Professional Insurance Agents of Georgia

The Professional Insurance Agents of Georgia (PIA of Georgia) was established to promote the prosperity, growth, and perpetuation of our members as professionals in the Georgia insurance industry.

Independent Insurance Agents of Georgia

The Independent Insurance Agents of Georgia (IIAG) has been devoted to the advancement of independent insurance agents and professionalism within the industry, offering unparalledled opportunities and unrelenting advocacy for agents at home and in Washington, D.C.

Towing & Recovery Association of Georgia 

Having displayed courteous and professional service, having adhered to the Association’s Creed of Good Conduct, and having met all requirements to be considered a member in good standing Hamby & Aloisio, Inc are proud members of The Towing & Recovery Association of Georgia.

Insurance Commission of Georgia

The state of Georgia is part of the U.S. insurance regulatory framework which is a highly coordinated state-based national system designed to protect policyholders and to serve the greater public interest through the effective regulation of the U.S. insurance marketplace.

Insurance Definitions

A

Accident – an unexpected event or circumstance without deliberate intent.

Accident Only – an insurance contract that provides coverage, singly or in combination, for death, dismemberment, disability, or hospital and medical care caused by or necessitated as a result of accident or specified kinds of accident.

Accidental Bodily Injury – unexpected injury to a person.

Accidental Death & Dismemberment – an insurance contract that pays a stated benefit in the event of death and/or dismemberment caused by accident or specified kinds of accidents.

Accumulation Period – period of time insured must incur eligible medical expenses at least equal to the deductible amount in order to establish a benefit period under a major medical expense or comprehensive medical expense policy.

Actual Cash Value – repayment value for indemnification due to loss or damage of property; in most cases it is replacement cost minus depreciation

Admission – hospital inpatient care for any medical condition.

Aggregate – the maximum dollar amount or total amount of coverage payable for a single loss, or multiple losses, during a policy period, or on a single project.

All-Risk – also known as open peril, this type of policy covers a broad range of losses. The policy covers risks not explicitly excluded in the policy contract.

Ambulatory Services– health services provided to members who are not confined to a health care institution. Ambulatory services are often referred to as “outpatient” services.

Annual Statement – an annual report required to be filed with each state in which an insurer does business. This report provides a snapshot of the financial condition of a company and significant events which occurred throughout the reporting year.

Annuitant – the beneficiary of an annuity payment, or person during whose life and annuity is payable.

Annuities – Immediate Non-variable – an annuity contract that provides for the fixed payment of the annuity at the end of the first interval of payment after purchase. The interval may vary, however the annuity payouts must begin within 13 months.

Annuity – a contract providing income for a specified period of time, or duration of life for a person or persons.

Appraisal – an estimate of value.

Arbitration – a binding dispute resolution tactic whereby a conciliator with no interest in the outcome intercedes.

Assessed Value – estimated value for real or personal property established by a taxing entity

Asset – probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events. An asset has three essential characteristics: It embodies a probable future benefit that involves a capacity, singly or in combination with other assets, to contribute directly or indirectly to future net cash inflows; A particular entity can obtain the benefit and control others’ access to it; and The transaction or other event-giving rise to the entity’s right to or control of the benefit has already occurred.

Asset Risk– in the risk-based capital formula, risk assigned to the company’s assets.

Assigned Risk – A governmental pool established to write business declined by carriers in the standard insurance market.

Assisted Living Care – a policy or rider that provides coverage only while a policyholder is confined to an assisted living facility and meets the policy requirements for coverage.

Auto Liability – coverage that protects against financial loss because of legal liability for motor vehicle related injuries (bodily injury and medical payments) or damage to the property of others caused by accidents arising out of ownership, maintenance or use of a motor vehicle (including recreational vehicles such as motor homes). Commercial is defined as all motor vehicle policies that include vehicles that are used primarily in connection with business, commercial establishments, activity, employment, or activities carried on for gain or profit. No Fault is defined by the state concerned.

Auto Physical Damage – motor vehicle insurance coverage (including collision, vandalism, fire and theft) that insures against material damage to the insured’s vehicle. Commercial is defined as all motor vehicle policies that include vehicles that are used in connection with business, commercial establishments, activity, employment, or activities carried on for gain or profit.

Automobile Liability Insurance – coverage for bodily injury and property damage incurred through ownership or operation of a vehicle.

B

BCEGS – Building Code Effectiveness Grading Schedule – classification system for assessment of building codes per geographic region with special emphasis on mitigation of losses from natural disasters.

Beneficiary – an individual who may become eligible to receive payment due to will, life insurance policy, retirement plan, annuity, trust, or other contract.

Benefits (Medical & Hospital Expenses)– total expenditures for health care services paid to or on behalf of a member.

Blanket coverage – coverage for property and liability that extends to more than one location, class of property or employee.

Boatowners/Personal Watercraft – covers damage to pleasure boats, motors, trailers, boating equipment and personal watercraft as well as bodily injury and property damage liability to others.

Bodily Injury – physical injury including sickness or disease to a person.

Boiler & Machinery or Equipment Breakdown & Machinery – coverage for the failure of boilers, machinery and other electrical equipment. Benefits include (i) property of the insured, which has been directly damaged by the accident; (ii) costs of temporary repairs and expediting expenses; and (iii) liability for damage to the property of others. Coverage also includes inspection of the equipment.

Bonds – a form of debt security whereby the debt holder has a creditor stake in the company. Obligations issued by business units, governmental units and certain nonprofit units having a fixed schedule for one or more future payments of money; includes commercial paper, negotiable certificates of deposit, repurchase agreements and equipment trust certificates.

