The Institutes Glossary


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F

Classifications that describe freight handling, stevedoring, or other operations inherently subject to LHWCA jurisdiction.
An examination to detect arthritis in the hip. With the patient lying on the back, a knee is flexed with the outside ankle resting on the knee of the opposite leg and the knee depressed. Pain indicates arthritis in the hip. Alternatively referred to as Patrick’s Test.
The death benefit provided under the policy.
The value of the death benefit provided under a life insurance policy.
A bond’s original value and the amount that will be paid at the bond’s maturity date.
The smooth areas of the cervical vertebrae for articulation with the ribs.
A physical condition characterized by symptoms that result from an unconscious psychological need to be sick.
A bailee entrusted with possession of another’s goods for sale on commission.
A statistical approach used to analyze interrelationships among a large number of variables and to explain these variables in terms of their common underlying dimensions (factors). Information contained in the original variables is condensed into a smaller set of factors.
The elimination of an element in an analysis because of its negligible effect on the calculation or because it represents an uncharacteristic event that is unlikely to recur.
Selling a company's accounts receivable at a discount.
A document that assigns a firm's entire inventory to a financial institution as collateral for a loan.
Mutual insurance companies originally formed by textile manufacturers to obtain lower rates for their mills; HPR insurers
A situation in which a party experiences an economic advantage if an insured event does not occur or, conversely, economic harm if the event does occur.
An agreement that defines the terms of the facultative reinsurance coverage on a specific loss exposure.
Reinsurance of individual loss exposures in which the primary insurer chooses which loss exposures to submit to the reinsurer, and the reinsurer can accept or reject any loss exposures submitted.
The manner in which a perceived or actual defect in an item, process, or design occurs.
An analysis that reverses the direction of reasoning in fault tree analysis by starting with causes and branching out to consequences.
An insurance pool through which private insurers collectively address an unmet need for property insurance on urban properties, especially those susceptible to loss by riot or civil commotion.
The credit legislation that applies to suretyship.
The amount that a willing and able buyer would pay for the principal's assets or the amount that the principal's creditors would accept in satisfaction of the principal's liabilities in the short term.
The price at which a property would change hands on the open market between a willing buyer and a willing seller (also referred to as market value).
An insurance pool through which private insurers collectively address an unmet need for property insurance on urban properties, especially those susceptible to loss by riot or civil commotion.
Under Coverage D—Loss of Use of a homeowners policy, the amount of rent (less any discontinued expenses) that the insured would have received for the residence or any part of the residence rented to another individual for residential purposes if the residence had not been damaged.
Coverage for losses that arise when the insured's rental property, whether rented or not, has been damaged and is no longer available for rental.
The right to use copyrighted material in a reasonable manner without the copyright owner’s consent.
The market value, either actual or estimated, of an asset or a liability.
An officeholder’s high standard of conduct in fulfilling official duties.
The seizure or forcible restraint of a person without legal authority.
The restraint or confinement of a person without consent or legal authority.
The endorsement that deletes the False Pretense exclusion from the ADCF and agrees to pay for loss as a result of the named insured’s (1) being tricked into voluntarily parting with an auto or (2) acquiring an auto from a seller who did not have legal title.
Any false material statement of fact as to an insurer’s financial condition, knowingly made.
A person who is related to the claimant and is a resident of the claimant’s household.
A liability concept that holds the owner of an automobile kept for the family’s use vicariously liable for damages incurred by a family member while using the automobile.
Farm coverages, including property and liability, with a discount on the property coverage
Liability coverage including commercial and personal liability similar to the CGL and homeowners policies
Property coverage similar to homeowners coverages A through D of a homeowners policy, although differences exist between that policy and the farm form.
A package policy consisting of residential insurance and commercial property and liability insurance, with some special provisions to cover loss exposures unique to farms.
See Free alongside vessel.
An analysis that takes a particular system failure and traces the events leading to the system failure backwards in time.
A warranty that excludes loss caused by war, piracy, virtually any lawful or unlawful taking of the vessel, a nuclear weapon, a mine, or a torpedo.
Federal statute that provides workers compensation benefits for nonmilitary employees of the federal government.
Federal statute that allows employees of interstate railroads or their survivors to sue their employers for occupational injuries or death that result from the employer’s negligence.
A tax imposed on premium payments to offshore insurers.
A reinsurance treaty clause that states that the primary insurer is responsible for administering and remitting the federal excise tax levied against alien reinsurers party to the treaty.
The arm of the Federal Emergency Management Agency (FEMA) that manages the NFIP through the administrative services of a private contractor.
A statute that prohibits the use of the U.S. Postal Service for the purpose of defrauding or obtaining money or property by means of a false or fraudulent pretense, representation, or promise.
A classification of bond that is required for some public officials in federal offices.
A federal bond that is required to provide postal service in an area without a post office.
A reduction in construction loan rates to stimulate rural residential development.
