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Open-ended HMOs: HMOs which allow enrolled individuals to use out-of-plan providers and still receive partial or full coverage and payment for the professional's services under a traditional indemnity plan.
Out-of-Plan (Out-of-Network): This phrase usually refers to physicians, hospitals or other health care providers who are considered nonparticipants in an insurance plan (usually an HMO or PPO). Depending on an individual's health insurance plan, expenses incurred by services provided by out-of-plan health professionals may not be covered, or covered only in part by an individual's insurance company.
Out-Of-Pocket Maximum: A predetermined limited amount of money that an individual must pay out of their own savings, before an insurance company or (self-insured employer) will pay 100 percent for an individual's health care expenses.
Outpatient: An individual (patient) who receives health care services (such as surgery) on an outpatient basis, meaning they do not stay overnight in a hospital or inpatient facility. Many insurance companies have identified a list of tests and procedures (including surgery) that will not be covered (paid for) unless they are performed on an outpatient basis. The term outpatient is also used synonymously with ambulatory to describe health care facilities where procedures are performed.
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Plan Administration: Supervising the details and routine activities of installing and running a health plan, such as answering questions, enrolling individuals, billing and collecting premiums, and similar duties.
Pre-Admission Certification: Also called pre-certification review, or pre-admission review. Approval by a case manager or insurance company representative (usually a nurse) for a person to be admitted to a hospital or in-patient facility, granted prior to the admittance. Pre-admission certification often must be obtained by the individual. Sometimes, however, physicians will contact the appropriate individual. The goal of pre-admission certification is to ensure that individuals are not exposed to inappropriate health care services (services that are medically unnecessary).
Pre-Admission Review: A review of an individual's health care status or condition, prior to an individual being admitted to an inpatient health care facility, such as a hospital. Pre-admission reviews are often conducted by case managers or insurance company representatives (usually nurses) in cooperation with the individual, his or her physician or health care provider, and hospitals.
Preadmission Testing: Medical tests that are completed for an individual prior to being admitted to a hospital or inpatient health care facility.
Pre-existing Conditions: A medical condition that is excluded from coverage by an insurance company, because the condition was believed to exist prior to the individual obtaining a policy from the particular insurance company.
Preferred Provider Organizations (PPOs): You or your employer receive discounted rates if you use doctors from a pre-selected group. If you use a physician outside the PPO plan, you must pay more for the medical care.
Primary Care Provider (PCP): A health care professional (usually a physician) who is responsible for monitoring an individual's overall health care needs. Typically, a PCP serves as a "quarterback" for an individual's medical care, referring the individual to more specialized physicians for specialist care.
Provider: Provider is a term used for health professionals who provide health care services. Sometimes, the term refers only to physicians. Often, however, the term also refers to other health care professionals such as hospitals, nurse practitioners, chiropractors, physical therapists, and others offering specialized health care services.
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Reasonable and Customary Fees: The average fee charged by a particular type of health care practitioner within a geographic area. The term is often used by medical plans as the amount of money they will approve for a specific test or procedure. If the fees are highe
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ACT OF GOD - An unpreventable
accident or event that is the result of natural causes; for example,
floods, earthquakes, or lightning.
ANTISELECTION – The tendency of
individuals who believe they have a greater than average likelihood of
loss to seek insurance protection to a greater extent than do those who
believe they have an average or a less than average likelihood of loss.
APPRAISAL - A survey by a claims
representative or claims appraiser estimating the amount of damage to
property and the cost to repair or the determination of a complete loss.
ASSESSED VALUE - The monetary worth
of real or personal property as a basis for its taxation. This value,
established by a governmental agency, is rarely used by insurers as a
means to determine indemnification.
ASSET RISK – a measure of an asset's
default of principal or interest or fluctuation in market value as a
result of changes in the market.
AUTHORIZED CONTROL LEVEL RISKED BASED
CAPITAL – insurance company’s theoretical capital amount and surplus
that is should maintain.
AVALANCHE - A
slippage of built-up snow down an incline possibly mixed with ice, rock,
and soil or plant life in what is called a debris avalanche. Avalanches
are a major danger in the mountains during the winter as a large one can
run for miles, and can create massive destruction of the lowered forest
and anything else in its path.