Builders’ Risk Policies – typically written on a reporting or completed value form, this coverage insures against loss to buildings in the course of construction. The coverage also includes machinery and equipment used in the course of construction and to materials incidental to construction.

Burglary and Theft – coverage for property taken or destroyed by breaking and entering the insured’s premises, burglary or theft, forgery or counterfeiting, fraud, kidnap and ransom, and off-premises exposure.

Business Auto – coverage for motor vehicles, other than those in the garage business, engaged in commerce. Business auto filings include singularly or in any combination coverage such as the following: Auto Liability, PIP, MP, Uninsured Motorist and/or Underinsured Motorists (UM/UIM); Specified Causes of Loss, Comprehensive, and Collision.

Business Interruption – loss of income as a result of property damage to a business facility.

Business owners Policy – business insurance typically for property, liability and business interruption coverage.

C

Calendar Year Deductible – in health insurance, the amount that must be paid by the insured during a calendar year before the insurer becomes responsible for further loss costs.

Carrying Value (Amount)– the SAP book value plus accrued interest and reduced by any valuation allowance and any nonadmitted adjustment applied to the individual investment.

Cash Equivalent– short-term, highly liquid investments that are both (a) readily convertible to known amounts of cash, and (b) so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Investments with original maturities of three months or less qualify under this definition.

Casualty Insurance – a form of liability insurance providing coverage for negligent acts and omissions such as workers compensation, errors and omissions, fidelity, crime, glass, boiler, and various malpractice coverages.

Catastrophe Bonds – Bonds issued by an insurance company with funding tied to the company’s losses from disasters, or acts of God. A loss exceeding a certain size triggers a reduction in the bond value or a change in the bond structure as loss payments are paid out of bond funds.

Catastrophe Loss – a large magnitude loss with little ability to forecast.

Centers for Medicare & Medicaid Services (CMS)– U.S. governmental agency responsible for the licensing of federally qualified HMOs. This was formerly the Health Care Financing Administration.

Change in Valuation Basis– a change in the interest rate, mortality assumption or reserving method or other factors affecting the reserve computation of policies in force.

Claim – a request made by the insured for insurer remittance of payment due to loss incurred and covered under the policy agreement.

Claims Adjustment Expenses– costs expected to be incurred in connection with the adjustment and recording of accident and health, auto medical and workers’ compensation claims.

Claims-made Form – A type of liability insurance form that only pays if the both event that causes (triggers)the claim and the actual claim are submitted to the insurance company during the policy term

Class Rating – a method of determining rates for all applicants within a given set of characteristics such as personal demographic and geographic location.

Coinsurance – A clause contained in most property insurance policies to encourage policy holders to carry a reasonable amount of insurance. If the insured fails to maintain the amount specified in the clause (Usually at least 80%), the insured shares a higher proportion of the loss. In medical insurance a percentage of each claim that the insured will bear.

Collar – an agreement to receive payments as the buyer of an Option, Cap or Floor and to make payments as the seller of a different Option, Cap or Floor.

Collateral Loans– unconditional obligations for the payment of money secured by the pledge of an investment.

Combined Ratio – an indication of the profitability of an insurance company, calculated by adding the loss and expense ratios.

Commercial Auto – coverage for motor vehicles owned by a business engaged in commerce that protects the insured against financial loss because of legal liability for motor vehicle related injuries, or damage to the property of others caused by accidents arising out of the ownership, maintenance, use, or care-custody & control of a motor vehicle. This includes Commercial Auto Combinations of Business Auto, Garage, Truckers and/or Other Commercial Auto.

Commercial Earthquake – earthquake property coverage for commercial ventures.

Commercial Farm and Ranch – a commercial package policy for farming and ranching risks that includes both property and liability coverage. Coverage includes barns, stables, other farm structures and farm inland marine, such as mobile equipment and livestock.

Commercial Flood – separate flood insurance policy sold to commercial ventures.

Commercial General Liability – flexible & broad commercial liability coverage with two major sub-lines: premises/operations sub-line and products/completed operations sub-line.

Commercial Mortgage-Backed Securities– a type of mortgage-backed security that is secured by the loan on a commercial property.

Commercial Multiple Peril– policy that packages two or more insurance coverages protecting an enterprise from various property and liability risk exposures. Frequently includes fire, allied lines, various other coverages (e.g., difference in conditions) and liability coverage. Such coverages would be included in other annual statement lines, if written individually. Include under this type of insurance multi-peril policies (other than farmowners, homeowners and automobile policies) that include coverage for liability other than auto.

Commercial Package Policy – provides a broad package of property and liability coverages for commercial ventures other than those provided insurance through a business owners policy.

Commercial Property – property insurance coverage sold to commercial ventures.

Completed Operations Liability – policies covering the liability of contractors, plumbers, electricians, repair shops, and similar firms to persons who have incurred bodily injury or property damage from defective work or operations completed or abandoned by or for the insured, away from the insured’s premises.

Comprehensive (Hospital and Medical)– line of business providing for medical coverages; includes hospital, surgical, major medical coverages; does not include Medicare Supplement, administrative services (ASC) contracts, administrative services only (ASO) contracts, federal employees health benefit plans (FEHBP), medical only programs, Medicare and Medicaid programs, vision only and dental only business.

Comprehensive General Liability (CGL) – coverage of all business liabilities unless specifically excluded in the policy contract.

Comprehensive Personal Liability – comprehensive liability coverage for exposures arising out of the residence premises and activities of individuals and family members. (Non-business liability exposure protection for individuals.)

