The amount of business an insurer is able to write based on a comparison of the insurer’s written premium to the size of its policyholders’ surplus
is simply the sum of the loss ratio and the expense ratio
indicates the cost of doing business.
Also called specific rates are used to assign a specific insurance rate that reflects the unique characteristics of an insured or the insured’s property.
Law of large numbers
says that the more examples used to develop any statistic, the more reliable the statistic will be.
is used to compare the company’s operations from year to year. It shows the percentage of losses the company incurred for every dollar of earned premium.
also called Manual Rates, are rates that apply to all insureds in the same rating category or rating class
Principle of indemnity
states that when a loss occurs, an individual should be restored to the approximate financial condition he or she was in before the loss, no more and no less.
What is ‘premium per capita’ ?
We all know that ‘per capita’ means ‘per person’. In insurance industry ‘premium per capita’ means the average insurance spending per person.
is the sale of insured property that has been taken over as a part of a loss settlement for a claim.
is the process where one insurance company seeks reimbursement from another company for a previously paid claim
An insurance company employee who evaluates applicants for insurance, selects those that are acceptable to the insurer, prices coverage and determines policy terms and conditions
the portion of the written premium that applies to the part of the policy period that has not yet occurred.
are premiums written on policies during a calendar year from Jan 1st to Dec 31 st of that year.
FIO -Federal Insurance Office
It is a federal agency, structured under US Treasury Department, mainly to monitor the national insurance related policies and oversee the industry. FIO doesn’t have any regulatory authority as such, but rather intended to address state related insurance regulation issues.
NAIC -National Association of Insurance Commissioners
It is more of a support organization governed by chief insurance regulators of states. It is structures as a more collaborative entity that establishes standards and best practices for the participants (who are mostly the state regulatory bodies)
FSOC -Financial Stability Oversight Council
It is a federal council established to identify and oversee the risks around the financial stability of the US.
Dodd–Frank Wall Street Reform and Consumer Protection Act is one of the significant acts in recent times within the US financial services industry. It is enacted during the Obama administration in 2010, as a response to the US financial crisis that took place a decade back. In part, the act forms a strong base for enacting both FIO and FSOC.