Underwriting Risk.

Underwriting risk is the inherent risk in the insurance underwriting process that the actual losses experienced by an insurer will exceed the expected losses. Underwriting risk can be caused by a number of factors, including adverse selection, moral hazard, and changes in the underlying risk factors. What are the types of risk classification? There are … Read more

General Account.

A General Account is the primary account that an insurance company uses to hold premium dollars and investment assets to pay claims and expenses. The account is also used to hold reserves for future policy benefits. What does GA stand for in business? GA stands for General Agent. A General Agent is an insurance agent … Read more

Builders Risk Coverage Form.

A Builder’s Risk Coverage Form is an insurance policy that provides protection for a builder or contractor against loss or damage to property during the course of construction. The coverage is usually written on a “special form” basis, which means that it is specifically tailored to the needs of the builder or contractor, and is … Read more

Reservation Of Rights Letter.

A reservation of rights letter is a formal notice from an insurance company to a policyholder that, while the company will continue to provide coverage under the policy, it reserves the right to deny coverage for any claims that may arise from the policy. The letter may also state that the company will not be … Read more

What Are Reinsurance Recoverables?

Reinsurance recoverables are the amounts of money that an insurance company is owed by its reinsurers. This money is typically owed to the insurance company in the form of premiums that were paid by the insurance company to the reinsurer. Why reinsurance is necessary in insurance industry? Reinsurance is insurance for insurers. It is a … Read more

What Is Member Month?

Member Month refers to the period of time during which an insurance policyholder’s membership dues are paid. This term is typically used in relation to group health insurance plans, as it allows the insurer to determine the amount of the policyholder’s monthly premium. How long is term life insurance? Term life insurance is one type … Read more

How Aggregate Stop-Loss Shields Against Higher-Than-Anticipated Claims.

An aggregate stop-loss policy is insurance that protects a company against higher-than-anticipated claims. The policy pays out when the total amount of claims exceeds a certain threshold, known as the attachment point. This type of policy can shield a company from catastrophic losses, and can be particularly useful for companies with large self-insured retention limits. … Read more

What Is a Third-Party Administrator (TPA)?

A third-party administrator (TPA) is an organization that performs certain administrative functions on behalf of a insurance company or self-insured company. The TPA may be responsible for claims processing, plan design and implementation, plan marketing, plan administration, and/or provider relations. Which of the following is an example of a Third Party Administrator? A Third Party … Read more

Possession, ownership, or control (POC).

. The legal responsibility for the care, custody, or control of another person or thing. What is the difference between a BOP and a GL policy? A Business Owners Policy (BOP) is a type of insurance policy that offers protection for a business owner against a variety of risks, such as fire, theft, and liability. … Read more

Capital at Risk (CaR) Definition.

Capital at risk (CaR) is the portion of a company’s capital that would be lost if its worst-case scenario happened. It is a measure of a company’s financial risk. A company’s CaR is the sum of its equity at risk and its debt at risk. A company’s equity at risk is the portion of its … Read more