The agency that enforces compliance with the Fair Credit Reporting Act.
Grants to commissions, corporations, and groups that coordinate the use and disbursement of funds to subsidize the construction of low-rent apartments.
A certificate granted to warehouse owners and grain elevator owners who comply with the objectives of the Warehouse Act.
A procedure in which bills from healthcare providers are analyzed to ensure that proper items of service are being billed and that charges for services are appropriate.
An independent contractor who specializes in loss control work and who is paid for each loss control survey performed.
Controlling healthcare provider fees by negotiating discounts, developing billing guidelines, and auditing medical bills.
A list of the maximum allowable charges for reimbursement to medical providers.
A full ownership interest in property with the unconditional right to dispose of it.
The information the receiver sends back to the sender in the communication process.
A commercial facility that fattens a farmer’s animals and then markets them for slaughter at the best possible time.
A specialized type of livestock coverage that covers animals while in the custody of a commercial feedlot operator.
A payment arrangement under which a healthcare provider sets its fee and the insurer or patient pays the fee after the service is rendered.
A common-law defense to negligence used by employers in tort suits brought by injured employees who sustained injuries during the course of business from the act or omission of a fellow employee.
A worker of the same rank as the injured worker.
Any claim or suit brought against the insured by a fellow employee who sustains injuries during the course of business because of the insured's acts or omissions.
The thighbone, which bears the weight of the entire upper body.
An extension of a fire wall through an outer wall.
A complication in a healing fracture that occurs when the callus fails to harden.
The long, slender bone on the outside of the lower leg.
Bonds that historically have guaranteed the honesty of employees. Fidelity bonds have been replaced by employee dishonesty coverage (insurance).
A dishonest act that occurs when an employee in a position of trust willfully violates that trust.
A person or entity that holds a position of trust, manages another person’s or entity’s affairs or funds, and has a duty to that person or entity to act in a trustworthy manner.
A court bond guaranteeing that a person appointed by a court to administer the property or interests of others will faithfully perform his or her duties.
The duty to act in the best interests of another.
A financial account set aside by a fiduciary entrusted with the duty of caring for the assets of another based on trust and confidence.
Insurance that covers the fiduciaries of an employee benefit plan against liability claims alleging breach of their fiduciary duties involving discretionary judgment.
The obligation to perform duties faithfully, carefully, and diligently.
An audit conducted by a premium auditor at the insured's office or at the insured's CPA's office.
An inspection of an insured’s business operation to ensure that accurate information was supplied on the insurance application or that the premium is adequate for the operation.
An insurer's employee who handles claims that are best handled in person; much of the field claims representative's time is spent visiting the scene of a loss; interviewing witnesses; investigating damage; and meeting with insureds, claimants, lawyers, and other persons involved in the claim.
An inventory valuing method that assumes that the first items purchased are the first items sold.
A type of trailer hitch designed for pulling heavy trailers. The gooseneck hitch on the trailer connects to a plate mounted on the towing vehicle on which the hitch can pivot during a turn.
An insurance rating law in which the insurer must file rates and supporting rules with the state insurance department prior to their use, but the rates can then be used immediately without specific approval.
A written document that summarizes activity on a claim that is open beyond a certain time period.
A type of insurance rate regulation in which the insurer must file rates and supporting rules with the insurance regulator within a specific number of days prior to their use, and if not disapproved by the regulator during that review period, the rates can then be used immediately without specific approval.
An insurance rating law in which the insurer must file rates and supporting rules with the state insurance department prior to their use, but the rates can then be used immediately without specific approval.
The classes of inland marine business for which policy forms and/or rates must be filed with the state insurance department.
Forms and/or rates that must be submitted to state insurance departments for approval; these forms are usually standardized and published by an advisory organization.
The classes of inland marine business for which forms and/or rates must be filed with the state insurance department.
The election of an income tax rate filing schedule from one of five individual taxpayer categories, based on family status.
Form that covers exposed motion picture film and magnetic tapes or videotapes, including related soundtracks or sound records.
Expenses before death, including health care and funeral expenses.
An administrative agency’s final conclusion or disposition of any material private right of a party, terminating an agency proceeding.
The price per exposure unit determined by adjusting the prospective loss costs for expenses, profits, and contingencies.
A discipline concerned with determining value and making decisions about money, banking, credit, investments, and other assets.
The process used to prepare financial statements for use by both external and internal parties.
A profitability ratio that indicates whether an insurer has made an underwriting loss or gain; calculated by dividing incurred losses and incurred expenses by earned premiums.
A profitability ratio for an insurer that relates underwriting expenses to earned premiums.
For noninsurance entities, a firm’s net worth; for an insurer, the amount of its policyholders’ surplus.
An analysis of an insurer's operations and financial condition to determine if the insurer meets the financial requirements to sell insurance in a particular state.

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