Comprehensive/Major Medical – policies that provide fully insured indemnity, HMO, PPO, or Fee for Service coverage for hospital, medical, and surgical expenses. Coverage excludes Short-Term Medical Insurance, the Federal Employees Health Benefit Program and non-comprehensive coverage such as basic hospital only, medical only, hospital confinement indemnity, surgical, outpatient indemnity, specified disease, intensive care, and organ and tissue transplant coverage.

Conditions – requirements specified in the insurance contract that must be upheld by the insured to qualify for indemnification.

Condos – homeowners insurance sold to condominium owners occupying the described property.

Construction and Alteration Liability – covering the liability of an insured to persons who have incurred bodily injury or property damage from alterations involving demolition, new construction or change in size of a structure on the insured’s premises.

Contingency Reserves– required by some jurisdictions as a hedge against adverse experience from operations, particularly adverse claim experience.

Contingent Liability – the liability of an insured to persons who have incurred bodily injury or property damage from work done by an independent contractor hired by the insured to perform work that was illegal, inherently dangerous, or directly supervised by the insured

Continuation of Care Requirement– statutory or contractual provision requiring providers to deliver care to an enrollee for some period following the date of a Health Plan Company’s insolvency.

Continuing Care Retirement Communities – senior housing arrangements that in addition to housing include some provision for skilled nursing care.

Contractual Liability – liability coverage of an insured who has assumed the legal liability of another party by written or oral contract. Includes a contractual liability policy providing coverage for all obligations and liabilities incurred by a service contract provider under the terms of service contracts issued by the provider.

Convertible Term Insurance Policy – an insurance policy that can be converted into permanent insurance without a medical assessment. The insurer is required to renew the policy regardless of the health of the insured subject to policy conditions.

Coordination of Benefits (COB)– provision to eliminate over insurance and establish a prompt and orderly claims payment system when a person is covered by more than one group insurance and/or group service plan.

Copay – a cost sharing mechanism in group insurance plans where the insured pays a specified dollar amount of incurred medical expenses and the insurer pays the remainder.

Corrective Order – commissioner’s directive of action to be completed by an insurer.

Covered Lives – The total number of lives insured, including dependents, under individual policies and group certificates.

Crop – coverage protecting the insured against loss or damage to crops from a variety of perils, including but not limited to fire, lightening, loss of revenue, tornado, windstorm, hail, flood, rain, or damage by insects.

Crop-Hail Insurance – coverage for crop damage due to hail, fire or lightning.

 

D

Date of Issue– date when an insurance company issues a policy.

Declarations – policy statements regarding the applicant and property covered such as demographic and occupational information, property specifications and expected mileage per year .

Deductible – Portion of the insured loss (in dollars) paid by the policy holder

Deferred Annuity – annuity payment to be made as a single payment or a series of installments to begin at some future date, such as in a specified number of years or at a specified age.

Dental Insurance – policies providing only dental treatment benefits such as routine dental examinations, preventive dental work, and dental procedures needed to treat tooth decay and diseases of the teeth and jaw.

Dental Only– line of business providing dental only coverage; coverage can be on a stand-alone basis or as a rider to a medical policy. If the coverage is as a rider, deductibles or out-of-pocket limits must be set separately from the medical coverage. Does not include self-insured business as well as FEHBP or Medicare and Medicaid programs.

Difference In Conditions (DIC) Insurance – special form of open-peril coverage written in conjunction with basic fire coverage and designed to provide protection against losses not reimbursed under the standard fire forms. Examples are flood and earthquake coverage.

Directors & Officers Liability – liability coverage protecting directors or officers of a corporation from liability arising out of the performance of their professional duties on behalf of the corporation.

Disability Income – a policy designed to compensate insured individuals for a portion of the income they lose because of a disabling injury or illness.

Disability Income – Long-Term – policies that provide a weekly or monthly income benefit for more than five years for individual coverage and more than one year for group coverage for full or partial disability arising from accident and/or sickness.

Disability Income – Short-Term – policies that provide a weekly or monthly income benefit for up to five years for individual coverage and up to one year for group coverage for full or partial disability arising from accident and/or sickness.

Dividend – a refund of a portion of the premium paid by the insured from insurer surplus.

Dual Interest – insurance that protects the creditor’s and the debtor’s interest in the collateral securing the debtor’s credit transaction. “Dual Interest” includes insurance commonly referred to as “Limited Dual Interest.”

Dwelling Property/Personal Liability – a special form of package policy composed of dwelling fire and/or allied lines, and personal liability insurance.

E

Early warning system – a system designed by insurance industry regulators of identifying practices and risk-related trends that contribute to systemic risk by measuring insurer’ financial stability.

Earned Premium – portion of insured’s prepaid premium allocated to the insurance company’s loss experience, expenses, and profit year- to -date.

Earthquake – property coverages for losses resulting from a sudden trembling or shaking of the earth, including that caused by volcanic eruption. Excluded are losses resulting from fire, explosion, flood or tidal wave following the covered event.

EDP Policies – coverage to protect against losses arising out of damage to or destruction of electronic data processing equipment and its software.

Effective Date– date at which an insurance policy goes into force.

Elevators and Escalators Liability – liability coverage for bodily injury or property damage arising from the use of elevators or escalators operated, maintained or controlled by the insured.

Employee Benefit Liability – liability protection for an employer for claims arising from provisions in an employee benefit insurance plan provided for the economic and social welfare of employees. Examples of items covered are pension plans, group life insurance, group health insurance, group disability income insurance, and accidental death and dismemberment.

