Risk Retention Act of 1986, 68–69, 112
Risk Retention Acts, provision, 67
Risk retention groups, 67, 68–69
formation, 112
Risk-sharing pools, 69
Rollovers (Section 1035 exchanges), 303–304
tax-free rollovers, 303
Rules-based system (life insurer regulation), 150–151
Safeco Insurance Company v. Gonacha, 174
Sales floaters, 571
Sample statistic, 37
SAR-SEP plans, Roth contributions, 324–325
Savings incentive match plan for employees (SIMPLE)
IRAs, distributions, 327
plans, 323
Savings plans, 321
Schedule bonds, 574
Scheduled Personal Property Endorsement, 438, 459, 471–472
Scheduled premium (planned premium), 275
Secondary dependencies, 564
Secondary market expansion, life insurance industry opposition, 300
Second-injury funds, 221
Second-surplus treaties, 153
Second-to-die policy, 280
Section 401(k) plans (cash plans) (deferred plans), 321
contributions, 336
Section 403(b) plans, 323
Section 457 plans, 322
Section 1035 exchanges (rollovers), 303–304
Securities and Exchange Commission (SEC)
qualification requirements, 233
Rule 151A, 316
Securities Investor Protection Corporation (SIPC), 51
Securities Valuation Office (SVO), 105
Security-type law, 515
Self-directed annuities, 314
Self-employed persons, tax rate, 206
reasons, 66
Senior Professional Public Adjuster (SPPA), 138
Senior Protection in Annuity Transactions Model Regulation (NAIC), 316–317
Service-Disabled Veterans Insurance Program, 238
Servicemen's and veterans' life insurance, 79
Servicemen's Group Life Insurance (SGLI), 238
Seven-pay test, 284
Shared markets, 118
participation, 86
Short-term disability coverage, long-term disability coverage (difference), 350
Sickness, definition, 353
Sidecars, 157
Significant loss of earnings, 354
SIMPLE. See Savings incentive match plan for employees
Simplified employee pension (SEP) plans, 322
maximum employer contribution, 324
Single annuities, 345
Single Employer Pension Plan Amendments Act of 1986 (SEPPAA), 424
Single individual, lifestyles, 188
Single life annuities, joint life annuities (difference), 309–310
Single life, life income payments, 261t
Single-premium annuities, installment annuities (difference), 309
Single-premium deferred annuity (SPDA), 311–312
Single-premium life policy, 283–284
Sinkhole collapse, 458
Skilled nursing facility care, 391
Small Business Administration (SBA) Surety Bond Guarantee Program, 79
Small Business Job Protection Act of 1996 (SBJPA), 323
Small-company deduction, IRC permission, 159
Small employer tax credit, 382
Smoke damage, coverage, 453
Snowmobile endorsements, 507, 547–548
Snowmobile Policy, 546
coordination, 357
device, 48
insurance, qualification, 50
substitute rider, 357
supplement rider, 357
U.S. programs, 49
Social pricing, 119
cost-based pricing, difference, 120
Social rating
idea, 119
Advisory Council on Social Security report, 215–216
bailout plan, 213
beneficiaries, funding, 334
benefits
excess, 212
levels, changes (proposals), 214–215
reduction, 211
contribution, 213
cost-of-living adjustments (COLAs), determination, 214–215
financing, changes (proposal), 214
freeze, 353
partial indemnity, 218
periodic payments, 218
privatization, 215
program
cost, 218
qualification requirements, 205–206
retirement
benefits, 317
funding source, 335
self-supporting program, 212–213
strengthening, commission, 216
Social Security Act of 1935, 200, 389
Social Security Trust Funds, 401
Solvency Modernization Initiative (SMI), 102
South-Eastern Underwriters Association (SEUA) case, 101, 113
Special Computer Coverage Endorsement, 459
Special damages, 484
Specialized annuities, 311–315
Specialized life contracts, 279–286
Specific-account coverage, whole-turnover coverage (difference), 614–615
Specific insurance, 561
Specific stop-loss, 416
Specified Low-income Medicare Beneficiary (SLMB), 399
Split funding, 421
Spoilage Coverage, 558
Spoilage damage, 567
Spousal impoverishment restrictions, 408–409
Spouses, benefits, 208
SR-21, 515
Standard and Poor's 500 (S&P500) index, 312
Standard annuity payments, 345t
Standard Flood Insurance Policy, Dwelling Form, 468
Standard Nonforfeiture Law, 265
Standard Property Policy, 562
Standard terminations, 424
Standard Valuation Law (NAIC), 150–151
Standard Voluntary Compensation and Employers Liability Coverage Endorsement, 585
State average weekly wage (SAWW), 220
State Children's Health Insurance Program (state CHIP), 372
State compulsory temporary disability funds, 50
State Farm Mutual Automobile Insurance Company v. Campbell, 485
State financial responsibility limits, 516
State health insurance plans, 87
State insolvency funds, 106
State insurance regulation
continuation, 115
federal insurance regulation, difference, 113–116
modernization, NAIC effort, 115–116
public choice, 116
support, arguments, 114
