Individual Annuities- Immediate Non-Variable and Variable - an annuity contract that provides an accumulation based on both (1) funds that accumulate based on a guaranteed crediting interest rates or additional interest rate applied to designated considerations, and (2) funds where the accumulation vary in accordance with the rate of return of the underlying investment portfolio selected by the policyholder. Does not include stand alone Medicare Part D Plans. Environmental Pollution Liability - liability coverage of an insured to persons who have incurred bodily injury or property damage from acids, fumes, smoke, toxic chemicals, waste materials or other pollutants. Blanket coverage - coverage for property and liability that extends to more than one location, class of property or employee. Include under this type of insurance multi-peril policies (other than farmowners, homeowners and automobile policies) that include coverage for liability other than auto. Mortality Table - chart that shows the death rates of a particular population at each age displayed as the number of deaths per thousand. However, an ADB increases premium charges, and using it decreases the death benefit payable . Authorized Control Level Risk Based Capital - theoretical amount of capital plus surplus an insurance company should maintain. Medicare Part D - Stand-Alone - stand-alone Part D coverage written through individual contracts; stand-alone Part D coverage written through group contracts and certificates; and Part D coverage written on employer groups where the reporting entity is responsible for reporting claims to the Centers for Medicare & Medicaid Services (CMS). Asset Risk - in the risk-based capital formula, risk assigned to the company's assets. This includes policies providing only nursing home care, home health care, community based care, or any combination. Bonds - a form of debt security whereby the debt holder has a creditor stake in the company. Investments with original maturities of three months or less qualify under this definition. Statutory Accounting Principles (SAP) - a set of accounting principles set forth by the National Association of Insurance Commissioners used to prepare statutory financial statements for insurance companies. Obligations issued by business units, governmental units and certain nonprofit units having a fixed schedule for one or more future payments of money; includes commercial paper, negotiable certificates of deposit, repurchase agreements and equipment trust certificates. Accelerated Benefit (Insurance) - The Business Professor, LLC The policy does not include coverage provided under comprehensive/major medical policies, Medicare Advantage, or for accelerated heath benefit-type products. A glossary of insurance terms and definitions. Professional development for state insurance regulators and industry professionals. Accelerated benefits are terms of specific life insurance policies that permit a policyholder to get benefits before they die. Model state law of the NAIC that stipulates that the prospective purchaser of a dread disease insurance policy (catastrophic illness insurance policy) must be provided a quantitative illustration of the accelerated payout's effect on the death benefit, policy loan, premiums, and cash value of the life insurance policy. (Click on the letter to view terms beginning with that alphabet.). Long-Term Care - policies that provide coverage for not less than one year for diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services provided in a setting other than an acute care unit of a hospital, including policies that provide benefits for cognitive impairment or loss of functional capacity. Calculated by dividing the company's capital by the minimum amount of capital regulatory authorities have deemed necessary to support the insurance operations. Contingent Liability - the liability of an insured to persons who have incurred bodily injury or property damage from work done by an independent contractor hired by the insured to perform work that was illegal, inherently dangerous, or directly supervised by the insured. Aircraft - coverage for aircraft (hull) and their contents; aircraft owners' and aircraft manufacturers liability to passengers, airports and other third parties. Dental Only - line of business providing dental only coverage; coverage can be on a stand-alone basis or as a rider to a medical policy. What is NAIC meaning in Medical? Individual Credit Life - contracts sold in connection with loan/credit transactions or other credit transactions, which do not exceed a stated duration and/or amount and provide insurance protection against death. Stop Loss/Excess Loss - individual or group policies providing coverage to a health plan, a self-insured employer plan, or a medical provider providing coverage to insure against the risk that any one claim or an entire plan's losses will exceed a specified dollar amount. Renewable Term Insurance - insurance that is renewable for a limited number of successive terms by the policyholder and is not contingent upon medical examination. Declarations - policy statements regarding the applicant and property covered such as demographic and occupational information, property specifications and expected mileage per year . Furthermore, the mortgage must have originated from a regulated and authorized financial institution. Self-Insurance - type of insurance often used for high frequency low severity risks where risk is not transferred to an insurance company but retained and accounted for internally. The amount varies with the value of equities (separate account) purchased as investments by the insurance companies. Group Code - a unique three to five digit number assigned by the NAIC to identify those companies that are part of a larger group of insurance companies. Commencement Date - date when the organization first became obligated for any insurance risk via the issuance of policies and/or entering into a reinsurance agreement. Publication 525 (2022), Taxable and Nontaxable Income National Adoption Information Clearinghouse. Line of Business - classification of business written by insurers. Burglary and Theft - coverage for property taken or destroyed by breaking and entering the insured's premises, burglary