Employee Retirement Income Security Act of 1974 (ERISA) – a federal statute governing standards for private pension plans, including vesting requirements, funding mechanisms, and plan design.

Employers Liability – employers’ liability coverage for the legal liability of employers arising out of injuries to employees. This code should be used when coverage is issued as an endorsement, or as part of a statutory workers’ compensation policy.

Employment Practices Liability Coverage – liability insurance for employers providing coverage for wrongful termination, discrimination, or sexual harassment of the insured’s current or former employees.

Endorsement – an amendment or rider to a policy adjusting the coverages and taking precedence over the general contract.

Enrollment – The total number of plans, not the total number of covered lives, providing coverage to the enrollee and their dependents.

Environmental Impairment Liability (EIL)– coverage for negligence or omission resulting in pollution or environmental contamination.

Environmental Pollution Liability – liability coverage of an insured to persons who have incurred bodily injury or property damage from acids, fumes, smoke, toxic chemicals, waste materials or other pollutants.

Equity Indexed Annuity – a fixed annuity that earns interest or provides benefits that are linked to an external reference or equity index, subject to a minimum guarantee.

Errors and Omissions Liability | Professional Liability other than Medical – liability coverage of a professional or quasi professional insured to persons who have incurred bodily injury or property damage, or who have sustained any loss from omissions arising from the performance of services for others, errors in judgment, breaches of duty, or negligent or wrongful acts in business conduct.

Excess and Umbrella Liability – liability coverage of an insured above a specific amount set forth in a basic policy issued by the primary insurer; or a self insurer for losses over a stated amount; or an insured or self insurer for known or unknown gaps in basic coverages or self insured retentions.

Excess of Loss Reinsurance – loss sharing mechanism where an insurer pays all claims up to a specified amount and a reinsurance company pays any claims in excess of stated amount.

Excess Workers’ Compensation – either specific and/or aggregate excess workers’ compensation insurance written above an attachment point or self-insured retention.

Expense Ratio – percentage of premium income used to attain and service policies. Derived by subtracting related expenses from incurred losses and dividing by written premiums.

Experience Rating– rating system where each group is rated entirely on the basis of its own expected claims in the coming period, with retrospective adjustments for prior periods. This method is prohibited under the conditions for federal qualification.

Exposure – risk of possible loss.

Extra Expense Insurance – a type of property insurance for extraordinary expenses related to business interruption such as a back-up generator in case of power failure.

F

Fair Value– the amount at which an asset (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale. Quoted market prices in active markets are the best evidence of fair value and shall be used as the basis for the measurement, if available. If a quoted market price is available, the fair value is the product of the number of trading units times market price.

Farmowners Insurance – farmowners insurance sold for personal, family or household purposes. This package policy is similar to a homeowners policy, in that it has been developed for farms and ranches and includes both property and liability coverage for personal and business losses. Coverage includes farm dwellings and their contents, barns, stables, other farm structures and farm inland marine, such as mobile equipment and livestock.

Federal Flood Insurance – coverage for qualifying residents and businesses in flood prone regions through the National Flood Insurance Act, a federally subsidized flood insurance program enacted in 1968.

Fees Payable – fees incurred but not yet paid.

FEMA – Federal Emergency Management Agency – an independent agency, tasked with responding to, planning for, mitigating and recovery efforts of natural disasters.

Fidelity – a bond or policy covering an employer’s loss resulting from an employee’s dishonest act (e.g., loss of cash, securities, valuables, etc.).

Financial Guaranty – a surety bond, insurance policy, or an indemnity contract (when issued by an insurer), or similar guaranty types under which loss is payable upon proof of occurrence of financial loss to an insured claimant, obligee or indemnitee as a result of failure to perform a financial obligation or any other permissible product that is defined as or determined to be financial guaranty insurance.

Financial Responsibility Law – a statute requiring motorists to show capacity to pay for automobile-related losses.

Financial Statement– balance sheet and profit and loss statement of an insurance company. This statement is used by the NAIC, and by State Insurance Commissioners to regulate an insurance company according to reserve requirements, assets, and other liabilities.

Fire – coverage protecting the insured against the loss to real or personal property from damage caused by the peril of fire or lightning, including business interruption, loss of rents, etc.

Fire Legal Liability – coverage for property loss liability as the result of separate negligent acts and/or omissions of the insured that allows a spreading fire to cause bodily injury or property damage of others. An example is a tenant who, while occupying another party’s property, through negligence causes fire damage to the property.

Flood – coverage protecting the insured against loss or damage to real or personal property from flood. (Note: If coverage for flood is offered as an additional peril on a property insurance policy, file it under the applicable property insurance filing code.)

Foreign Insurer – an insurance company selling policies in a state other than the state in which they are incorporated or domiciled.

Foreign Investment – an investment in a foreign jurisdiction, or an investment in a person, real estate or asset domiciled in a foreign jurisdiction. An investment shall not be deemed to be foreign if the issuing person, qualified primary credits source or qualified guarantor is a domestic jurisdiction or a person domiciled in a domestic jurisdiction, unless: a) The issuing person is a shell business entity; and b) The investment is not assumed, accepted, guaranteed or insured or otherwise backed by a domestic jurisdiction or a person, that is not a shell business entity, domiciled in a domestic jurisdiction.

Foreign jurisdiction – a jurisdiction outside of the United States, Canada or any province or political subdivision of the foregoing.

Fraternal Insurance – a form of group coverage or disability insurance available to members of a fraternal organization.

G

Gramm-Leach Bliley Act (GLBA) – 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.

