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Funds held by the company to help fulfill future claims. Minimum reserves are usually set by the state Department of Insurance


Multi-line insurer

A multi-line insurer is an insurance company or independent agent that provides a one-stop shop for businesses or individuals seeking coverage for all their insurance needs. For example, many large insurers offer individual policies for automobile, homeowner, long-term care, life and health insurance needs.


Stock Companies

For the purpose of insurance, Stock Companies are insurance companies owned and controlled by a group of stockholders whose investment in the company provides a safety margin necessary in issuance of guaranteed, fixed premium, nonparticipating policies.


Nonparticipating Plan

A Nonparticipating plan is Insurance under which the insured is not entitled to share in the divisible surplus of the company.


Mutual Companies

For the purpose of insurance, mutual companies are insurance companies characterized by having no capital stock; it is owned by its policy owners and usually issues participating insurance.


Participating Plan

A Participating Plan of insurance is a plan under which the policy owner receives shares (commonly called dividends) of the divisible surplus of the company.



A Reinsurer is a company that provides financial protection to insurance companies. Reinsurers handle risks that are too large for insurance companies to handle on their own and make it possible for insurers to obtain more business than they would otherwise be able to.


Fraternal Benefit Societies

Fraternal Benefit Societies are nonprofit benevolent organization that provides insurance to its members. Producers or agents who only sell within their society, do not receive commission, and stay under a specific premium threshold often have less stringent licensing requirements.


Fair Credit Reporting Act

The Fair Credit Reporting Act is a federal law requiring an individual to be informed if she is being investigated by an inspection company. The law also outlines the sharing and impact of such information and requires individuals to be notified prior to being investigated.


Buyer's Guide

A Buyer's Guide is an informational consumer guide books that explain insurance policies and insurance concepts; in many states, they are required to be given to applicants when certain types of coverages are being considered. Buyer's Guides are often used with life insurance, long-term care insurance, and annuities.


Policy Summary

A Policy Summary is the summary of the terms of an insurance policy, including the conditions, coverage limitations, and premiums. Policy summaries are often used with life insurance, long-term care insurance, and annuities.


National Association of Insurance Commissioners (NAIC)

The National Association of Insurance Commissioners (NAIC) is an association of all of the state insurance commissioners active in insurance regulatory problems and in the forming and recommending model legislation and requirements. The NAIC does not directly MAKE laws, as laws are made a the state level. They do work on suggesting standards for states to adopt with the goal of a standardizing the insurance industry throughout the United States of America.


State Guaranty Association

The State Guaranty Association is established by each state to support insurers and protect consumers in the case of insurer insolvency, guaranty associations are funded by insurers through assessments. All authorized insurers are legally required to participate in the State Guaranty Association for any state they are authorized to do business in regardless of where their corporate office is.


Life Insurance

Life Insurance against loss due to to the death of a particular person (the insured) upon whose death the insurance company agrees to pay a stated sum or income to the beneficiary. In it's purest form, life insurance states, "we will pay this amount when this person dies."


Term Life Insurance

Term Life Insurance is protection for a set number of years; expiring without value if the insured survives the state period, which may be one or more years. Term Life is designed to provide a temporary protection in case a person dies during a set period of time.


Whole Life

Whole Life is permanent level insurance protection for a person's "whole of life," from policy issue to the death of the insured. Characterized by level premiums, level benefits, and cash values.


Group Life

Group Life is a type of life insurance in which a single contract covers an entire group of people. Most often, the group is an employer-employee group. Those covered under a group life policy may or may not pay a portion of the premium and can usually choose their beneficiary. However, the insured typically does NOT own the policy, the group (employer) owns and controls the policy.



Consideration is the part of an insurance contract setting forth the amount of initial and renewal premiums and frequency of future payments. Consideration is often said to include the initial premium and completed application for insurance. In other words, the applicant is saying, "please CONSIDER me for insurance, here is my initial premium, my completed application, and how much/how often I agree to pay in the future. Please CONSIDER me."


The Insuring Agreement (Insuring Clause, Insurance Provision)

The Insuring Agreement (Insuring Clause, Insurance Provision) is the portion of the insurance policy in which the insurer promises to make payment to or on behalf of the insured. It states the scope and limits of coverage. The insuring agreement is usually contained in a coverage form from which a policy is constructed. In other words, it is the insurance company saying, "We ensure to INSURE you under these conditions for this amount."


Health Insurance

Health Insurance is a general way of describing insurance against loss through sickness or accidental bodily injury. It is also called accident and health, accident and sickness, sickness and accident, or disability insurance. It is important to remember the general term "health insurance" applies to many different types of insurance, not just the medical insurance that pays for doctor and hospital visits.


Disability (income) Insurance

Disability (income) insurance is a form of insurance that insures the beneficiary's earned income against the risk that a disability creates a barrier for a worker to complete the core functions of their work. Although disability insurance is designed to protect one's income, there are typically rules and regulations in place limiting the benefits of a disability policy to one's income level, and typically only allowing protection for a portion of their income.


Medical Expense

Medical Expense insurance pays benefits for nonsurgical doctors' fees commonly rendered in a hospital; sometimes pays for home and office calls.


Entire Contract

Entire Contract is an insurance policy provision stating that the application and policy contain all provisions and constitute the entire contract.


Notice of Claim

Notice of Claim is a policy provision that describes the policy owner's obligation to provide notification of loss to the insurer within a reasonable period of time. Notice of claim only requires the insurance company be NOTIFIED of a loss, it does not require that proof of the loss is provided.



Reinstatement is the act of putting a lapsed policy back in force by producing satisfactory evidence of insurability and paying any past-due premiums required. Most states have reinstatement laws requiring an insurer to allow for a policy to be reinstated upon request of the policy owner within a specified period of time.


Property Insurance

Property Insurance is an insurance policy that provides financial reimbursement to the owner or renter of a structure and its contents, in the event of damage or theft. Simply put, Property Insurance protects the things you own and rent.


Casualty (Liability) Insurance

Casualty (liability) Insurance is insurance which broadly encompasses insurance not directly concerned with life insurance, health insurance, or property insurance. Casualty insurance includes vehicle insurance, liability insurance, theft insurance, workers' compensation insurance, and elevator insurance. Casualty insurance protects you financially in the even that someone sues you.


Property and Casualty Insurance

Property and Casualty Insurance are often referred to collectively as property and casualty insurance because the things you own have the potential to harm people in ways that could cause them to sue you. The main kinds of property and casualty insurance include auto insurance, home-owner's insurance, renter's insurance and umbrella insurance.


Proof of Loss

Proof of Loss is a mandatory health insurance provision stating that the insured must provide a completed claim form to the insurer within days of the date of loss. If the insured wants paid, they must PROVE the loss occurred.



The Deductible is the amount of expense or loss to be paid by the insured before an insurance policy starts paying benefits. Deductible typically apply to property, casualty, and health insurance.