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Home Dictionary E Experience Rating (Insurance) insurance experience ratings are the losses of the insured person in relation to similar insured persons. Experience ratings help determine the likelihood that an insured will file a claim. Insurers charge higher premiums from risky insurers, which also encourages the insured to improve risk management methods. Experience modifiers are annual bonus adjustments based on previous loss experience. Aleatory Contract
September 25, 2022 an aleatory contract is an agreement under which the parties are not required to perform certain actions until a certain event occurs. Guideline Premium and Corridor Test (GPT)
September 25, 2022 The Regulatory Premium and Band Test (GPT) is a test used to determine whether an insurance product is taxed as insurance or as an investment. Loss Adjustment Expense (LAE)
September 25, 2022 Loss adjustment costs are the costs of insurance companies for the investigation and settlement of insured events. Net Premium
September 25, 2022 Net premium is an accounting term in the insurance industry. Occurrence Policy
September 25, 2022 Accident insurance covers claims for injuries sustained during the term of the insurance policy, even if they are filed after the cancellation of the policy. Transfer of Risk
September 25, 2022 Transfer of risk shifts liability for losses from one party to another in exchange for payment. Valuation Premium
September 25, 2022 Valuation premium is a rate set by a life insurance company based on the value of the company’s insurance reserves. Vanishing Premium
September 25, 2022 A vanishing premium allows a permanent life insurance holder to use dividends received from the policy to pay the required premium. Waiting Period
September 25, 2022 The waiting period, also known as the qualifying period, is the time before coverage begins. Waiver of Coinsurance Clause
September 25, 2022 A co-insurance waiver clause refers to language in an insurance policy that sets out conditions under which policyholders must not pay part of a claim. War Risk Insurance
September 25, 2022 War risk insurance is coverage for losses resulting from events such as war, invasion, insurrection, riots, strikes and terrorism. Warehouse Bond
September 25, 2022 A warehouse bond provides financial protection for individuals or businesses that store goods in a warehouse. Wear and Tear Exclusion
September 25, 2022 Exclusion of depreciation in the insurance contract states that losses from natural wear and tear of the insured property are not covered. Weather Insurance
September 25, 2022 Weather insurance offers financial protection against losses that may be incurred as a result of adverse, measurable weather conditions. Activity-Based Management (ABM)
September 25, 2022 Performance Based Management (ABM) is a means of analyzing a company’s profitability by looking at every aspect of its business to determine its strengths and weaknesses. Actuarial Science
September 25, 2022 Actuarial science assesses financial risks in insurance and finance using mathematical and statistical methods. Administrative Services Only (ASO)
September 25, 2022 ASO-based self-financing plans are common among large firms because they can spread the risk of costly claims over a large number of employees and dependents. Agency Problem
September 25, 2022 An agency problem is a conflict of interest inherent in any relationship where one party is expected to act in the interests of the other. Aggregate Stop-Loss Insurance
September 25, 2022 Comprehensive loss insurance is designed to protect an employer that is self-funding its employee health plan from higher-than-expected claims payments. Appropriation
September 25, 2022 Appropriation is the act of allocating money for a particular purpose. Asset Financing
September 25, 2022 Asset financing allows a company to obtain a loan by pledging its balance sheet assets. Asset-Liability Committee (ALCO)
September 25, 2022 Asset and Liability Management Committees (ALMCs) are responsible for overseeing the asset and liability management of a company or bank. Assurance
September 25, 2022 A guarantee refers to a financial cover that provides a reward for an event that is bound to happen. Audit Committee
September 25, 2022 The Audit Committee consists of members of the company’s board of directors and oversees its financial reporting and reporting. BCG Growth-Share Matrix
September 25, 2022 The BCG Growth Share Matrix is an internal tool used by management to assess the current state of the value of a firm’s divisions or product lines.