# Insurance

> How insurance works in software, from the rate filed with a state and the agent who sells it to the policy, the claim, the reserve and the reinsurer behind it.

An auto policy, a commercial liability program, a cyber policy from an MGA, a twenty-year term life policy and a protection plan sold at checkout look like different businesses, and underneath they run on the same promise: a premium collected now for a payment that may come later, priced on a rate filed with a state, sold by a licensed producer, changed only through dated transactions, earned day by day, and backed by reserves and capital a regulator watches. One policy lives in several systems at once (the rater, the policy system, billing, claims, the agency's system, the reinsurer's bordereau, the statutory statement), each answerable to fifty-six jurisdictions' rules on rates, forms, notices and claim deadlines. This book surveys how the industry does each piece, benchmarked across Progressive, State Farm, Travelers, Lemonade, Chubb, Kinsale, MetLife, Guidewire, Duck Creek, Socotra, Verisk and the others, with no single company as the model, and how you'd build it, extending one core data model chapter by chapter. Health insurance stays in the Health Tech book.

It reads in thirteen parts, plus a glossary: the business (the market, how insurers make money, who carries the risk, MGAs and fronting), regulation and solvency (the state system, rate and form filing, market conduct, statutory accounting, capital and failure), distribution (agents, brokers, licensing, commissions and leads), rating and underwriting, policy administration (products, quote and bind, endorsements, cancellation, billing), claims, reserving, catastrophe and reinsurance, personal lines, commercial and specialty lines, workers' compensation, life and annuities, embedded insurance and service contracts, and running the platform.

## Chapters

- [The Insurance Business](https://www.syntaqx.com/books/insurance/insurance-business): How insurance works: carriers, agents, MGAs and reinsurers, where the premium dollar goes, the life of a policy, a claim and a life policy, and the data model.
- [The Insurance Landscape](https://www.syntaqx.com/books/insurance/insurance-landscape): The US insurance market in NAIC numbers: premium by line and group, concentration, brokers by revenue, the insurtechs' filings, core vendors and take-privates.
- [How Insurers Make Money](https://www.syntaqx.com/books/insurance/how-insurers-make-money): Written, earned and unearned premium worked through; loss, LAE, expense and combined ratios; investment income and float; surplus, leverage and the cycle.
- [Who Carries the Risk](https://www.syntaqx.com/books/insurance/who-carries-the-risk): Stock, mutual, reciprocal, fraternal, Lloyd's, captives and cells, risk retention groups and mutual holding companies, and what each form means for your data.
- [MGAs, Programs & Fronting](https://www.syntaqx.com/books/insurance/mgas-programs-and-fronting): Delegated underwriting and binding authority, program administrators, fronting and hybrid fronting, capacity providers, the NAIC MGA Act and the bordereau.
- [The State System](https://www.syntaqx.com/books/insurance/the-state-system): How US insurance is regulated: McCarran-Ferguson, commissioners, the NAIC and accreditation, model law adoption, FIO and covered agreements, and federal law.
- [Filing Rates & Forms](https://www.syntaqx.com/books/insurance/rate-and-form-filing): Prior approval, file-and-use and use-and-file, Prop 103, SERFF, loss costs and multipliers, readability rules, and how a filing becomes product config.
- [Market Conduct & Unfair Practices](https://www.syntaqx.com/books/insurance/market-conduct): Market conduct exams and MCAS, the Unfair Trade Practices Act, complaint registers and DOI clocks, record retention, advertising, and what examiners ask for.
- [Data, AI & Privacy Rules](https://www.syntaqx.com/books/insurance/data-ai-and-privacy-rules): The NAIC AI bulletin and who adopted it, Colorado SB21-169, NY Circular Letter 7, data security Model 668 and Part 500, GLBA and Model 672, insurance scores.
- [Statutory Accounting & the Annual Statement](https://www.syntaqx.com/books/insurance/statutory-accounting): SAP versus GAAP, admitted and nonadmitted assets, unearned premium methods, the annual statement and schedules, filing deadlines, and what the ledger keeps.