BENEFICIARY – The person or party
named by the owner of a life insurance policy to receive the policy
benefit.
BCEGS - Building
Code Effectiveness Grading Schedule. A classification of communities by
the Insurance Services Office based on how well they have implemented
and enforced building codes in their community.
BROAD FORM INSURANCE - Coverage for
numerous perils.
CASH VALUE – The savings element of a
permanent life insurance policy, which represents the policy owner’s
interest in the policy.
CATACLYSM - Any
great upheaval that causes sudden and violent changes, as an earthquake,
war, great flood, etc. (New World)
CATASTROPHIC RISK - The risk of a large loss by reason
of the occurrence of a peril to which a very large number of insured are
subject. (Gloss.)
CATASTROPHIC LOSS - Damage resulting
from a catastrophe.
CATEX - An exchange
through which insurers trade "standardized catastrophe units."
COINSURANCE CLAUSE - A clause
requiring the insured to maintain insurance on the property at least
equal to a stipulated percentage of its value in order to collect
partial losses in full.
CONCENTRATION FACTOR – all companies
are subject to an asset concentration factor that reflects the
additional risk of high concentrations in single exposures
CONSUMER PRICE INDEX - An index of
consumer prices based on the typical market basket of goods and services
consumed by all urban consumers during a base period.
CONTINGENT BENEFICIARY – The party
designated to receive proceeds of a life insurance policy following the
insured’s death if the primary beneficiary predeceased the insured.
CONVERTIBLE TERM INSURANCE POLICY – A
term life insurance policy that gives the policy owner the right to
convert the policy to a permanent plan of insurance.
CORRECTIVE ORDER – an order issued by
the commissioner specifying corrective actions that the commissioner has
determined are required.
CREDIT RISK – a measure of the
default risk on amounts that is due from policyholders, reinsures or
creditors.
DIASTER - A natural
or man-made event that negatively affects life, property, livelihood or
industry often resulting in permanent changes to human societies,
ecosystems and the environment.
DECLINED RISK – A proposed insured
who is considered to present a risk that is too great for an insurer to
cover.
DIRECT WRITTEN PREMIUM - The total
premiums received by a property and liability insurance company without
any adjustments for the ceding of any portion of these premiums to the
reinsures.
DIRECT INCURRED LOSS - The property
loss in which the insured peril is the proximate cause of damage or
destruction.
DROUGHT - A drought
is a long lasting weather pattern consisting of dry conditions with very
little or no precipitation. During this period, food and water supplies
can run low, and other conditions, such as famine, can result. Droughts
can last for several years and particularly damaging in areas where
residents depend on agriculture for survival.
EARTHQUAKE - A
sudden shift or movement in the tectonic plate in the Earth’s crust. On
the surface, this is manifested by a moving and shaking of the ground,
and can be massively damaging to poorly built structures.
EVIDENCE OF INSURABILITY – Proof that
a person is an insurable risk.
EXCLUSIONS, HOMEOWNERS INSURANCE -
Part of an insurance contract that excludes coverage of certain perils,
persons, property or locations.
EXPERIENCE RATING – A method of
calculating group insurance premium rates by which the insurer considers
the particular group’s prior claims and expense experience.
FACE AMOUNT – The amount of the death
benefit payable under a life insurance policy.
FEMA - Federal Emergency Management
Agency - A former independent agency that became part of the new
Department of Homeland Security in March 2003 - is tasked with
responding to, planning for, recovering from and mitigating against
disasters
FLOODPLAIN - A land
area adjacent to a river, stream, lake, estuary or other water body that
is subject to flooding. These areas, if left undisturbed, act to store
excess floodwater.
FRIENDLY FIRE - Fire intentionally
set in a fireplace, stove, furnace or other containment that has not
spread beyond it.
FREE LOOK PROVISION – An individual
life insurance and annuity provision that gives the policy owner a
stated time, usually 10 days after the policy is delivered, in which to
cancel the policy and receive a full refund on the initial premium
payment.
GRACE PERIOD – A specified length of
time within which a renewal premium that is due may be paid without
penalty.
