AAI:
See Alliance of American Insurers:

AAIS:
See American Association of Insurance Services:

AB:
Aid to the Blind: See Public Assistance:

AFDC:
Aid to Families with Dependent Children: See Public Assistance:

AIA:
See American Insurance Association:

APTD:
Aid to the Permanently and Totally Disabled: See Public Assistance:

ARIA:
See American Risk and Insurance Association:

ARM:
See Associate in Risk Management:

"A" (or Judgment) Rates:
Rates that are not backed up by loss experience statistics: They are based on the judgment of the underwriter on an individual risk basis:

Absolute Assignment:
Assignment by a policy owner of all control of and rights in the policy to a third party:

Accident:
An unplanned event, unexpected and undersigned, which occurs suddenly and at a definite place: See also Occurrence:

Accident Frequency:
The rate of the occurrence of accidents, often expressed in terms of the number of accidents over a period of time: It is one method used for measuring the effectiveness of loss prevention services: Contrast with Accident Severity:

Accident Prevention:
See Loss Prevention Service:

Accident Severity:
A measure of the severity or seriousness of losses, rather than the number of losses: It is measured in terms of time lost from work rather than the number of individual accidents: It is another way of measuring the effectiveness of loss prevention services: Contrast with Accident Frequency:

Accident Year Experience:
Measures premiums and losses relating to accidents which occurred during a 12-month period:

Accidental Bodily Injury:
An injury sustained accidentally: Only the result need be accidental: Contrast with Accidental Means:

Accidental Means:
Unexpected or undesigned cause of an accidental bodily injury: Under a definition of accidental means, the mishap itself must be accidental, not just the resulting injury: An example would be an individual chopping wood: If the axe slipped out of his hand and cut his foot, it would have been accidental means: However, if his finger got in the way of the axe, it would not have been:

Accommodation Line:
Business accepted from an agent or broker which would normally be rejected according to strict underwriting standards but which is accepted because of the overall profitability of the agent's or customer's other business: As an example, an insurer might accept coverage on property that would not normally meet its underwriting standards, if the other lines of insurance which it carries for the customer were profitable:

Account Current:
A monthly financial statement provided to an agent by an insurer showing premiums written, cancellations, endorsements, and commissions:

Accumulated Earnings Tax:
A tax penalty which is imposed on corporate earnings which are retained by the corporation for non-business related needs:

Acquisition Cost:
The expenses incurred by an insurer or reinsurance company that are directly related to putting the business on the books of the company: The largest portion of this cost is usually the agent's or sales representative's commission or bonus:

Act of God:
An event arising out of natural causes with no human intervention which could not have been prevented by reasonable care or foresight: Examples are floods, lightning, and earthquakes:

Actual Cash Value:
An amount equivalent to the replacement cost of lost or damaged property at the time of the loss, less depreciation: With regard to buildings, there is a tendency for the actual cash value to closely parallel the market value of the property: See also Market Value:

Actuarial:
Having to do with insurance mathematics:

Actuary:
A specialist trained in mathematics, statistics, and accounting who is responsible for rate, reserve, and dividend calculations and other statistical studies:

Additional Insured:
A person other than the named insured who is protected under the terms of the contract: Usually, additional insureds are added by endorsement or referred to in the wording of the definition of "insured" in the policy itself:

Adhesion:
This is a characteristic of a unilateral contract which is offered on a "take it or leave it" basis: Most insurance policies are contracts of "adhesion," because the terms are drawn up by the insurer and the insured simply "adheres:" For this reason ambiguous provisions are often interpreted by courts in favor of the insured: Contrast with Manuscript Policy:

Adjuster:
A representative of the insurer who seeks to determine the extent of the firm's liability for loss when a claim is submitted: Same as Claim Representative:

Adjustment Bureau:
A firm organized to provide adjustment services to insurers not wishing to create their own claims division:

Admitted (or Allowed) Assets:
Assets whose values are permitted by state law to be included in the annual statement of the insurer:

Admitted Company:
An insurance company authorized and licensed to do business in a given state:

