A direct writer is an insurance company that sells insurance policies through its own sales agents and does not use independent insurance agents. Direct writers are also sometimes called “captive agents.” What is an exclusive agent in insurance? An exclusive agent is an insurance agent who is authorized to sell insurance for only one insurance … Read more
A bordereau is a report submitted by an insurance broker to an insurance company, providing details of the insurance policies that have been arranged for a client. The report includes information on the nature of the risk covered, the premium charged and the period of cover. What is facultative reinsurance? Facultative reinsurance is a type … Read more
ATIMA is an acronym that stands for Actual Total Insured Value Average. It is a measure of an insurance policy’s value that considers both the actual value of the property insured and the policy’s average total value over time. The ATIMA is used to help insurance companies set premiums and to determine whether a policy … Read more
A valuation premium is a type of premium that is paid by a policyholder to an insurance company in order to have the insurance company’s valuation of the policyholder’s property or liability insured. The valuation premium is typically a percentage of the value of the property or liability being insured. What are the common terms … Read more
Losses and loss-adjustment expenses are the amount of money an insurance company pays out in claims and the cost of settling those claims. This can include the cost of investigating and defending against claims, as well as any legal fees associated with settling a claim. What two kinds of losses must insurers calculate for their … Read more
The total insurable value (TIV) of a property is the maximum amount that an insurer is willing to pay in the event of a total loss. The TIV is determined by the insurer based on the property’s value, the policy limit, and the deductible. What does 80% coinsurance mean in commercial insurance? Coinsurance is a … Read more
A product recall insurance policy is insurance coverage that a company purchases to financially protect itself from the costs associated with a product recall. This type of insurance can help a company cover the costs of not only recalling a product, but also the costs of investigating and correcting the issue that led to the … Read more
An aleatory contract is a contract in which one or both parties to the contract stand to gain or lose something of value depending on the occurrence or non-occurrence of an uncertain future event. The word “aleatory” comes from the Latin word for “chance” or “luck.” contracts are typically insurance contracts, in which the insurer … Read more
A loss portfolio transfer (LPT) is an insurance transaction in which an insurer sells a block of business to another insurer. The transaction is typically done to transfer risk to another insurer, or to free up capital for the selling insurer. LPTs can be done on a voluntary basis, or they can be involuntary (forced) … Read more
A second surplus is the amount of money that an insurance company has available to pay claims after meeting all of its policyholder obligations. The second surplus is also known as the company’s net worth. What is first surplus in reinsurance? First surplus in reinsurance is the reinsurance coverage that is purchased by an insurance … Read more
