An individual, often holding a professional designation, who computes statistics relating to insurance. Actuaries are most frequently used to estimate loss reserves (for both insurers and self-insureds) and to determine premiums for various coverage lines. Professional designations are awarded by the Casualty Actuarial Society and the Society of Actuaries.
Coverage applies to the “actual loss sustained” by the insured as a result of a covered loss.
An insurance company licensed to do business in a specified jurisdiction to underwrite insurance in that jurisdiction.
A form of reinsurance that requires participation by the reinsurer when aggregate excess losses for the primary insurer exceed a certain stated retention level.
An insurance contract provision limiting the maximum liability of an insurer for a series of losses in a given time period, e.g., a year or for the entire period of the contract. Aggregate limits may be equal to or greater than the per occurrence or per accident policy limit. An insurance policy may have one or more aggregate limits. For example, the standard commercial general liability policy has two: the general aggregate that applies to all claims except those that fall in the products-completed operations hazard and a separate products-completed operations aggregate.
A term commonly used in risk financing to refer to one of a number of risk funding techniques (e.g., self-insurance, captive) or facilities that provide coverages or services outside the realm of those provided by most traditional property and casualty insurers. The alternative market may be utilised by large corporations, for example, to provide high limits of coverage over a large self-insured retention. It may also be utilised by groups of smaller entities, for example, participating in a risk retention group or group captive programme. Note that the distinction between traditional and alternative markets tends to blur over time as many traditional insurers have expanded their offering of products to encompass alternative-type funding techniques, and vice versa. Finally, retrospective funding plans, especially paid loss plans, are sometimes identified with the alternative market.
A captive insurance company formed and owned by a trade or professional association.
The point at which excess insurance or reinsurance limits apply. For example, a captive's retention may be $250,000. This is the attachment point at which excess reinsurance limits would apply.
A reinsurance treaty under which the ceding company must transfer exposures of a defined class that the reinsurer must accept in accordance with the terms of the treaty.