InsuranceInsurance GlossaryPart 5 of 13
Policy Administration Glossary
23 terms from the Insurance book's Policy Administration part, each defined in a line and linked to the chapter that explains it.
- Aggregate transaction: a single transaction that reverses later transactions, applies an out-of-sequence change and reapplies the reversed ones (Endorsements, Renewals & the Policy Transaction Model).
- Amendatory endorsement: a mandatory endorsement that rewrites parts of a policy form to comply with one state's law (Products, Coverages & Forms).
- Binder: a temporary written contract evidencing coverage pending issuance of the policy, limited in some states (90 days in California) (Quote, Bind & Issue).
- Binding: the moment coverage exists, when the insurer or an authorized agent accepts a risk from a stated time (Quote, Bind & Issue).
- Conditional renewal: an offer to renew on changed terms (reduced limits, higher deductibles, in New York commercial lines a premium increase over 10%), noticed like a nonrenewal (Endorsements, Renewals & the Policy Transaction Model).
- Coverage term: a parameter of a coverage (a limit, a deductible, an option) with its allowed values (Products, Coverages & Forms).
- Declarations page: the policy-specific schedule of insured, period, risks, coverages, limits, deductibles, premium, interests and forms (Products, Coverages & Forms).
- Edition date: the month and year that, with the form number, identifies a version of a policy form (NC 00 12 10 26) (Products, Coverages & Forms).
- Endorsement: a midterm change to a policy, or the form that adds, removes or changes coverage (Endorsements, Renewals & the Policy Transaction Model).
- Form attachment rule: a rule that infers which form editions a policy carries from its state, product version, coverages and risks (Products, Coverages & Forms).
- Lapse: the end of coverage because a renewal wasn't paid, as distinct from a cancellation (Cancellation, Nonrenewal & Notice Law).
- Mortgagee bill: billing a homeowners premium to the mortgage servicer, which pays from escrow (Billing & Premium Finance).
- Nonrenewal: an insurer's decision not to renew a policy at expiration, subject to notice periods and prohibited bases (Cancellation, Nonrenewal & Notice Law).
- Out-of-sequence endorsement: a change whose effective date is earlier than that of a transaction already processed (Endorsements, Renewals & the Policy Transaction Model).
- Pay plan: the schedule on which a policy's premium is billed (paid in full, two-pay, quarterly, monthly), with its down payment and fees (Billing & Premium Finance).
- Preemption: when one of two concurrent jobs from the same base version binds first and the other must be rebased and requoted (Endorsements, Renewals & the Policy Transaction Model).
- Premium finance company: a state-licensed lender that pays a premium to the insurer and collects installments from the insured, holding a power of attorney to cancel on default (Billing & Premium Finance).
- Proof of mailing: evidence that a notice was mailed to the required address on a date, which the law treats as proof of notice (Cancellation, Nonrenewal & Notice Law).
- Quote: a priced, time-limited offer to insure on the facts given, not a contract (Quote, Bind & Issue).
- Reinstatement (policy): a transaction that puts a cancelled policy back in force, with or without a gap in coverage (Cancellation, Nonrenewal & Notice Law).
- Renewal offer: the notice of a renewal's terms and premium, due a set number of days before expiration (Endorsements, Renewals & the Policy Transaction Model).
- Rewrite: replacing a policy or the rest of a term with a new term or policy instead of endorsing it (Endorsements, Renewals & the Policy Transaction Model).
- Short rate: a return premium method that keeps more than pro rata when the insured or a finance company cancels, limited in some states (in Florida, at least 90% of pro rata) (Cancellation, Nonrenewal & Notice Law).