State insurer insolvency funds, 52
Statement of Financial Accounting Standards (SFAS) No. 158, 425
State private (voluntary) insurance programs, 80
State Public Guarantee Insurance Programs, 52
States of nature, 55
State unemployment insurance programs, 200
State unemployment laws, benefits, 201
State workers compensation laws, 218–221
Statutory accounting
admitted assets, nonadmitted assets (difference), 145
policyholder's surplus, 146
reserves, 146
revenues, expenses (matching), 146
system, 144
terminology, 146
Statutory benefits, 502
Statutory profit/loss (underwriting results), 148–149
Stipulated authority (express authority), 164
Stop-loss insurance, 416
Storage floaters, 571
Straight life income option, 260
Straight whole life insurance, 231
Stranger-owned life insurance (STOLI), 299–300
Strategic risk, 15
Structured finance insurance, 615–616
Structures, exclusions, 451–452
Subjective interpretation, 36
Subrogation, 167, 171–172, 446
clause, 171
Subsidies, income redistribution effects, 122
Substandard risks, 134
Sudden/accidental damage, coverage, 454
Sudden/accidental tearing, coverage, 454
Suicide clause, 258
Suitability in Annuity Transactions Model Regulation (NAIC), 317
Supplemental Security Income (SSI), 372
Supplementary contracts, reserves, 151
Supplementary Medical Insurance (Medicare Part B) (SMI), 389, 392–393
Trust Fund, 401
Supply contract bond, 611
Surety, 610
risk transfer device, 47
Suretyship, insurance (difference), 610–611
Surrender cost index, 296
importance, 297
Surrender provisions
extended term insurance, 266–267
paid-up reduced amount, 266
Survivor income benefit insurance (SIBI), 415
Survivors
benefits, 205
death benefits, 219
Survivorship annuities, 312
Survivorship whole life policy (second-to-die policy), 280
Sustainable Growth Rate (SGR), 400
Systemically important financial institutions (SIFIs), 107
Systemic risk, 7
Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), 418–419
Taxes
health care costs, relationship, 377
retirement distributions, relationship, 339t
Tax-free exchanges, 303
Tax-free rollovers, 303
Tax-qualified long-term care insurance (TQ-LTCI), 406
Tax Reform Act of 1976 (TRA-76), 194
Tax Reform Act of 1986 (TRA-86), 159–160, 284, 311
Tax Reform Act of 1997 (TRA-97), 328
Teachers Insurance and Annuity Association of America (TIAA), 313
Technical and Miscellaneous Revenue Act of 1988 (TAMRA), 284
Technical Mapping Advisory Council, creation, 471
Technical provisions, 105
Temporary life annuity, 308
Terminal reserve, 247
Termination As to Any Employee policy condition, 575–576
Term life insurance, 225, 230–231
advantages/disadvantages, 231
cash value insurance, difference (reasons), 226
conversion privileges, 231
extended term insurance, 266–267
pure insurance protection, 226
renewal, variations, 231
Term to expectancy, 230
Testamentary trust, 195
Third-party administrator (TPA), retention, 416
Third-party coverage, 495
Thrift plans, 321
Time clause (disaster clause), 273
Time value of money, 184
Too big to fail (TBTF), 106–107
requirement, 420
Torrens system, 478
Tort, 481
Tort actions, survival, 490
Tort feasor, 481
Tort system, changes, 490–492, 519–524
Total disability, payments, 355–356
Total permanent disability, 219, 220
Total temporary disability, 219–220
Trade association insurance companies (TAICs), 67
Trade credit insurance, 46, 614–616
Trade profit, 150
Traditional risk management, 16
Trailer interchange, 601
Transfer. See Risk
Transfer or Surrender of Property exclusion, 577
Transportation coverages, 568–572
ocean marine insurance, 568–569
periods insured, 568
Transportation expense, 543
Transportation insurance, 553
Transportation/Moving Endorsement, 466
Travelers Insurance Company, 73
Trend factor, 132
Trespassers, 487
leasing, 601
Trust estates, bonds, 612
corpus, 195
Twisting, 108
Two-tier annuity, 312
Uberrimae fidei (utmost good faith), legal principle, 173
Umbrella, 604
Umbrella liability
cost, 510
coverage, 606
exclusions, 509
Unallocated funding instruments, 422
Unbundling, 67
Uncertainty, risk (relationship), 3
Underinsured motorist coverage, 539
agents
information, 135
role, 134
application, 135
broker information, 135
credit information, usage (regulation), 137
disability income insurance, 351
external agency information, 135
Fair Isaac Corporation (FICO) scores, 136
physical examinations/inspections, 135
policy, 134
postselection underwriting, 135–136
restrictions, 136
predictive analytics, usage, 137
profitability, indicator (combined ratio), 150
results (statutory profit/loss), 148–149
trade profit, 150
Underwriting syndicates, 83
Unearned Income Medicare Contribution Tax, 206
Unearned premium reserve, 105, 147
Unemployment
benefits, eligibility, 200–201
insurance, 49
programs. See State unemployment insurance programs.
programs, 49
retention, 201
risk reduction, 201
Unfair Trade Practices Act, 107–108
Uniform Accident and Sickness Policy Provisoin Law (UPPL) (NAIC), 358
Uniform Simultaneous Death Act, 273
Unilateral contract, insurance, 172
Unimportant risks, 28
Uninsured boaters coverage, 475
Uninsured Motorist Coverage, 550
payment limitations, 538
Uninsured Motorist Property Damage (UMPD), 537
Uninsured motorists coverage, 513, 537–539
persons, insurance, 538
Uninsured motorists exclusions, 538
Uninsured motorists insuring agreement, 537–539
Uninsured premises, exclusions, 500–501
Unintentional torts, 481
United States
health insurance, historical development, 366–368
life insurance, existence, 237t
monoline organization, 74
social insurance programs, 49
total life insurance, existence, 237
United States Postal Service (USPS), insurance sale, 79
Unit-owner's building items, open-peril coverage, 457
Universal life (UL) insurance, 225, 232
amount, changes, 275
applicable percentage, 276
costs, factors, 301
death benefit options, 276f
death benefit provision, 275–276
development, 293
interest, 301
loading, 301
mortality, 301
provision, premium/cost, 274–275
Unlicensed insurer (nonadmitted insurer), 74–75
Unmet disability income needs, 199
Unpaid claims, reserves, 151
Unrated bonds (junk bonds), 293
Unsatisfied judgment funds, 52
Unscheduled premium, 275
Untaxed earnings, accumulation, 292
Unwritten law, 177
Upside-down life insurance, 307–308
Urgency deficit, countering, 337
U.S. Longshoremen's and Harbor Workers' Compensation Act (LHWCA), 585
Usual, customary, and reasonable (UCR) charges, 373
Utility function, 55
Utility interruption, 567
Utility theory, 55
Utmost good faith (insurance), 173
Vacant land, 501
Valued policies (insurance contracts), 169
Valued policy laws, 170
Value maximization objectives, 24–25
Value papers insurance, 572
Vandalism/malicious mischief, coverage, 453
Variable annuities, 309, 312–315
function, 314
guaranteed benefits, 315
history, 313
variation, 344
Variable Annuity Life Insurance Company (VALIC), formation, 313
Variable life insurance, 225, 232–233
costs, factors, 301
interest, 301
loading, 301
mortality, 301
ratio plan, 233
Variable premium life insurance, 285
Variable universal life (VUL) insurance, 225, 233
Vehicles, coverage, 453
Verbal threshold, usage, 522
Vested-in-the-public rationale, 98
Vesting
minimum standards, 323t
requirements, 323
Veterans' Group Life Insurance (VGLI), 238
Veterans' Life Insurance, 238
Veterans' Mortgage Life Insurance Program, 238
Viatical settlement, 299
Voidable contract, 166
Voidable, term (usage), 166
Void, term (usage), 166
Volcanic Eruption
coverage, 454
provision, 445
Voluntary Compensation Insurance, 585
Voluntary insurance (private insurance), 44–47
Waiver or Change-of-Policy Provisions, 445
War clause, 258
Warehouse-to-warehouse clause, 569
Water Back and Sump Overflow, 458–459
Water Back Up and Sump Discharge or Overflow endorsement, 450
Watercraft
endorsements, 507
insurance, 474
Water exclusion, revision, 449–450
Weak no-fault states, 523
Whole-life insurance, 225, 231–232
graded-premium whole life insurance, 283
modified whole life insurance, 283
net premiums, comparison, 227f
policy
payment, 248
reserve, increase, 228f
Widows/widowers, benefits, 208–209
Windstorm/hail, coverage, 452
Wisconsin State Life Insurance Fund, 238
Without Extra Expense form, 563–564
Workers compensation, 49, 216–221, 495, 553, 583–585
assigned-risk pools, 85
common-law defenses, severity (softening), 217
disability provision, 357
historical background, 216–217
injuries, coverage, 219
laws
passage, 217
rationale, 217
liability determination, 217–218
Write-Your-Own Program, 466
Written contracts, interpretation, 177
Yearly price per $1000 of protection (YPT), 301–302
Your Business Personal Property, definition, 555