Goodwill – the difference between the cost of acquiring the entity and the reporting entity’s share of the book value of the acquired entity.

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

Group Accident and Health – coverage written on a group basis (e.g., employees of a single employer and their dependents) that pays scheduled benefits or medical expenses caused by disease, accidental injury or accidental death. Excludes amounts attributable to uninsured accidents and health plans and the uninsured portion of partially insured accident and health plans.

Group Annuity – 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.

Group Health– 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.

Group Credit – Life – 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.

Group Health Organizations – Health Maintenance (HMO) – a plan under which an enrollee pays a membership fixed fee in advance in return for a wide range of comprehensive health care services with the HMO’s approved providers in a designated service area.

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

H

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

Health – Excess/Stop Loss – this type of insurance may be extended to either a health plan or a self-insured employer plan. Its purpose is to insure against the risk that any one claim will exceed a specific dollar amount or that an entire plan’s losses will exceed a specific amount.

Health Insurance – a generic term applying to all types of insurance indemnifying or reimbursing for losses caused by bodily injury or illness including related medical expenses.

Health Maintenance Organization (HMO)– a medical group plan that provides physician, hospital, and clinical services to participating members in exchange for a periodic flat fee.

Health Plan– written promise of coverage given to an individual, family, or group of covered individuals, where a beneficiary is entitled to receive a defined set of health care benefits in exchange for a defined consideration, such as a premium.

Hold-Harmless Agreement – A risk transfer mechanism whereby one party assumes the liability of another party by contract

Homeowners Insurance – a package policy combining real and personal property coverage with personal liability coverage. Coverage applicable to the dwelling, appurtenant structures, unscheduled personal property and additional living expense are typical. Includes mobile homes at a fixed location.

Hospital Indemnity Coverage– coverage that provides a pre-determined, fixed benefit or daily indemnity for contingencies based on a stay at a hospital or intensive care facility.

Hull Insurance – coverage for damage to a vessel or aircraft and affixed items.

I

Incontestability Provision – 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.

Incurred But Not Reported (IBNR)– (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)

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

Incurred Losses – 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.

Indemnity, Principle of – 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.

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

Individual Health – 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– 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.

Inland Marine – coverage for property that may be in transit, held by a bailee, at a fixed location, a movable good that is often at different locations (e.g., off road constructions equipment), or scheduled property (e.g., Homeowners Personal Property Floater) including items such as live animals, property with antique or collector’s value, etc. This line also includes instrumentalities of transportation and communication, such as bridges, tunnels, piers, wharves, docks, pipelines, power and phone lines, and radio and television towers.

Insurable Interest – 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 )

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

Insurance Holding Company System– consists of two or more affiliated persons, one or more of which is an insurer.

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

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

Insured – party(ies) covered by an insurance policy.

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

Intermediary – 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.

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

Internet Liability Insurance/Cyber Insurance – coverage for cyber commerce including copyright infringement, libel, and violation of privacy.

Investment grade – 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.

Irrevocable Beneficiary – 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.

J

Joint and Last Survivor Annuity – retirement plan that continues to payout so long as at least one, of two or more, annuitants is alive.

Joint-Life Annuity – an annuity contract that ceases upon the death of the first of two or more annuitants.

K

Key-Persons Insurance – a policy purchased by, for the benefit of, a business insuring the life or lives of personnel integral to the business operations.

Kidnap/Ransom Insurance – coverage for ransom or extortion costs and related expenses.

L

Lapse – termination of a policy due to failure to pay the required renewal premium.

Liability – a certain or probable future sacrifice of economic benefits arising from present obligations of a particular entity to transfer assets or to provide services to other entities in the future as a result of a past transactions(s) or event(s). three essential characteristics: a)    It embodies a present duty or responsibility to one or more other entities that entails settlement by probable future transfer or use of assets at a specified or determinable date, on occurrence of a specified event, or on demand; b)    The duty or responsibility obligates a particular entity, leaving it little or no discretion to avoid the future sacrifice; and c)    The transaction or other event obligating the entity has already happened.

Life Settlements – a contract or agreement in which a policyholder agrees to sell or transfer ownership in all or part of a life insurance policy to a third party for compensation that is less than the expected death benefit of a policy.

Lifetime Disability Benefit – a provision in some disability income policies to recoup lost wages for the term of disability or remainder of insured’s life in case of permanent disability.

Limited Benefit – policies that provide coverage for vision, prescription drug, and/or any other single service plan or program. Also include short-term care policies that provide coverage for less than one year for medical and other services provided in a setting other than an acute care unit of the hospital.

Limited Payment Life Insurance – a form of whole-life insurance with a pre-defined number of premiums to be paid.

Limits – maximum value to be derived from a policy.

Line of Business– classification of business written by insurers.

Liquor Liability – coverage for the liability of an entity involved in the retail or wholesale sales of alcoholic beverages, or the serving of alcoholic beverages, to persons who have incurred bodily injury or property damage arising from an intoxicated person.

Living benefits rider – a rider attached to a life insurance policy providing long term care for the terminally ill.

Loan-backed Securities– pass-through certificates, collateralized mortgage obligations (CMOs), and other securitized loans not included in structured securities where payment of interest and/or principal is directly proportional to the interest and/or principal received by the issuer from the mortgage pool or other underlying securities.

Long Duration Contracts – contracts, excluding financial guaranty contracts, mortgage guaranty contracts and surety contracts, that fulfill both of the following conditions: (1) the contract term is greater than or equal to thirteen months and (2) the insurer can neither cancel nor increase the premium during the contract term.

