Glossary Terms

first layer property or liability coverage carried by the insured that provides benefits up to the limits of a policy, regardless of other insurance policies in effect.

the RBC Report including risked based capital instruction adopted by the NAIC, as such RBC Instructions may be amended by the NAIC from time to time in accordance with procedures adopted by the NAIC.

measurement of the amount of capital (assets minus liabilities) an insurance company has as a basis of support for the degree of risk associated with it s company operations and investments. This ratio identifies the companies that are inadequately capitalized by dividing the company’s by the minimum amount of capital that the regulatory authorities feel [...]

ratio of authorized control level risked based capital of an insurance company to its total adjusted capital. This statistic determines regulatory action taken by the state’s insurance commissioner

form of insurance that insurance companies buy for their own protection, “a sharing of insurance.” An insurer (the reinsured) reduces its possible maximum loss on either an individual risk or a large number of risks by giving (ceding) a portion of liability to another insurance company (reinsurer).

insurance company that assumes all or part of an Insurance or Reinsurance policy written by a primary insurance company.

The cost of replacing property without a reduction for depreciation. By this method of determining value, damages for a claim would be the amount needed to replace the property using new materials.

Consists of insurance consumers unable to obtain coverage in the voluntary market.

A specified maximum amount of insurance that a life insurer is willing to carry at its own risk on any one life without transferring some of the risk to a reinsurer.

uncertainty of a financial loss; term used to designate an insured or a peril insured against.