Advance Payment:
Premiums paid in advance of the current policy period, including the amount tendered with an application by an applicant for Life Insurance:

Advance Premium:
See Deposit Premium:

Adverse Selection:
The tendency of poorer than average risks to buy and maintain insurance: Adverse selection occurs when insureds select only those coverages that are most likely to have losses:

Adverse Underwriting Decision:
Any decision involving individually underwriting insurance coverages resulting in termination of existing insurance, declination of an application, or writing the coverage only at higher rates: For property and casualty insurance, it also includes placing the coverage with a residual market mechanism or an unauthorized insurer:

Age Limits:
The ages below which or above which an insurer will not write certain forms of insurance or above which it will not continue a policy presently in force:

Agency:
An insurance sales office which is directed by a agent, manager, independent agent, or company manager:

Agency Company:
An insurance company that produces business through an agency network: Contrast with Direct Writer:

Agency Contract (or Agreement) :
The document which establishes the legal relationship between an agent and an insurer:

Agency Plant:
The total force of agents representing an insurer:

Agent:
One who solicits, negotiates or effects contracts of insurance on behalf of an insurer: His right to exercise various functions, his authority, and his obligations and the obligations of the insurer to the agent are subject to the terms of the agency contract with the insurer, to statutory law, and to common law::

Agent, Policywriting:
See Policywriting Agent::

Agent's Appointment:
Official authorization from an insurance company granting an agent the authority to act as its agent: In most states, agents must be appointed by at least one insurer in addition to being licensed by the state:

Agent's Authority:
The authority and power granted to an agent by the agency contract: The agent is also clothed with additional power under the legal concept of apparent agency: See also Apparent Agency:

Agent's Balance:
A periodic statement of the sums due and owed to an agent under the agent's contract with an insurer:

Agent's Commission:
The method by which an agent is compensated for placing insurance with a company that he represents: The commission is usually a percentage of the premium for the policy: See also Commission:

Agent's License:
A certificate of authority from the state which permits the agent to conduct business:

Agent's Qualification Laws
Education, experience, and other requirements imposed by the state upon persons desiring to be licensed as agents:
Aggregate Limit:
Usually refers to Liability Insurance and indicates the amount of coverage that the insured has under the contract for a specific period of time, usually the contract period, no matter how many separate accidents may occur:

Aleatory Contract:
A contract in which the number of dollars to be given up by each party is not equal: Insurance contracts are of this type, as the policyholder pays a premium and may collect nothing from the insurer or may collect a great deal more than the amount of the premium if a loss occurs:

Alien Insurer:
An insurer formed under the laws of a country other than the United States: A U:S: company selling in other countries is also an alien insurer:

Alienated:
In insurance, this term describes property that an insured no longer owns or holds title to: Generally a Public Liability policy will cover the insured's liability for premises alienated by him:

Alliance of American Insurers (AAI):
An association of insurance companies working together in the following areas of common interest: (1) Government affairs affecting insurance; (2) Education of the employees of member companies; (3) Loss prevention, and (4) Other insurance activities:

All-Risks Insurance:
The term "All-Risks Insurance" is used to mean insurance against loss of or damage to property arising from any fortuitous cause except those that are specifically excluded: An insurance contract which provides All-Risks Insurance is an All-Risks policy: Contrast with Named Perils: +++++

Ambiguity:
Terms or words in an insurance policy which make the meaning unclear or which can be interpreted in more than one way: The rule of law is that any ambiguity in the policy is construed against the insurer and in favor of the insured: This is because the contract is one of adhesion; that is, the insured must adhere to what the insurer has written: If the insurance does not make its contract clear, it is responsible:

Amendment:
A formal document which corrects or revises an insurance master policy: See also Endorsement and Rider:

American Academy of Actuaries:
A society concerned with the development of education in the field of actuarial science and with the enhancement of standards in the actuarial field: Members may use the designation MAAA (Member, American Academy of Actuaries):

American Agency System:
See Independent Agency System:

American Association of Insurance Services (AAIS):
An association of insurance companies performing various technical functions for its member and subscribers: AAIS is licensed to operate in all states, the District of Columbia, and the Commonwealth of Puerto Rico: AAIS offers program services, files rates, rules and forms on behalf of member and subscriber companies, acts as an official statistical agent, and offers a variety of professional services for its member companies:

American Institute for Property and Liability Underwriters, Inc:
An insurance educational organization which establishes insurance standards and fosters educational work: Properly qualified individuals who pass a series of examinations given by this body receive the designation Chartered Property and Casualty Underwriter (CPCU):

American Insurance Association (AIA):
The informational, educational, technical and legislative organization of the capital stock insurance companies in the Property and Liability fields::

American Risk and Insurance Association:
An association of insurance educators and others interested in insurance study and research:

Amortized Value:
The value of bonds purchased by an insurance company which are eligible for amortization: For example, if a 10-year bond were purchased at $50 more than its face value, that $50 would be "amortized" or spread over the 10-year period: Each year the bonds would be valued at $5 less than the year before:

Annual Statement:
A report to the state insurance department of the year's financial results: The insurer's income and expenses are stated in detail as well as its assets and liabilities:

Anti-Coercion Law:
A provision usually contained in a section of the state code entitled "Unfair Trade Practices" or a similar name, declaring the use of coercion to be an unfair practice and, hence, a violation of the state law:

App:
A trade expression for the insurance application: See Application:

Apparent Authority:
Authority of an agent that is created when the agent oversteps actual authority, and when inaction by the insurer does nothing to counter the public impression that such authority exists:

Application:
A form on which the prospective insured states facts requested by the insurer on the basis of which, together with information from other sources, the insurer decides whether to accept the risk, modify the coverage offered, or decline the risk: See App:

Apportionment:
The method of dividing a loss among insurers in the same proportions as their participation when two of more companies cover the same loss:

Appraisal:
An evaluation of property made to ascertain either the appropriate amount of insurance to be written or the amount of loss to be paid:

Approved:
The condition which exists when the person or object to be insured meets the underwriting standards of the insurer:

Approved Roof:
A term used in building construction: It indicates a roof made of fire-resistive materials, such as tile or asphalt shingles:

Assessed Value:
The value of real estate or personal property as determined by a governmental unit, such as a city, for the purpose of determining taxes:

Assessment Company, Society or Insurer:
An insurer who retains the right to assess policyholders additional amounts if premiums are insufficient for operations: In some cases, an assessment insurer may not charge a stipulated premium at all but will merely assess participants in the plan a pro rata share of each claim filed plus expenses:

Assets:
The items on the balance sheet of the insurer which show the book value of property owned: Under state regulations, not all property or other resources can be admitted in the statement of the insurer: This gives rise to the term "nonadmitted assets:" See also Nonadmitted Assets:

Assigned Risk:
A risk which is not ordinarily acceptable to insurers and which is, therefore, assigned to insurers participating in an assigned risk pool or plan: Each participating company agrees to accept its share of These risks:

Associate in Risk Management:
A professional designation granted by the American Institute for Property and Liability Underwriters to those who have completed a series of examinations:

Attorney-In-Fact:
The individual who manages a reciprocal insurance exchange and to whom each subscriber gives authority to exchange insurance for him with other subscribers: See also Reciprocal Insurance Exchange:

Audit Bureau:
A stamping office: A central office or bureau to which agents and companies send certain daily reports and endorsements for auditing before transmittal to the insurer:

Authorization:
The amount of insurance an underwriter says he will accept on a risk of a given class on specific property: It is given for the guidance and information of agents:

Authorized Insurer:
An insurer authorized by the state to transact business in that state for specific types of insurance:

Automatic Cover:
Coverage given automatically by a policy, usually for a specified period and limited amount, to cover increasing values and newly acquired and changing interests:

Avoidance of Risk:
Taking steps to remove a hazard, engage in an alternative activity, or otherwise end a specific exposure: One of the four major risk management techniques: See Risk Management: