Cyber Insurance Glossary

an aggregate of the accounting standards, principles and best practices for the preparation of financial statements allowing for consistency in reporting.

the difference between the cost of acquiring the entity and the reporting entity's share of the book value of the acquired entity

act, repealing Glass-Steagal Act of 1933, allows consolidation of commercial banks, investment institutions and insurance companies. Established a framework of responsibilities of federal and state regulators for these financial industries. It permits financial services companies to merge and engage in a variety of new business activities, including insurance, while attempting to address the regulatory issues raised by such combinations.

amount of capital received in excess of the par value of the stock issued.

the net premium for insurance plus commissions, operating and miscellaneous commissions. For life insurance, this is the premium including dividends

an annuity contract that provides an accumulation based on both (1) funds that accumulate based on a guaranteed crediting interest rates or additional interest rate applied to designated considerations, and (2) funds where the accumulation vary in accordance with the rate of return of the underlying investment portfolio selected by the policyholder. The contract provides for the initiation of payments at some designated future date.

an annuity contract that provides an accumulation based on both (1) funds that accumulate based on a guaranteed crediting interest rates or additional interest rate applied to designated considerations, and (2) funds where the accumulation vary in accordance with the rate of return of the underlying investment portfolio selected by the policyholder. The contract provides for the initiation of payments at some interval that may vary, however the annuity payouts must begin within 13 months.

annuity contracts or portions thereof where the Insurer purchases an annuity for the retirees

a contract providing income for a specified period of time, or duration of life for a person or persons established to benefit a group of employees

a unique three to five digit number assigned by the NAIC to identify those companies that are part of a larger group of insurance companies.

contracts sold in connection with loan/credit transactions or other credit transactions, which do not exceed a stated duration and/or amount and provide insurance protection against death.

health insurance issued to employers, associations, trusts, or other groups covering employees or members and/or their dependents, to whom a certificate of coverage may be provided.

funding mechanism employed by states to provide funds to cover policyholder obligations of insolvent reporting entities.

a market characterized by high demand and low supply

circumstance which tends to increase the probability or severity of a loss.

A risk transfer mechanism whereby one party assumes the liability of another party by contract

a life insurance and annuity provision limiting the time within which the insurer has the legal right to void the contract on grounds of material misrepresentation in the policy application

(Pure IBNR) claims that have occurred but the insurer has not been notified of them at the reporting date. Estimates are established to book these claims. May include losses that have been reported to the reporting entity but have not yet been entered into the claims system or bulk provisions. Bulk provisions are reserves included with other IBNR reserves to reflect deficiencies in known case reserves. IBNR can sometimes include estimates of incurred but Not Enough Reported (IBNER)

paid claims plus amounts held in reserve for those that have been incurred but not yet paid.

sustained losses, paid or not, during a specified time period. Incurred losses are typically found by combining losses paid during the period plus unpaid losses sustained during the time period minus outstanding losses at the beginning of the period incurred in the previous period.

a general legal principle related to insurance that holds that the individual recovering under an insurance policy should be restored to the approximate financial position he or she was in prior to the loss. Legal principle limiting compensation for damages be equivalent to the losses incurred.

freelance contractor paid a fee for adjusting losses on behalf of companies.

a representative of multiple insurance companies who sells and services policies for records which they own and operate under the American Agency System.

an individual who is not employed for a company but instead works for themselves providing goods or services to clients for a fee.

an interest bearing fixed annuity tied to an equity index, such as the Dow Jones Industrial Average or S & P 500.

an annuity contract that provides an accumulation based on both (1) funds that accumulate based on a guaranteed crediting interest rates or additional interest rate applied to designated considerations, and (2) funds where the accumulation vary in accordance with the rate of return of the underlying investment portfolio selected by the policyholder. The contract provides for the initiation of payments at some designated future date.

an annuity contract that provides an accumulation based on both (1) funds that accumulate based on a guaranteed crediting interest rates or additional interest rate applied to designated considerations, and (2) funds where the accumulation vary in accordance with the rate of return of the underlying investment portfolio selected by the policyholder. The contract provides for the initiation of payments at some interval that may vary, however the annuity payouts must begin within 13 months.

makes monthly loan/credit transaction payments to the creditor upon the disablement of an insured debtor.

contracts sold in connection with loan/credit transactions or other credit transactions, which do not exceed a stated duration and/or amount and provide insurance protection against death.

health insurance where the policy is issued to an individual covering the individual and/or their dependents in the individual market. This includes conversions from group policies.

Industrial life insurance, also called "debit" insurance, is insurance under which premiums are paid monthly or more often, the face amount of the policy does not exceed a stated amount, and the words "industrial policy" are printed in prominent type on the face of the policy.

A right or relationship in regard to the subject matter of the insured contract such that the insured can suffer a financial loss from damage, loss or destruction to it. (Bickelhaupt and Magee )

an economic device transferring risk from an individual to a company and reducing the uncertainty of risk via pooling

consists of two or more affiliated persons, one or more of which is an insurer.

a baseline solvency screening system for the National Association of Insurance Commissioners (NAIC) and state insurance regulators established in the mid-1970s.

Amount of insurance purchased vs. the actual replacement cost of the insured property expressed as a ratio.

party(ies) covered by an insurance policy

an insurer or reinsurer authorized to write property and/or casualty insurance under the laws of any state.

a person, corporation or other business entity (not licensed as a medical provider) that arranges, by contracts with physicians and other licensed medical providers, to deliver health services for a health insurer and its enrollees via a separate contract between the intermediary and the insurer.

includes all business transacted outside the U.S. and its territories and possessions where the appropriate line of business is not determinable.

Coverage for cyber commerce including copyright infringement, libel, and violation of privacy

The obligation has been determined to be in one of the top four generic lettered rating classifications by a securities rating agency acceptable to the commissioner, that the obligation has been identified in writing by such a rating agency to be of investment grade quality, or, if the obligation has not been submitted to any such rating agency, that the obligation has been determined to be investment grade (Class 1 and Class 2) by the Securities Valuation Office of the National Association of Insurance Commissioners.

investment income earned as of the reporting date but not legally due to be paid to the reporting entity until subsequent to the reporting date.

investment income earned and legally due to be paid to the reporting entity as of the reporting date

shall be recorded as earned and shall include investment income collected during the period, the change in investment income due and accrued, the change in unearned investment income plus any amortization (e.g., discounts or premiums on bonds, origination fees on mortgage loans, etc.)

a life insurance policy beneficiary who has a vested interest in the policy proceeds even during the insured's lifetime because the policy owner has the right to change the beneficiary designation only after obtaining the beneficiary's consent.

retirement plan that continues to payout so long as at least one, of two or more, annuitants is alive.

an annuity contract that ceases upon the death of the first of two or more annuitants.

a loss-sharing mechanism combining several insurance companies to provide extra capacity due to type or size of exposure.

a policy purchased by, for the benefit of, a business insuring the life or lives of personnel integral to the business operations