or theft, forgery or counterfeiting, fraud, kidnap and ransom, and off-premises exposure. Commercial General Liability - flexible & broad commercial liability coverage with two major sub-lines: premises/operations sub-line and products/completed operations sub-line. Standard Risk - a person who, according to a company's underwriting standards, is considered a normal risk and insurable at standard rates. Prior Approval Law - a state regulatory requirement for pre-approval of all insurance rates and forms. Subrogation Clause - section of insurance policies giving an insurer the right to take legal action against a third party responsible for a loss to an insured for which a claim has been paid. National Aging Information Center. Deductible - Portion of the insured loss (in dollars) paid by the policy holder. Indemnity, Principle of - a general legal principle related to insurance that holds that the individual recovering under an insurance policy should be restored to the approximate financial position he or she was in prior to the loss. Aggregate Cost Payments - method of reimbursement of a health plan with a corporate entity that directly provides care, where (1) the health plan is contractually required to pay the total operating costs of the corporate entity, less any income to the entity from other users of services, and (2) there are mutual unlimited guarantees of solvency between the entity and the health plan that put their respective capital and surplus at risk in guaranteeing each other. Facultative Reinsurance - reinsurance for a specific policy for which terms can be negotiated by the original insurer and reinsurer. Excess Workers' Compensation - either specific and/or aggregate excess workers' compensation insurance written above an attachment point or self-insured retention. This insurance is sometimes referred to as Credit Family Leave. Renters Insurance - liability coverage for contents within a renter's residence. EBNR - Earned but not reported - premium amount insurer reasonably expects to receive for which contracts are not yet final and exact amounts are not definite. Continuing Care Retirement Communities - senior housing arrangements that in addition to housing include some provision for skilled nursing care. Hazard - circumstance which tends to increase the probability or severity of a loss. Event Cancellation - coverage for financial loss because of the cancellation or postponement of a specific event due to weather or other unexpected cause beyond the control of the insured. (Non-business liability exposure protection for individuals.). Additionally, the PSC has thoroughly reviewed the proposed Uniform Standards in comparison to the corresponding Group Term Life Insurance Uniform Standards for Accelerated Death Benefits and the NAIC Accelerated Benefits Model Regulation (#620). Joint Underwriting Association (JUA) - a loss-sharing mechanism combining several insurance companies to provide extra capacity due to type or size of exposure. NAIC is listed in the World's most authoritative dictionary of abbreviations and acronyms The Free Dictionary Commission - a percentage of premium paid to agents by insurance companies for the sale of policies. Pure Risk - circumstance including possibility of loss or no loss but no possibility of gain. Most common NAIC abbreviation full forms updated in May 2023. Insurer - an insurer or reinsurer authorized to write property and/or casualty insurance under the laws of any state. Credit Placed Insurance - insurance that is purchased unilaterally by the creditor, who is the named insured, subsequent to the date of the credit transaction, providing coverage against loss, expense or damage to property as a result of fire, theft, collision or other risks of loss that would either impair a creditor's interest or adversely affect the value of collateral. Security - a share, participation, or other interest in property or in an enterprise of the issuer or an obligation of the issuer. Reserve Credit - reduction of reserve amounts for reinsurance ceded. Employment Practices Liability Coverage - liability insurance for employers providing coverage for wrongful termination, discrimination, or sexual harassment of the insured's current or former employees. An example is a tenant who, while occupying another party's property, through negligence causes fire damage to the property. Personal Auto Policy - coverage designed to insure private passenger automobiles and certain types of trucks owned by an individual or husband and wife. Life Flexible Premium Adjustable Life - a group life insurance that provides a face amount that is adjustable to the certificate holder and allows the certificate holder to vary the modal premium that is paid or to skip a payment so long as the certificate value is sufficient to keep the certificate in force, and under which separately identified interest credits (other than in connection with dividend accumulation, premium deposit funds or other supplementary accounts) and mortality and expense charges are made to individual certificates while providing minimum guaranteed values. Soft Market - a buyer's market characterized by abundant supply of insurance driving premiums down. High or low risk candidates may qualify for extra or discounted rates based on their deviation from the standard. Accelerated Benefit Riders: How They Work - Investopedia Fronting - an arrangement in which a primary insurer acts as the insurer of record by issuing a policy, but then passes the entire risk to a reinsurer in exchange for a commission. View actions considered by committees, task forces, and subgroups, as well as charges, schedules, and staff links. Annuitant - the beneficiary of an annuity payment, or person during whose life and annuity is payable. Credit Life Insurance - policy assigning creditor as beneficiary for insurance on a debtor thereby remitting balance of payment to creditor upon death of debtor. If the coverage is as a rider, deductibles or out-of-pocket limits must be set separately from the medical coverage. These contracts with CMS provide reimbursement through pre-determined monthly amount per member based on a total estimated budget. Gramm-Leach Bliley Act (GLBA) - act, repealing Glass-Steagal Act of 1933, allows consolidation