Insurance Information
Immediate Annuity
An annuity that commences benefit payments immediately after a specified interval (one month or one year). This type of annuity is nearly always purchased with a single premium.

Imputed Negligence
Case in which responsibility for damage can be transferred from the negligent party to another person, such as an employer.

Incurred Claims
Incurred claims equal the claims paid during the policy year plus the claim reserves as of the end of the policy year, minus the corresponding reserves as of the beginning of the policy year. The difference between the year end and beginning of the year claim reserves is called the increase in reserves and may be added directly to the paid claims to produce the incurred claims.

Indemnification
Compensation to the victim of a loss, in whole or in part, by payment, repair, or replacement.

Indemnity
Legal principle that specifies an insured should not collect more than the actual cash value of a loss but should be restored to approximately the same financial position as existed before the loss.

Independent Adjuster
Claims adjuster who offers his or her services to insurance companies and is compensated by a fee.

Independent Agent
An independent contractor who sells insurance usually on behalf of more than one insurance company under the independent agency system. Independent agents operate their own business, own the records of the policies sold through them, and are compensated by commissions or fee.

Indirect Loss
Property loss from a peril that is not the immediate cause of loss; an indirect loss (e.g. a business interruption loss, extra expense, lost rent, etc.) arising out of an insured's inability to use property damaged by another peril.

Inheritance tax
A tax based on an estate's value at the time of the owner's death. A federal unified tax is assessed on the combined value of the estate and qualifying gifts so that estate taxes cannot be avoided by gifts in anticipation of death.

Insolvent
Having insufficient financial resources (assets) to meet financial obligations (liabilities).

Inspection
In property and casualty insurance, the insurer retains the right to make inspections and surveys relating to the insurability of the risk and the premiums charged. The insurer also reserves the right for inspection of property for which a loss arises and claim presented.

Installments
When a policy is placed on a payment plan, multiple equal installments due in the future are created.

Insurability
The risk-associated qualities of a person or entity that meet an insurer's underwriting standards and therefore make the insurer willing to offer coverage at a standard premium.

Insurable Interest
The person who stands to lose financially in the event of a loss. For example, loss to an automobile, home, or contents.

Insurable Risk
A risk that meets the following criteria:
1. The insured loss must have a definite time and place;
2. The insured event must be accidental;
3. The insured must have an insurable interest in the subject of coverage;
4. The insured risks must belong to a sufficiently large group of homogeneous exposure units to make losses predictable;
5. The risk must not be subject to a catastrophic loss where a large number of exposure units can be damaged or destroyed in a single event;
6. The coverage must be provided at a reasonable cost;
7. The chance of loss must be calculable.

Insurance
A system under which individuals, businesses, and other organizations or entities, in exchange for payment of a sum of money (a premium), are guaranteed compensation for losses resulting from certain perils under specified conditions.

Insurance Adjuster
An insurance company employee who is responsible for settling or adjusting claims.

Insurance Commissioner
The senior official in a state's department of insurance or other insurance regulatory agency.

Insurance Company
An organization chartered to operate as an insurer.

Insurance Examiner
The insurance department representative assigned to audit the books or the market conduct of an insurance company.

Insurance Exchange
An insurance marketplace or organization patterned after Lloyd's of London, formed during the 1980s in New York City, Miami, Florida, and Chicago, Illinois. Exchanges were formed to write large or unique risks, generally on a surplus lines basis, and to write reinsurance business. Both the New York and Florida exchanges have suspended operations.

Insurance Guaranty Funds
Plans established and administered individually at the state level which assess solvent insurers in order to settle the unpaid claims of a insolvent company and to return unearned premiums to its policyholders. Insurers each pay a proportional share of the losses based on their premium volume in the state. Frequently funds are set up in such a way as to have immediate access to assets of the insolvent insurer (rather than waiting until liquidation proceedings are completed). In many states, funds are given priority before general creditors to obtain assets of insolvent insurers. In some states, solvent insurers are permitted tax offsets against money paid into guarantee funds.

Insurance Services Offices
Members: Rating bureaus, actuarial associations and other insurance research groups. Objectives: Provides statistical and actuarial information, policy forms and related services to insurers. Functions as an insurance advisory organization and statistical agent. Publishes rate manuals, plans, policy forms and endorsements and other materials.

Insured
The person whose insurable interest is protected under an insurance policy; the one to whom or at whose direction an insurer reimburses losses, pays benefits, or provides services. The term is generally preferred to policyholder.

Insured Loss Ratio
The ratio that a reinsurer's percentage of losses incurred bears to premiums earned.

Insured Vehicle
A vehicle which is covered by an insurance policy or any vehicle which meets the definition of a covered auto according to the language of the insurance policy.

Insurer
The party to the insurance contract who promises to pay losses or benefits. Also, any corporation engaged primarily in the business of furnishing insurance to the public.

Insuring Agreement
That part of an insurance contract that states the promises of the insurer.

Insuring Clause
The clause which sets forth the type of loss being covered by the policy and the parties to the insurance contract.

Interest
The price for the use of money, expressed as a percentage of the amount borrowed; the charge paid by a borrower to a lender

Inter vivos Trust
An ordinary trust established by a person while living to manage and distribute assets to other living persons. (Inter vivos is Latin for "between the living.")

Intestate
Dying without having made a legal will; a person who has died without leaving a will

Investment Income
An insurance company's earnings from its investment portfolio, including interest, dividends, capital gains, and rent.

Insurance Information (cont'd)
Occupational Hazards
Occupations which expose the insured to greater than normal physical danger by the very nature of the work in which the insured is engaged, and the varying periods of absence from the occupation, due to the disability, that can be expected.

Occurrence
An accident, including continuous or repeated exposure to substantially the same general, harmful conditions, that results in bodily injury or property damage during the period of an insurance policy.

Occurrence policy
A liability insurance policy that covers claims arising out of occurrences that take place during the policy period, regardless of when the claim is filed.

Ocean Marine Insurance
Insurance for sea-going vessels, including liabilities connected with them, and their cargoes.

Ocean Marine Insurance
Coverage on all types of vessels, including liabilities connected with them, and on their cargoes.

Operating Ratio
The sum of expenses and losses expressed as a percent of earned premium.

Optionally Renewable Contract
A contract of health insurance in which the insurer reserves the right to terminate the coverage at any anniversary or, in some cases, at any premium due date, but does not have the right to terminate coverage between such dates.

Ordinary Life
Synonymous With Whole Life and Straight Life - The three terms are applied to the type of policy which continues during the whole of the insured's life and provides for the payment of amount insured at this death.

Ordinary Life Insurance
Life insurance usually issued in amounts of $1,000 or more with premiums payable on an annual, semi-annual, quarterly or monthly basis.

Over-the Counter Market
A means of buying and selling securities that are not listed on a stock exchange. Negotiations are carried out by telephone or computer network.

Overhead Expense Insurance
A special form of health insurance designed to help offset overhead expenses such as office rent, utilities, employees' wages, and auditors' fees, incurred during total disability. The monthly payments during disability is not a fixed amount of indemnity as on regular disability polices, but the amount of overhead expense actually incurred, or a percentage thereof, up to the limit specified in the policy.

Overhead Insurance
A type of short-term disability income contract that reimburses the insured person for specified, fixed monthly expenses, normal and customary in the operation and conduct of his/her business or office.

Overriding Commission (Overwrite)
A commission paid to general agents or agency managers in addition to the commission paid the soliciting agent or broker.