Long-Term Care – policies that provide coverage for not less than one year for diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services provided in a setting other than an acute care unit of a hospital, including policies that provide benefits for cognitive impairment or loss of functional capacity. This includes policies providing only nursing home care, home health care, community based care, or any combination. The policy does not include coverage provided under comprehensive/major medical policies, Medicare Advantage, or for accelerated heath benefit-type products.

Long-Term Disability Income Insurance – policy providing monthly income payments for insureds who become disabled for an extensive length of time, typically two years or longer.

Loss – physical damage to property or bodily injury, Including loss of use or loss of income

Loss Payable Clause – coverage for third party mortgagee in case of default on insured property, secured by a loan, that has been lost or damaged.

Loss Ratio – the percentage of incurred losses to earned premiums.

Loss Reserve– the amount that insurers set aside to cover claims incurred but not yet paid.

Losses Incurred– Includes claims that have been paid and/or have amounts held in reserve for future payment

Losses Incurred But Not Reported (IBNR) – An estimated amount set aside by the insurance company to pay claims that may have occurred, but for some reason have not yet been reported to the insurance company.

M

Major Medical – a hospital/surgical/medical expense contract that provides comprehensive benefits as defined in the state in which the contract will be delivered.

Malpractice – alleged misconduct or negligence in a professional act resulting in loss or injury.

Managed Care– system of health care delivery that attempts to influence the utilization, quality, and cost of services provided.

Mandated benefits – insurance required by state or federal law.

Manufacturers Output Policies – provides broad form coverage of personal property of an insured manufacturer including raw material, goods in process, finished goods and goods shipped to customers.

Margin Premium – a deposit that an organization is required to maintain with a broker with respect to the Futures Contracts purchased or sold.

Market Value– fair value or the price that could be derived from current sale of an asset.

Mechanical Breakdown Insurance – premiums attributable to policies covering repair or replacement service, or indemnification for that service, for the operational or structural failure of property due to defects in materials or workmanship, or normal wear and tear. (May cover motor vehicles, mobile equipment, boats, appliances, electronics, residual structures, etc.)

Medicaid – policies issued in association with the Federal/State entitlement program created by Title XIX of the Social Security Act of 1965 that pays for medical assistance for certain individuals and families with low incomes and resources.

Medical & Hospital Expenses (Benefits or Claims)– total expenditures for health care services paid to or on behalf of members.

Medical Malpractice – insurance coverage protecting a licensed health care provider or health care facility against legal liability resulting from the death or injury of any person due to the insured’s misconduct, negligence, or incompetence, in rendering or failure to render professional services.

Medical Only– line of business that provides medical only benefits without hospital coverage. An example would be provider-sponsored organizations where there is no coverage for other than provider (non-hospital) services. Does not include self-insured business, FEHBP, Medicare and Medicaid programs, or dental only business.

Medical Professional Liability – insurance coverage protecting a licensed health care provider or health care facility against legal liability resulting from the death or injury of any person due to the insured’s misconduct, negligence, or incompetence in rendering professional services. Medical Professional Liability is also known as Medical Malpractice.

Medicare – a state assistance program, passed under Title XVIII of the Social Security Amendments of 1965, to provide hospital and medical expense insurance to those over 65 years of age.

Medicare + Choice – a major initiative in the Balanced Budget Act of 1997 (also called Medicare Part C), under which Medicare beneficiaries may select from among several managed care options or a Medicare system.

Medicare Advantage Plan – an HMO, PPO, or Private Fee-For Service Plan that contracts with Medicare Advantage Prescription Drug Plan also includes drug benefits. The plan may provide extra coverage such as vision, hearing, dental, and/or health and wellness programs. Medicare pays a fixed amount for insured’s care every month to the companies offering Medicare Advantage plans.

Medicare Cost– contract with Center for Medicare and Medicaid Services (CMS) for Medicare coverage. These contracts with CMS provide reimbursement through pre-determined monthly amount per member based on a total estimated budget. The beneficiary may use providers outside the provider network. Does not include stand alone Medicare Part D Plans.

Medicare Part D – Stand-Alone – stand-alone Part D coverage written through individual contracts; stand-alone Part D coverage written through group contracts and certificates; and Part D coverage written on employer groups where the reporting entity is responsible for reporting claims to the Centers for Medicare & Medicaid Services (CMS).

Medicare Supplement– Insurance coverage sold on an individual or group basis to help fill the “gaps” in the protections granted by the federal Medicare program. This is strictly supplemental coverage and cannot duplicate any benefits provided by Medicare. It is structured to pay part or all of Medicare’s deductibles and co-payments. It may also cover some services and expenses not covered by Medicare. Also known as Medigap” insurance.

Mobile Homes – Homeowners – homeowners insurance sold to owners occupying the described mobile home.

Member – A person who has enrolled as a subscriber or an eligible dependent of a subscriber and for whom the health organization has accepted the responsibility for the provision of health services as may be contracted for.

Morbidity – the frequency or severity of disease or illness within a subset of the population.

Morbidity Risk– the potential for a person to experience illness, injury, or other physical or psychological impairment, whether temporary or permanent. Morbidity risk excludes the potential for an individual’s death, but includes the potential for an illness or injury that results in death.

Mortgage – a note used to secure a loan for real property.

Mortgage Guaranty – insurance that indemnifies a lender for loss upon foreclosure if a borrower fails to meet required mortgage payments.

Mortgage Insurance – a form of life insurance coverage payable to a third party lender/mortgagee upon the death of the insured/mortgagor for loss of loan payments.