- [Solvency & Capital](https://www.syntaqx.com/books/insurance/solvency-and-capital): Risk-based capital and its action levels worked, trend tests, IRIS ratios, ORSA, holding company rules, dividend limits, group capital and rating agencies.
- [When Insurers Fail](https://www.syntaqx.com/books/insurance/when-insurers-fail): Conservation, rehabilitation and liquidation, guaranty associations and their caps worked, what happens to policies and claims, Florida's failures, UDS.
- [Stressed & Residual Markets](https://www.syntaqx.com/books/insurance/stressed-markets): Florida's failures, reforms and Citizens depopulation; California's Prop 103, wildfire and FAIR Plan; auto plans; and the residual market as a system.
- [Agents, Brokers & Channels](https://www.syntaqx.com/books/insurance/agents-brokers-and-channels): Captive, independent and direct channels, brokers, wholesalers, aggregators and embedded: the economics, who the agent serves, and the surplus lines home state.
- [Producer Licensing & Appointments](https://www.syntaqx.com/books/insurance/producer-licensing): The Producer Licensing Model Act, lines of authority, NIPR, the NPN and PDB, nonresident licenses, CE, appointments, terminations and checks before you pay.
- [Commissions & Agency Accounting](https://www.syntaqx.com/books/insurance/commissions-and-agency-accounting): Commission schedules, new and renewal rates, contingent commissions and disclosure, agency bill and direct bill, premium trust accounts, statements, clawbacks.
- [Comparative Raters & Agency Systems](https://www.syntaqx.com/books/insurance/comparative-raters-and-agency-systems): Comparative raters, bridging to carrier portals, prefill, Ivans and AL3 downloads, agency management systems, and the carrier APIs agents quote and bind on.
- [Leads, Aggregators & Consent](https://www.syntaqx.com/books/insurance/leads-and-consent): Insurance lead markets, TCPA prior express written consent, the vacated one-to-one rule, consent evidence, state mini-TCPA laws and quote-request privacy.
- [How a Rate Is Built](https://www.syntaqx.com/books/insurance/how-a-rate-is-built): The filed rating algorithm: base rates, territories, class and deductible factors, loss costs and LCMs, rounding order, and a North Carolina auto premium.
- [What You May Rate On](https://www.syntaqx.com/books/insurance/rating-factors-and-limits): Rating factors by line and the states that ban or limit them: credit, gender, marital status, prior insurance, Prop 103, price optimization, bias testing.
- [Consumer Reports & Third-Party Data](https://www.syntaqx.com/books/insurance/consumer-reports-and-third-party-data): MVRs, CLUE and loss history, prefill, insurance scores and property data; the FCRA for insurers, adverse action after Safeco v. Burr, and permissible purpose.
- [Telematics & Usage-Based Insurance](https://www.syntaqx.com/books/insurance/telematics): Telematics programs, the pipeline from phone or car to a rating factor, pay-per-mile billing, California's device limit, consent, and the FTC's GM order.
- [Underwriting Rules, Referrals & Models](https://www.syntaqx.com/books/insurance/underwriting): Eligibility rules, filed underwriting guidelines, authority and referrals, inspections and underwriting periods, rules engines, and AI model governance.
- [Products, Coverages & Forms](https://www.syntaqx.com/books/insurance/products-and-coverages): How a product is modeled: coverages, terms, limits, deductibles and options, ISO and bureau forms, state amendatory endorsements, declarations, versions.
- [Quote, Bind & Issue](https://www.syntaqx.com/books/insurance/quote-bind-and-issue): The quote lifecycle, binders, issuance and declarations, policy numbers, 12:01 a.m. effective times, e-delivery consent, and proof of insurance.
- [Endorsements, Renewals & the Policy Transaction Model](https://www.syntaqx.com/books/insurance/endorsements-and-renewals): Midterm changes and pro rata deltas, out-of-sequence endorsements replayed, preemption, rewrites, renewal offers, conditional renewal, bitemporal versions.
- [Cancellation, Nonrenewal & Notice Law](https://www.syntaqx.com/books/insurance/cancellation-and-nonrenewal): Who may cancel and when, notice days by state and reason, proof of mailing, a notice-date calculation, pro rata vs short rate refunds, and reinstatement.
