Cyber Insurance Glossary

A complete glossary of essential Insurance terms.

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  • SAP
    A set of accounting principles set forth by the National Association of Insurance Commissioners used to prepare statutory financial statements for insurance companies.
  • Statement Value
    The Statutory Accounting Principle book value reduced by any valuation allowance and non-admitted adjustment applied to an individual investment or a similar group of investments, e.g., bonds, mortgage loans, common stock.
  • Statutory Accounting
    Method of accounting standards and principles used by state regulatory authorities to measure the financial condition of regulated companies and other insurance enterprises. This method tends to be more conservative than the Generally Accepted Accounting Principles used by most businesses. Compliance with solvency and other standards is determined using financial documents prepared in accordance with Statutory Accounting Principles.
  • Statutory Accounting Principles
    A set of accounting principles set forth by the National Association of Insurance Commissioners used to prepare statutory financial statements for insurance companies.
  • Structured Securities
    Loan-backed securities that have been divided into two or more classes of investors where the payment of interest and/or principal of any class of securities has been allocated in a manner that is not proportional to interest and/or principal received by the issuer from the mortgage pool or other underlying securities.
  • Structured Settlements
    Periodic fixed payments to a claimant for a determinable period, or for life, for the settlement of a claim.
  • Subrogation
    Situation where an insurer, on behalf of the insured, has a legal right to bring a liability suit against a third party who caused losses to the insured. Insurer maintains the right to seek reimbursement for losses incurred by insurer at the fault of a third party.
  • Subrogation Clause
    Section of insurance policies giving an insurer the right to take legal action against a third party responsible for a loss to an insured for which a claim has been paid.
  • Subsequent Event
    Events or transactions that occur subsequent to the balance sheet date, but before the issuance of the statutory financial statements and before the date the audited financial statements are issued, or available to be issued.
  • Substandard Risk
    Impaired risk) risks deemed undesirable due to medical condition or hazardous occupation requiring the use of a waiver, a special policy form, or a higher premium charge.
  • Surety Bond
    A three-party agreement whereby a guarantor (insurer) assumes an obligation or responsibility to pay a second party (obligee) should the principal debtor (obligor) become in default.
  • Surplus
    Insurance term referring to retained earnings.
  • Surplus Line
    Specialized property or liability coverage available via non-admitted insurers where coverage is not available through an admitted insurer, licensed to sell that particular coverage in the state.
  • Swap
    An agreement to exchange or net payments as the buyer of an Option, Cap or Floor and to make payments as the seller of a different Option, Cap or Floor.
  • Tenants
    A person(s) who occupies land or property rented from a landlord.
  • Term
    Period of time for which policy is in effect.
  • Term Insurance
    Life insurance payable only if death of insured occurs within a specified time, such as 5 or 10 years, or before a specified age.
  • Third Party
    Person other than the insured or insurer who has incurred losses or is entitled to receive payment due to acts or omissions of the insured.
  • Title Insurance
    Coverage that guarantees the validity of a title to real and personal property. Buyers of real and personal property and mortgage lenders rely upon the coverage to protect them against losses from undiscovered defects in existence when the policy is issued.
  • Total Liabilities
    Total money owed or expected to be owed by the insurance company.
  • Total Revenue
    Premiums, revenue, investment income, and income from other sources.
  • Travel Coverage
    Covers financial loss due to trip cancellation/interruption; lost or damaged baggage; trip or baggage delays; missed connections and/or changes in itinerary; and casualty losses due to rental vehicle damage.
  • Treaty
    A reinsurance agreement between the ceding company and reinsurer.
  • ULAE
    Loss adjustment expenses that cannot be specifically tied to a claim.
  • Unallocated Loss Adjustment Expense
    Loss adjustment expenses that cannot be specifically tied to a claim.
  • Unauthorized Reinsurance
    Reinsurance placed with a company not authorized in the reporting company's state of domicile.
  • Underlying Interest
    The asset(s), liability(ies) or other interest(s) underlying a derivative instrument, including, but not limited to, any one or more securities, currencies, rates indices, commodities, derivative instruments, or other financial market instruments.
  • Underwriter
    Person who identifies, examines and classifies the degree of risk represented by a proposed insured in order to determine whether or not coverage should be provided and, if so, at what rate.
  • Underwriting
    The process by which an insurance company examines risk and determines whether the insurer will accept the risk or not, classifies those accepted and determines the appropriate rate for coverage provided.
  • Underwriting Risk
    Section of the risk-based capital formula calculating requirements for reserves and premiums.
  • Unearned Premium
    Amount of premium for which payment has been made by the policyholder but coverage has not yet been provided.
  • Unearned Premium Reserve
    All premiums (fees) received for coverage extending beyond the statement date; appears as a liability on the balance sheet.
  • Unpaid Losses
    Claims that are in the course of settlement. The term may also include claims that have been incurred but not reported.
  • Valued Policy
    An insurance contract for which the value is agreed upon in advance and is not related to the amount of the insured loss.
  • Valued Policy Law
    State legislation which specifies that the insured shall receive the face amount of the policy in the event of a total loss to a dwelling rather than the actual cash value regardless of the principle of indemnity.
  • Variable Annuity
    An annuity contract under which the premium payments are used to purchase stock and the value of each unit is relative to the value of the investment portfolio.
  • Viatical Settlements
    Contracts or agreements in which a buyer agrees to purchase all or a part of a life insurance policy.
  • Warrant
    An agreement that gives the holder the right to purchase an underlying financial instrument at a given price and time or at a series of prices and times according to a schedule or warrant agreement.
  • Warranty
    Coverage that protects against manufacturer's defects past the normal warranty period and for repair after breakdown to return a product to its originally intended use. Warranty insurance generally protects consumers from financial loss caused by the seller's failure to rectify or compensate for defective or incomplete work and cost of parts and labor necessary to restore a product's usefulness. Includes but is not limited to coverage for all obligations and liabilities incurred by a service contract provider, mechanical breakdown insurance and service contracts written by insurers.
  • Written Premium
    The contractually determined amount charged by the reporting entity to the policyholder for the effective period of the contract based on the expectation of risk, policy benefits, and expenses associated with the coverage provided by the terms of the insurance contract.