Mortgage-Backed Securities– a type of asset-backed security that is secured by a mortgage or collection of mortgages. These securities must also be grouped in one of the top two ratings as determined by an accredited credit rating agency, and usually pay periodic payments that are similar to coupon payments. Furthermore, the mortgage must have originated from a regulated and authorized financial institution.

Multi-Peril Insurance – personal and business property coverage combining several types of property insurance in one policy.

Municipal Bond Guarantee Insurance – coverage sold to municipalities to guarantee the principle payment on bonds issued.

Municipal Liability – liability coverage for the acts of a municipality.

Municipal obligation bond – any security, or other instrument, including a state lease but not a lease of any other governmental entity, under which a payment obligation is created, issued by or on behalf of a governmental unit to finance a project servicing a substantial public purpose, and 1) Payable from tax revenues, but not tax allocations, within the jurisdiction of such governmental unit; 2) Payable or guaranteed by the United States of America or any agency, department or instrumentality thereof, or by a state housing agency; 3) Payable from rates or charges (but not tolls) levied or collected in respect of a non-nuclear utility project, public transportation facility (other than an airport facility) or public higher education facility; or 4) With respect to lease obligations, payable from future appropriations.

Mutual Insurance Company – a privately held insurer owned by its policyholders, operated as a non-profit that may or may not be incorporated.

Mutual Insurance Holding Company – a company organized as a mutual and owning a capital stock insurer or insurers for the benefit of pooling risk for many people, typically those in the same industry.

 

N

Named Insured – the individual defined as the insured in the policy contract. .

Named Peril Coverage – insurance for losses explicitly defined in the policy contract.

National Association of Insurance Commissioners (NAIC)– the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.

Negligence – failure to exercise reasonable consideration resulting in loss or damage to oneself or others.

Net Premiums Earned– premiums on property/casualty or health policies that will not have to be returned to the policyholder if the policy is cancelled.

NFIP – National Flood Insurance Program – flood insurance and floodplain management for personal and business property administered under the National Flood Act of 1968. Encourages participation by private insurers through a flood insurance pool .

Nuclear Energy Liability – coverage for bodily injury and property damage liability resulting from the nuclear energy material (whether or not radioactive) on the insured business’s premises or in transit.

O

Occurrence – an accident , including injurious exposure to conditions, which results, during the policy period in bodily injury or property damage neither expected or intended from the standpoint of the insured. (Bickelhaupt and Magee)

Ocean Marine – coverage for ocean and inland water transportation exposures; goods or cargoes; ships or hulls; earnings; and liability.

Option – an agreement giving the buyer the right to buy or receive, sell or deliver, enter into, extend or terminate, or effect a cash settlement based on the actual or expected price, level, performance or value of one or more Underlying Interests.

Owner Occupied – homeowners insurance sold to owners occupying the described property.

P

Package Policy – two or more distinct policies combined into a single contract.

Peril – the cause of property damage or personal injury, origin of desire for insurance. “Cause of Loss”

Permanent Life Insurance – policy that remains active for the life of the insured.

Personal Auto Policy – coverage designed to insure private passenger automobiles and certain types of trucks owned by an individual or husband and wife.

Personal Earthquake – earthquake property coverage for personal, family or household purposes.

Personal Flood – separate flood insurance policy sold for personal, family or household purposes.

Personal GAP Insurance – credit insurance that insures the excess of the outstanding indebtedness over the primary property insurance benefits in the event of a total loss to a collateral asset.

Personal Injury Liability – liability coverage for those who have been discriminated against, falsely arrested, illegally detained, libeled, maliciously prosecuted, slandered, suffered from identity theft, mental anguish or alienation of affections, or have had their right of privacy violated.

Personal Injury Protection Coverage/PIP – automobile coverage available in states that have enacted no-fault laws or other auto reparation reform laws for treatment of injuries to the insured and passengers of the insured.

Personal Property – single interest or dual interest credit insurance (where collateral is not a motor vehicle, mobile home, or real estate) that covers perils to goods purchased or used as collateral and that concerns a creditor’s interest in the purchased goods or pledged collateral either in whole or in part; or covers perils to goods purchased in connection with an open-end credit transaction.

Pet Insurance Plans – veterinary care plan insurance policy providing care for a pet animal (e.g., dog or cat) of the insured owner in the event of its illness or accident.

Policy – a written contract ratifying the legality of an insurance agreement.

Policy Period – time period during which insurance coverage is in effect.

Policy Reserve – the amount of money allocated specifically for the fulfillment of policy obligations by a life insurance company; reserves are in place to safeguard that the company is able to pay all future claims.

Preferred Provider Organization (PPO)– arrangement, insured or uninsured, where contracts are established by Health Plan Companies (typically, commercial insurers, and, in some circumstances, by self-insured employers) with health care providers. The Health Plans involved will often designate these contracted providers as “preferred” and will provide an incentive, usually in the form of lower deductibles or co-payments, to encourage covered individuals to use these providers. Members are allowed benefits for non-participating provider services on an indemnity basis with significant copayments and providers are often, but not always, paid on a discounted fee for service basis.

Preferred Risk – insured, or applicant for insurance, who presents likelihood of risk lower than that of the standard applicant.

Premises and Operations – policies covering the liability of an insured to persons who have incurred bodily injury or property damage on an insured’s premises during normal operations or routine maintenance, or from an insured’s business operations either on or off of the insured’s premises.

Premium – Money charged for the insurance coverage reflecting expectation of loss.

Premiums Earned– the portion of premium for which the policy protection or coverage has already been given during the now-expired portion of the policy term.