HURRICANE - A hurricane is a low
pressure cyclonic storm system which forms over the oceans. It is
caused by evaporated water which comes off of the ocean and becomes a
storm. The Coriolis Effect causes the storms to spin, and a hurricane
is declared when this spinning mass of storms attains a wind speed
greater than 74mph.
INSURANCE TO VALUE - The amount of
insurance written on property is approximately equal to its value. An
insured most always wants to insure all property to value.
INCONTESTABILITY PROVISION – An
insurance and annuity provision that limits the time within which the
insurer has the right to avoid the contract on the ground of material
misrepresentation in the application for the policy.
IRREVOCABLE BENEFICIARY – A life
insurance policy beneficiary who has a vested interest in the policy
proceeds even during the insured’s lifetime because the policy owner has
the right to change the beneficiary designation only after obtaining the
beneficiary’s consent.
INSURABLE INTEREST – The interest an
insurance policy owner has in the risk that is insured. The owner of a
life insurance policy has an insurable interest in the insured when the
policy owner is likely to benefit if the insured continues to live and
is likely to suffer some loss or detriment if the insured dies.
LANDSLIDE - A
disaster closely related to an avalanche, but instead of occurring with
snow, it occurs involving actual elements of the ground, including
rocks, trees, parts of houses, and anything else which may happen to be
swept in.
LIABILITY INSURANCE - Insurance
coverage that offers protection against claims alleging that a property
owner’s negligence or inappropriate action resulted in bodily injury or
property damage to another party.
LIFE AND HEALTH GUARANTEE ASSOCIATION
– An organization that operates under the supervision of a state
insurance commissioner to protect policy owners, insured's,
beneficiaries, and specified others against losses that result from the
financial impairment or insolvency of a life insurer that operates in
the state.
LIMNIC ERUPTION - A
sudden release of asphyxiating or inflammable gas from a lake.
LOSS OF USE INSURANCE - Compensation
for loss caused because the policyholder has lost the use of his
property.
LOSS PAYABLE CLAUSE - A policy
condition that enables an insured to direct the company to pay any loss
that may be due to a third party.
MATERIAL MISREPRESENTATION – A
misrepresentation that would effect the insurance company’s evaluation
of a proposed insured.
MORTALITY TABLES – Charts that show
the death rates an insurer may reasonably anticipate among a particular
group of insured lives at certain ages.
MORTGAGE INSURANCE - A contract that
insures the lender against loss caused by a mortgagor’s default on a
government mortgage or conventional mortgage.
MORTGAGEE CLAUSE - A clause in an
insurance policy that makes a claim jointly payable to the policyholder
and the party that holds a mortgage on the property.
MUDSLIDE - A
mudslide is a slippage of mud because of poor drainage of rainfall
through soil. An underlying cause is often deforestation or lack of
vegetation.
MULTI PERIL INSURANCE - Personal and
business property insurance that combines in one policy several types of
property insurance covering numerous perils.
NAMED PERIL POLICY - The insurance
contract under which covered perils are listed. Benefits for a covered
loss are paid to the policy-owner. If an unlisted peril strikes, no
benefits are paid.
NATURAL AND PROBABLE CONSEQUENCES -
Consequences from a given act that a reasonable person could foresee.
NEGATIVE TREND – with respect to a
life and/or health insurer, negative trend over a period of time, as
determined in accordance with the “Trend Test Calculation” included in
the RBC instructions
NFIP-NATIONAL FLOOD INSURANCE PROGRAM
(NFIP) - The program of flood insurance coverage and floodplain
management administered under the Act and applicable Federal regulations
promulgated in Title 44 of the Code of Federal Regulations, Subchapter
B.
OFF-BALANCE SHEET RISK – a measure of
risk due to excessive rates of growth, contingent liabilities or other
items not reflected on the balance sheet.
100 YEAR FLOOD - A
flooding condition which has a one percent chance of occurring each
year. The 100-year flood level is used as the base planning level for
floodplain management in the National Flood Insurance Program.
ORIGINAL AGE CONVERSION – A
conversion of a term life insurance policy to a permanent plan of
insurance at a premium rate, based on the insured’s age when the
original term policy was purchased.