- [Billing & Premium Finance](https://www.syntaqx.com/books/insurance/billing-and-premium-finance): Direct bill plans and installments, nonpayment and cancellation, premium finance companies and their power-of-attorney cancellations, refunds, and escrow.
- [First Notice, Coverage & Triage](https://www.syntaqx.com/books/insurance/first-notice-and-triage): First notice of loss channels and data, coverage verification as of the loss date, reservation of rights and denials, segmentation, assignment, the claim file.
- [Claim Handling Law & Clocks](https://www.syntaqx.com/books/insurance/claim-handling-law): The NAIC unfair claims models, state claim deadlines in CA, TX, FL and NY computed on one claim, catastrophe extensions, Texas 542 interest, adjuster licenses.
- [Exposures, Reserves & Payments](https://www.syntaqx.com/books/insurance/reserves-and-payments): Exposures as the unit of money on a claim, case reserves by cost type with a worked walk, authority, multi-payee and mortgagee checks, OFAC, 1099s, reopening.
- [Auto Claims & Total Loss](https://www.syntaqx.com/books/insurance/auto-claims-and-total-loss): Auto claims: estimating, repair rules and direct repair, total loss thresholds, a valuation with taxes and fees, salvage and title, rental and injury claims.
- [Property Claims](https://www.syntaqx.com/books/insurance/property-claims): Property claims: estimating, replacement cost vs ACV with a worked roof claim, matching, appraisal, public adjusters, Florida's AOB ban, mortgagees.
- [Subrogation, Salvage & Recovery](https://www.syntaqx.com/books/insurance/subrogation-and-salvage): Subrogation rights and waivers, inter-company arbitration, deductible sharing with comparative fault, salvage auctions and net proceeds, recovery accounting.
- [Fraud & SIU](https://www.syntaqx.com/books/insurance/insurance-fraud): Insurance fraud: SIU and fraud plan rules in CA, NY, FL and TX, reporting clocks, fraud bureaus, industry claim databases, analytics, rings and staged crashes.
- [Bad Faith & Litigation](https://www.syntaqx.com/books/insurance/bad-faith-and-litigation): First- and third-party bad faith, statutory remedies in TX, FL and WA, Florida's 2023 reforms, time-limited demands, litigation management and social inflation.
- [Loss Reserving & Development](https://www.syntaqx.com/books/insurance/loss-reserving): Case reserves and IBNR, loss triangles, chain ladder and Bornhuetter-Ferguson worked, LAE, Schedule P, the actuarial opinion, and development in 10-Ks.
- [Catastrophe Events](https://www.syntaqx.com/books/insurance/catastrophes): PCS event designation and estimates, cat codes on claims, surge operations and emergency adjusters, insured cat loss figures, and emergency orders by state.
- [Catastrophe Models & Their Regulators](https://www.syntaqx.com/books/insurance/catastrophe-models): What a cat model is and outputs (event loss tables, EP curves, AAL, PML) worked, the vendors, the Florida Commission, California 2644.4.5 and exposure data.
- [Reinsurance Structures](https://www.syntaqx.com/books/insurance/reinsurance-structures): Treaty and facultative, quota share, surplus, per risk and cat excess of loss, layers, reinstatements, ceding commissions, and a loss worked through a program.
- [Reinsurance Operations](https://www.syntaqx.com/books/insurance/reinsurance-operations): Calculating cessions, reinsurance accounts and bordereaux, recoverables and collections, credit for reinsurance and collateral, Schedule F, and renewals.
- [Cat Bonds, ILS & State Cat Funds](https://www.syntaqx.com/books/insurance/alternative-capital): Cat bonds and their triggers worked, sidecars and collateralized reinsurance, market size, the Florida Hurricane Catastrophe Fund and TRIA, with the math.
- [Personal Auto](https://www.syntaqx.com/books/insurance/personal-auto): Compulsory auto insurance and minimum limits, no-fault and PIP worked, UM and UIM stacking, rideshare gaps, SR-22, state verification systems, the rate cycle.
