The Institutes Glossary


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Description of an option in which the underlying stock’s price is equal to the exercise or strike price when the option expires.
Favorable income tax treatment under which all tax-free cost basis is deemed distributed before any taxable gain is distributed.
The four factors involved in marketing any product or service: product, promotion, place (or position), and price.
Description of option in which the underlying stock’s price is greater than the exercise or strike price when the option expires.
Description of an option in which the underlying stock’s price is less than the exercise or strike price when the option expires.
A pension funding basis in which fund contributions are collected from current employees and are the source of payments to the current retirees.
A situation in which all liability claim holders of a financial institution seek to withdraw their funds simultaneously because they fear that the financial institution will be unable to meet their demands for cash in the near future.
Character, capacity, and capital.
Defined by the Commercial General Liability (CGL) policy as the work or operations performed by or on behalf of the named insured; material and equipment used in connection with the work; and warranties and representations regarding the work.

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A rate that is used by an insurer that is not statistically credible because adequate data do not exist for that particular coverage or class. Such rates are based on the experience and best judgment for each individual loss exposure.
The rate classifications provided by the ISO Commercial Lines Manual that describe operations with unique characteristics or for which inadequate statistical experience exists.

A type of aircraft hull insurance that provides “all-risks” coverage whether or not the aircraft is in flight at the time of loss.
A type of aircraft hull insurance that provides the same coverage as “all risks”—not in motion plus coverage while the aircraft is taxiing.
A type of aircraft hull insurance that provides “all-risks” coverage only while the aircraft is on the ground and not moving under its own power or from any resulting momentum.
A rule used to determine whether a defendant’s act was the proximate cause of a plaintiff’s harm based on the determination that the plaintiff’s harm could not have occurred but for the defendant’s act.
The most the insurer will pay for either damage by a cause other than fire to any one premises rented to the named insured or damage by fire to any one premises rented to the named insured or temporarily occupied by the named insured with the owner's permission.
Unfavorable income tax treatment under which all taxable gain is deemed distributed before any tax-free cost basis is deemed distributed.
In surety bond underwriting, the principal’s character, capacity, and capital.
Defined by the Commercial General Liability (CGL) policy as any goods or products, other than real property, that are manufactured, sold, handled, distributed, or disposed of by the named insured or others trading under the named insured’s name.

1

The surety practice that requires a contractor to have working capital equal to at least 10 percent of backlog. Alternatively referred to as "ten times net quick.”
A surety practice that requires a contractor to explain why the difference between the first and second bids is 10 percent or greater.
An annual sales fee, levied by some mutual funds, taken against fund assets to reimburse the fund for distribution costs.

4

See Section 401(k) plan.
A comparative negligence rule that permits a plaintiff to recover reduced damages so long as the plaintiff’s negligence is less than the other party’s negligence.

5

A comparative negligence rule that permits a plaintiff to recover reduced damages so long as the plaintiff’s negligence is not greater than 50 percent of the total negligence leading to harm.
A state-sponsored, professionally administered savings plan for postsecondary education expenses that accumulates funds that are federal tax deferred and may be exempt from certain state taxes.