Insurance glossary.docx

Basic Glossary and Acronyms of Insurance Terms - Risk -- The possibility of incurring misfortune or loss. As for the underwriters' point of view, the risk maybe defined as exposures such as: Person being insured against his/her health, dismemberment and loss of life. - Peril -- is...

Basic Glossary and Acronyms of Insurance Terms - Risk -- The possibility of incurring misfortune or loss. As for the underwriters' point of view, the risk maybe defined as exposures such as: Person being insured against his/her health, dismemberment and loss of life. - Peril -- is the cause of injury, loss or damage. - Hazard -- A circumstance that increases the likelihood or probable severity of a loss. For example, the storing of explosives in a home basement is a hazard that increases the probability of an explosion. something causing danger, peril, risk, or difficulty. - Actuary -- A specialist in the mathematics of insurance who calculates rates, reserves, dividends and other statistics. - Adjuster -- A representative of the insurer who seeks to determine the extent of the insurer\'s liability for loss when a claim is submitted. - Agent -- Individual who sells and services insurance policies. - Annuitization -- Process by which you convert part or all the money in a qualified retirement plan or nonqualified annuity contract into a stream of regular income payments, either for your lifetime or the lifetimes of you and your joint annuitant. - Annuity -- An agreement by an insurer to make periodic payments that continue during the survival of the annuitant(s) or for a specified period. - AOG- Acts of God - AOM-Acts of Man - Casualty Insurance -- That type of insurance that is primarily concerned with losses caused by injuries to persons and legal liability imposed upon the insured for such injury or for damage to property of others. - Ceded Reinsurance -- The ratio of the reinsurance premiums ceded by the ceding company. - Ceding Company -- An insurance company that passes the part or all its risks from its insurance policy portfolio to a reinsurance firm. - Claim -- A demand made by the insured, or the insured\'s beneficiary, for payment of the benefits as provided by the policy. - Coinsurance -- In property insurance, this requires the policyholder to carry insurance equal to a specified percentage of the value of property to receive full payment on a loss. - Commission -- Fee paid to an agent or insurance salesperson as a percentage of the policy premium. - Encumbrance -- A claim on property, such as a mortgage, a lien for work and materials, or a right of dower. - Indemnity -- Restoration to the victim of a loss by payment, repair or replacement. - Liability -- Broadly, any legally enforceable obligation. The term is most commonly used in a pecuniary sense. - Liability Insurance -- Insurance that pays and renders service on behalf of an insured for loss arising out of his responsibility, due to negligence. - Named Perils - Perils specifically covered on insured property. - Net Premium -- The amount of premium minus the agent\'s commission. Also, the premium necessary to cover only anticipated losses, before loading to cover other expenses. - Participation -- Sometimes called as Deductible or a percentage of share of the assured in each claim. - Policy - The written contract affecting insurance, or the certificate thereof, by whatever name called, and including all clause, riders, endorsements, and papers attached thereto and made a part thereof. - Premium -- The price of insurance protection for a specified risk for a specified period of time. - Reinsurance -- In effect, insurance that an insurance company buys for its own protection. The risk of loss is spread so a disproportionately large loss under a single policy doesn\'t fall on one company. - Risk Management -- Management of the pure risks to which a company might be subject. It involves analyzing all exposures to the possibility of loss and determining how to handle these exposures through practices such as avoiding the risk, retaining the risk, reducing the risk, or transferring the risk, usually by insurance. - Retention -- The amount of premium, and limit of liability retain for the account of insurance and reinsurance company. - Term Life Insurance - Life insurance that provides protection for a specified period of time. Common policy periods are one year, five years, 10 years or until the insured reaches age 65 or 70. The policy doesn\'t build up any of the nonforfeiture values associated with whole life policies. - Underwriter -- The individual trained in evaluating risks and determining rates and coverages for them. Also, an insurer. - Underwriting -- The process of selecting risks for insurance and classifying them according to their degrees of insurability so that the appropriate rates may be assigned. The process also includes rejection of those risks that do not qualify. Insurance Associations in the Philippines Actuarial Society of the Philippines -- An association of Actuaries in Life Insurance Philippine Life Insurance Association -- An association of Life Insurance companies that attend to matters of life insurance business. Philippine Insurers and Reinsurers Association - PIRA represents the collective interests of the Philippine non-life insurance industry. It speaks out on issues of common interest; helps to inform and participate in debates on public policy issues; and acts as an advocate for the insurance industry. PIRA has around 90 companies. Between them, they provide 90 percent of domestic non-life insurance services sold in the Philippines. PIRA members account for a substantial investment in the Philippine stock market.