PERMANENT LIFE INSURANCE – Life
insurance that provides coverage throughout the insured’s lifetime and
also provides a savings element.
POLICY ANNIVERSARY – As a general
rule, the date on which coverage under an insurance policy became
effective.
POLICY RIDER – An amendment to an
insurance policy that becomes part of the insurance contract and either
expands or limits the benefits payable under the contract.
PREFERRED RISK – A proposed insured
who presents a significantly less than average likelihood of loss and
who is charged a lower than standard premium rate.
RETENTION LIMIT – 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.
REPLACEMENT COST - 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.
RISK BASED CAPITAL (RBC) – the amount
of required capital that the insurance company must maintain based on
the inherent risks in the insurer’s operations
.
RBC INSTRUCTIONS – 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.
RBC RATIO – 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 is necessary to support the insurance
operations.
RBC STATISTIC – 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
SAFFIR SIMPSON SCALE - A 1-5 rating
based on a hurricane’s present intensity. This is used to give an
estimate of the potential property damage and flooding expected along
the coast from a hurricane landfall. Wind speed is the determining
factor in the scale.
SCHEDULED PROPERTY - Listing specific
personal property for a stated insured value. This is usually considered
for valuable items that are subject to limited coverage.
SINK HOLE - A sinkhole is a localized
depression in the surface topography, usually caused by the collapse of
a subterranean structure, such as a
cave.
Although rare, large sinkholes that develop suddenly in populated areas
can lead to the collapse of buildings and other structures.
STORM SURGE - A storm surge is an onshore rush of water associated with
a low pressure weather system, typically a tropical cyclone. Storm
surge is caused primarily by high winds pushing on the ocean’s surface.
The wind causes the water to pile up higher than the ordinary sea
level. Storm surges are particularly damaging when they occur at the
time of high tide, combing the effects of the surge and the tide.
SOLAR FLARE - A solar flare is a
violent explosion in the
Sun's
atmosphere with an energy equivalent to tens of millions of
hydrogen bombs. Solar flares take place in the solar
corona
and
chromosphere, heating the gas to tens of millions of kelvins and
accelerating electrons, protons and heavier ions to near the speed of
light. They produce electromagnetic radiation across the spectrum at all
wavelengths from long-wave radio signals to the shortest wavelength
gamma rays. Solar flare emissions are a danger to orbiting satellites,
manned space missions, communications systems, and power grid systems.
SYNTHETIC GUARANTEED INVESTMENT
CONTRACT – modified guaranteed investment contract in which the
underlying assets of the synthetic contract are owed by the plan itself
rather than the insurance company as is the case with the GIC. This
ownership rights is of particular importance if there is a concern about
the long term financial soundness of an insurance company. The
synthetic plan segregates the plan’s assets from the assets of the
insurance company.
SUBROGATION - The circumstance where
an insurance company takes the place of an insured in bringing a
liability suit against a third party who caused injury to the insured.
SUBSIDENCE - Movement of the land on
which property is situated. A structure built on a hillside may slide
down the hill due to earth movement caused by heavy rains.
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TENANTS INSURANCE - Coverage for the
contents of renter’s home or apartment and for liability. Tenant
policies are similar to homeowners insurance, except that they do not
cover the structure.
Total Adjusted Capital - commonly
refers to an insurance company's capital base under Standard & Poor's
capital adequacy model. It includes shareholders' funds and adjustments
on equity, asset values and reserves.
UMBRELLA POLICY - Umbrella coverage
is insurance coverage that extends the terms of a regular insurance
policy once coverage limits for the regular policy have been reached.
Specifically, umbrella coverage is for people who want protection
against a large jury award that is not covered in their standard policy.
UNDERWRITING – The process of
identifying and classifying the degree of risk represented by a proposed
insured.
UNDERWRITING RISK – a measure of the
risk that arises from under-estimating the liabilities from business
already written or inadequately pricing current or prospective
business.
UNFRIENDLY FIRE - A fire that escapes
from its normal contained area. For example, fire in the fireplace leaps
onto the sofa.
WRITTEN PREMIUMS - The total premiums
generated from all policies written by an insurance company within a
given period of time.