- [Homeowners & Renters](https://www.syntaqx.com/books/insurance/homeowners-and-renters): Homeowners forms and coverages, replacement cost and ACV, roof rules, hurricane deductibles worked, mortgagees and escrow, condo and renters, and availability.
- [Flood & the NFIP](https://www.syntaqx.com/books/insurance/flood-and-the-nfip): The NFIP and Write Your Own, Risk Rating 2.0 and a premium built step by step, mandatory purchase, reauthorization lapses, private flood and reform.
- [Pet & Travel Insurance](https://www.syntaqx.com/books/insurance/pet-and-travel): The NAIC pet and travel model acts and adoption, waiting periods and preexisting conditions worked, wellness plans, and limited lines travel sales.
- [The Commercial Lines Map](https://www.syntaqx.com/books/insurance/commercial-lines): BOP, package, CGL, property, commercial auto, umbrella and inland marine; occurrence vs claims-made; schedule and experience rating and loss runs.
- [Professional & Management Liability](https://www.syntaqx.com/books/insurance/professional-and-management-liability): E&O, D&O and EPLI as claims-made products: retro dates, tails and extended reporting periods worked under New York's rules, and defense within limits.
- [Cyber Insurance](https://www.syntaqx.com/books/insurance/cyber-insurance): The cyber market in NAIC figures, coverages, war and state-backed attack exclusions, ransomware and OFAC, response panels, and scan-driven underwriting.
- [Surety Bonds](https://www.syntaqx.com/books/insurance/surety): The three-party bond, contract vs commercial bonds, the Miller Act, Circular 570 and the 10% underwriting limitation worked, indemnity and e-bonds.
- [Certificates of Insurance](https://www.syntaqx.com/books/insurance/certificates-of-insurance): ACORD certificates, what a certificate does and doesn't do, additional insured endorsements, NY, Texas and NCOIL certificate laws, and COI issuing and tracking.
- [Excess & Surplus Lines](https://www.syntaqx.com/books/insurance/excess-and-surplus-lines): Going non-admitted: eligibility, diligent search, stamping offices and SL taxes, the NRRA home-state rule worked for multistate risks, E&S carriers.
- [Crop Insurance](https://www.syntaqx.com/books/insurance/crop-insurance): Federal crop insurance: FCIC, RMA and AIPs, the 2027 SRA's risk sharing worked, subsidies, a revenue guarantee worked, and acreage reporting.
- [Workers' Compensation](https://www.syntaqx.com/books/insurance/workers-compensation): Statutory coverage and employers liability, NCCI and independent bureaus, monopolistic and competitive state funds, Texas opt-out, self-insurance, PEOs.
- [Rating Workers' Comp & Premium Audit](https://www.syntaqx.com/books/insurance/rating-workers-comp): Class codes and payroll, the premium algorithm, NCCI's experience mod worked with its primary/excess split, schedule rating, audit, pay-as-you-go, retro.
- [Workers' Comp Claims](https://www.syntaqx.com/books/insurance/workers-comp-claims): Injury reports and IAIABC EDI, compensability clocks, waiting periods and indemnity worked, medical fee schedules, return to work, Medicare reporting.
- [Life Products as Data](https://www.syntaqx.com/books/insurance/life-products): Term, whole, universal, indexed and variable life and final expense: what each stores and computes, riders, nonforfeiture and the policy values table.
- [Annuities & Riders](https://www.syntaqx.com/books/insurance/annuities): Fixed, MYGA, indexed, RILA, variable, SPIA and DIA annuities: crediting, riders, surrender charges and MVAs worked, nonforfeiture, free look, SEC overlay.
- [Illustrations](https://www.syntaqx.com/books/insurance/illustrations): Life illustrations under Model #582, the illustration actuary, the AG 49 family for indexed UL, in-force illustrations, and annuity illustrations (#245).
- [Best Interest, Replacements & 1035 Exchanges](https://www.syntaqx.com/books/insurance/annuity-best-interest): Model #275 best interest and adoption, Reg BI overlap, the DOL fiduciary rule to its vacatur, Model #613 replacements, 1035 exchanges and DTCC transfers.