of commercial banks, investment institutions and insurance companies. The assumption is in exchange for a premium. State Children's Health Insurance Program - policies issued in association with the Federal/State partnership created by title XXI of the Social Security Act. Crop-Hail Insurance - coverage for crop damage due to hail, fire or lightning. Personal Injury Liability - liability coverage for those who have been discriminated against, falsely arrested, illegally detained, libeled, maliciously prosecuted, slandered, suffered from identity theft, mental anguish or alienation of affections, or have had their right of privacy violated. Access to every published model law, regulation, and guideline. Substandard Risk - (impaired risk) risks deemed undesirable due to medical condition or hazardous occupation requiring the use of a waiver, a special policy form, or a higher premium charge. LIFE INSURANCE: REGULATION OF ACCELERATED BENEFITS - Michigan Legislature Viatical Settlement: What it is, How it Works - Investopedia International - includes all business transacted outside the U.S. and its territories and possessions where the appropriate line of business is not determinable. Separate Account - segregated funds held and invested independently of other assets by an insurer for the purpose of a group retirement fund. Agent - an individual who sells, services, or negotiates insurance policies either on behalf of a company or independently. Claims-made Form - A type of liability insurance form that only pays if the both event that causes (triggers)the claim and the actual claim are submitted to the insurance company during the policy term. Medicare + Choice - a major initiative in the Balanced Budget Act of 1997 (also called Medicare Part C), under which Medicare beneficiaries may select from among several managed care options or a Medicare system. Pro-rata (proportional) Reinsurance - portion of the losses and premium reinsurer shares with the ceding entity. Construction and Alteration Liability - covering the liability of an insured to persons who have incurred bodily injury or property damage from alterations involving demolition, new construction or change in size of a structure on the insured's premises. Net Admitted Assets - total of assets whose values are permitted by state law to be included in the annual statement of the insurer. Calendar Year Deductible - in health insurance, the amount that must be paid by the insured during a calendar year before the insurer becomes responsible for further loss costs. Group Annuities Immediate Variable - an annuity contract that provides for the first payment of the annuity at the end of the fixed interval of payment after purchase. Must include at least one option to have the accumulation vary in accordance with the rate of return of the underlying investment portfolio selected by the policyholder and may include at least one option to have the series of payments vary in accordance with the rate of return of the underlying investment portfolio selected by the policyholder. Comprehensive Personal Liability - comprehensive liability coverage for exposures arising out of the residence premises and activities of individuals and family members. An Accelerated Death Benefit (ADB) allows a life insurance policy owner to receive a portion of their death benefit from their insurance company in advance of their death. Underwriting - the process by which an insurance company examines risk and determines whether the insurer will accept the risk or not, classifies those accepted and determines the appropriate rate for coverage provided. Total Revenue - premiums, revenue, investment income, and income from other sources. Collateralized Mortgage Obligations (CMOs) - a type of mortgage-backed security (MBS) with separate pools of pass-through security mortgages that contain varying classes of holders and maturities (tranches) with the advantage of predictable cash flow patterns. Retrospective Rating - the process of determining the cost of an insurance policy based on the actual loss experience determined as an adjustment to the initial premium payment. The policy covers risks not explicitly excluded in the policy contract. A number of different product types are being offered or considered by insurance companies. Ocean Marine - coverage for ocean and inland water transportation exposures; goods or cargoes; ships or hulls; earnings; and liability. Examples are flood and earthquake coverage. These are governed generally by National Association of Insurance Commissioners (NAIC) Model Regulation 620, which pertains to accelerated benefits other than tax-qualified long-term care insurance benefits. Accident Only - an insurance contract that provides coverage, singly or in combination, for death, dismemberment, disability, or hospital and medical care caused by or necessitated as a result of accident or specified kinds of accident. Long-Term Disability Income Insurance - policy providing monthly income payments for insureds who become disabled for an extensive length of time, typically two years or longer. The definition of "long-term care insurance" under this Act is designed to allow maximum flexibility in benefit scope, intensity and level, while assuring that the purchaser's reasonable expectations for a long-term care insurance policy are met. Date of Issue - date when an insurance company issues a policy. Same as "effective date" of coverage. This article will discuss one particular category called living benefit riders or accelerated death benefit riders. DOC LONG-TERM CARE: - McGuireWoods Retention - a mechanism of internal fund allocation for loss exposure used in place of or as a supplement to risk transfer to an insurance company. Loss Frequency - incidence of claims on a policy during a premium period. Financial Guaranty - a surety bond, insurance policy, or an indemnity contract (when issued by an insurer), or similar guaranty types under which loss is payable upon proof of occurrence of financial loss to an insured claimant, obligee or indemnitee as a result of failure to perform a financial obligation or any other permissible product that is defined as or determined to be financial guaranty insurance.
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