Premiums Written– total premiums generated from all policies (contracts) written by an insurer within a given period of time.

Primary Insurance – coverage that takes precedence when more than one policy covers the same loss.

Private Passenger Auto (PPA) – filings that include singularly or in any combination coverage such as the following: Auto Liability, Personal Injury Protection (PIP), Medical Payments (MP), Uninsured/Underinsured (UM/UIM); Specified Causes of Loss, Comprehensive, and Collision.

Product Liability – insurance coverage protecting the manufacturer, distributor, seller, or lessor of a product against legal liability resulting from a defective condition causing personal injury, or damage, to any individual or entity, associated with the use of the product.

Professional Errors and Omissions Liability – coverage available to pay for liability arising out of the performance of professional or business related duties, with coverage being tailored to the needs of the specific profession. Examples include abstracters, accountants, insurance adjusters, architects, engineers, insurance agents and brokers, lawyers, real estate agents, stockbrokers.

Property – coverage protecting the insured against loss or damage to real or personal property from a variety of perils, including but not limited to fire, lightening, business interruption, loss of rents, glass breakage, tornado, windstorm, hail, water damage, explosion, riot, civil commotion, rain, or damage from aircraft or vehicles.

Protection and Indemnity (P&I) Insurance – a broad form of marine legal liability insurance coverage.

Provisions – contingencies outlined in an insurance policy.

Proximate Cause – event covered under insured’s policy agreement.

Pure Risk – circumstance including possibility of loss or no loss but no possibility of gain.

R

Rate – value of insured losses expressed as a cost per unit of insurance.

Rebate – a refund of part or all of a premium payment.

Renewable Term Insurance – insurance that is renewable for a limited number of successive terms by the policyholder and is not contingent upon medical examination.

Renters Insurance – liability coverage for contents within a renter’s residence. Coverage does not include the structure but does include any affixed items provided or changed by the renter.

Replacement Cost – the cost of replacing property without a reduction for depreciation due to normal wear and tear.

Reported Losses– Includes both expected payments for losses relating to insured events that have occurred and have been reported to the insurance company, but not yet paid.

Reserve – A portion of the premium retained to pay future claims

Reserve Credit– reduction of reserve amounts for reinsurance ceded. Reductions may include the claim reserve and/or the unearned premium reserve.

Residence – the domicile location of a member as shown by his or her determination as a resident.

Retention – a mechanism of internal fund allocation for loss exposure used in place of or as a supplement to risk transfer to an insurance company.

Rider – an amendment to a policy agreement.

Risk – Uncertainty concerning the possibility of loss by a peril for which insurance is pursued.

S

Salvage – value recoverable after a loss.

Security – a share, participation, or other interest in property or in an enterprise of the issuer or an obligation of the issuer.

Self-Insurance – type of insurance often used for high frequency low severity risks where risk is not transferred to an insurance company but retained and accounted for internally.

Short-term Disability – a company standard defining a period of time employees are eligible for short-term disability coverage, typically for 2 years or less.

Short-Term Medical – policies that provide major medical coverage for a short period of time, typically 30 to 180 days. These policies may be renewable for multiple periods.

Social Insurance – compulsory insurance plan administered by a federal or state government agency with the primary emphasis on social adequacy.

Special revenue bond – any security, or other instrument under which a payment obligation is created, issued by or on behalf of a governmental unit to finance a project serving a substantial public purpose and not payable from the sources in connection with the payment of municipal obligation bonds.

Specified Disease Coverage– coverage that provides primarily pre-determined benefits for expenses of the care of cancer and/or other specified diseases.

Specified/Named Disease – policies that provide benefits only for the diagnosis and/or treatment of a specifically named disease or diseases. Benefits can be paid as expense incurred, per diem or as a principal sum.

Stock Insurance Company – business owned by stockholders.

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.

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.

T

Tenants – homeowners insurance sold to tenants occupying the described property.

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.

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.

U

Umbrella and Excess (Commercial) – coverage for the liability of a commercial venture above a specific amount set forth in a basic policy issued by the primary insurer; or a self-insurer for losses over a stated amount; or an insured or self-insurer for known or unknown gaps in basic coverages or self-insured retentions.

Umbrella and Excess (Personal) – non-business liability protection for individuals above a specific amount set forth in a basic policy issued by the primary insurer; or a self-insurer for losses over a stated amount; or an insured or self-insurer for known or unknown gaps in basic coverages or self-insured retentions.

Underinsured Motorist Coverage – policy option for bodily injury or property losses caused by a motorist with coverage insufficient to cover total dollar amount of losses. Compensation for the injured party is equal to the difference between the losses incurred and the liability covered by the motorist at fault.

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.

Universal Life Insurance – adjustable life insurance under which premiums and coverage are adjustable, company expenses are not specifically disclosed to the insured but a financial report is provided to policyholder’s annually.

Unpaid Losses– claims that are in the course of settlement. The term may also include claims that have been incurred but not reported.

V

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.

Vision – limited benefit expense policies. Provides benefits for eye care and eye care accessories. Generally provides a stated dollar amount per annual eye examination. Benefits often include a stated dollar amount for glasses and contacts. May include surgical benefits for injury or sickness associated with the eye.

W

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.

Whole Life Insurance – life insurance that may be kept in force for the duration of a person’s life and pays a benefit upon the person’s death. Premiums are made for same time period.

Workers’ Compensation – insurance that covers an employer’s liability for injuries, disability or death to persons in their employment, without regard to fault, as prescribed by state or federal workers’ compensation laws and other statutes.

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