- [Life Underwriting](https://www.syntaqx.com/books/insurance/life-underwriting): Traditional evidence, accelerated triage, MIB, prescription histories, MVRs and mortality scores under the FCRA, Colorado 10-1-1, genetic and HIV rules.
- [In-Force Administration](https://www.syntaqx.com/books/insurance/in-force-administration): Premium modes, grace, lapse and notices, reinstatement, policy loans, conversions, beneficiary changes, DTCC positions and commissions, and ACORD TXLife.
- [Life Insurance & the Tax Code](https://www.syntaqx.com/books/insurance/life-insurance-and-tax): The 7702 tests and corridor, 7702A MECs and the 7-pay test, loans and withdrawals, death benefits, 1035 basis, 1099-R and 1099-INT, and the testing engine.
- [Death Claims & Unclaimed Benefits](https://www.syntaqx.com/books/insurance/death-claims-and-unclaimed-benefits): Contestability and suicide clauses, who gets paid, interest on delayed proceeds worked, Death Master File matching, the multistate settlements and escheat.
- [Life Reserves, Capital & Private Equity](https://www.syntaqx.com/books/insurance/life-reserves-and-capital): PBR and the Valuation Manual (VM-20, VM-21, VM-22), AG 55, life reinsurance, asset-manager-owned insurers, Bermuda, sidecars and pension risk transfer.
- [Group Life & Disability](https://www.syntaqx.com/books/insurance/group-life-and-disability): Group term life, AD&D, STD and LTD, voluntary benefits, ERISA claim rules, private plans for state disability and leave, carrier enrollment and billing.
- [Embedded Insurance](https://www.syntaqx.com/books/insurance/embedded-insurance): Insurance sold inside another product's flow: licensing models, what a partner may say, opt-in and disclosure law, revenue share, and the offer-to-claim API.
- [Service Contracts & Warranties](https://www.syntaqx.com/books/insurance/service-contracts): What is and isn't insurance, the NAIC Service Contracts Model Act, Florida, New York and Texas regimes, obligors and reimbursement insurers, and Magnuson-Moss.
- [Vehicle Service Contracts & GAP](https://www.syntaqx.com/books/insurance/vehicle-service-contracts-and-gap): Vehicle service contract law, dealer and third-party obligors, claims and repair authorization, GAP as insurance or waiver, and refunds on payoff, worked.
- [Home Warranties & Product Protection](https://www.syntaqx.com/books/insurance/home-warranties-and-protection-plans): Home warranty licensing in Florida, California and Texas, consumer protection plans at scale, claims as repair-or-replace logistics, and FTC enforcement.
- [Insurance System Architecture](https://www.syntaqx.com/books/insurance/insurance-system-architecture): The policy, billing and claims split, effective dating and bitemporal records, the rating service, documents, the insurance ledger and its feeds, and events.
- [Core Platforms](https://www.syntaqx.com/books/insurance/core-platforms): Guidewire, Duck Creek, Majesco, Sapiens, Socotra, EIS, Insurity, OneShield and the life platforms: figures from filings, how each models products, build vs buy.
- [ACORD & Data Standards](https://www.syntaqx.com/books/insurance/acord-and-data-standards): ACORD forms, AL3, P&C XML and TXLife, newer standards, IAIABC claims EDI with its codes and clocks worked, statistical plans, and data models in practice.
- [Regulatory & Statistical Reporting](https://www.syntaqx.com/books/insurance/regulatory-and-statistical-reporting): Statistical plans and agents, data calls and the MCAS, annual statement production, premium tax and retaliatory tax worked, and how reporting shapes the ledger.
- [Replacing a Core System](https://www.syntaqx.com/books/insurance/replacing-a-core-system): Renewal rollover versus big bang, migrating in-force policies and open claims, parallel runs, the long tail of legacy life systems, and what filings say.
- [Insurance Glossary](https://www.syntaqx.com/books/insurance/glossary): Insurance terms by part: business, regulation, distribution, rating, policy admin, claims, reinsurance, personal, commercial, comp, life, embedded, platform.