Introductory Insurance Accounting Flashcards Preview

Course 2 Vocab > Introductory Insurance Accounting > Flashcards

Flashcards in Introductory Insurance Accounting Deck (22):
1

Statutory accounting principles (SAP)

The accounting principles and practices that are prescribed or permit- ted by an insurer’s domiciliary state and that insurers must follow.

2

Mark-to-model

The valuation of an asset based on financial models instead of market price.

3

Mark-to-market

The value of an asset or liability based on its current market price.

4

Deferral-matching

An accounting approach in which the focus is to coordinate the timing of income and expense recognition so that both occur when the triggering event that is the focus of the contract occurs.

5

Accounts receivable

A current asset representing monies owed to a business by customers for goods or services rendered.

6

Reinsurance recoverables

Amounts for losses and loss adjustment expenses owed to an insurer under reinsurance agreements covering paid losses.

7

Deferred acquisition costs

The recognition of the cost of acquiring a new customer over the duration of an insurance contract.

8

Reserve

The amount the insurer estimates and sets aside to pay on an existing claim that has not been settled.

9

Generally accepted accounting principles (GAAP)

A common set of accounting standards and procedures used in the preparation of financial statements to ensure consistency of presenta- tion and reported results.

10

Unearned premium

The portion of policy premium for the unexpired portion of the policy.

11

Asset-liability

An accounting approach that focuses on the value of assets or liabili- ties that exist as of the balance sheet date.

12

Case reserve

A loss reserve assigned to an individual claim.

13

Earned premiums

The portion of written premiums that corresponds to coverage that has already been provided.

14

Written premiums

The total premium on all policies written (put into effect) during a particular period.

15

Deposit premium

The amount a policyholder pays at the beginning of a policy period, pending the determination of the actual premium owed.

16

Reinstatement premium

A premium that applies to reinsurance contracts or primary policies to reinstate the original policy limit after it has been exhausted by the covered event in order to cover another possible event under the reinsurance or primary policy.

17

Incurred losses

The losses that have occurred during a specific period, no matter when claims resulting from the losses are paid.

18

Prospective reinsurance

Reinsurance purchased to cede future losses.

19

Loss portfolio transfer

A type of retroactive plan that applies to an entire portfolio of losses.

20

Retrocession

A reinsurance agreement whereby one reinsurer (the retrocedent) transfers all or part of the reinsurance risk it has assumed or will assume to another reinsurer (the retrocessionaire).

21

Retrocessionaire

The reinsurer that assumes all or part of the reinsurance risk accepted by another reinsurer.

22

Bordereau

A report the primary insurer provides periodically to the reinsurer that contains a history of all loss exposures reinsured under the treaty.