Glossary
The insurance industry tends (and, in many cases, needs) to use quite a lot of jargon as short-hand, which can be confusing at times. But, it is vitally important to understand the definitions of these terms and their importance to you and your school.
Compliance: Insurance compliance refers to the internal controls, processes and procedures insurance companies use to manage matters which fall under the remit of the regulatory authorities.
Fronting: Fronting refers to the use of a locally-licensed, admitted insurer on behalf of an insurer based in another jurisdiction. The locally-admitted insurer then typically transfers the entirety of the risk to the overseas insurer.
Reinsurance: Reinsurance is essentially insurance for insurance companies. This is done to transfer some (and occasionally all) of the financial risk that insurance companies assume when insuring cars, homes, people, and businesses to another company, the reinsurer.
Risk: An insurance risk is a threat or peril that the insurance company has agreed to insure against in the policy wordings. inadequate or inappropriate underwriting, product design, pricing and claims set-tlement will expose an insurer to financial loss and consequent inability to meet its liabilities.
Insolvency: Insolvency is a UK legal term used when a company is unable to meet its liabilities (the equivalent of bankruptcy for an individual). During the insolvency process, the corporate entity con-cerned is given respite from its creditors and is allowed to sell assets to generate funds. These funds are then typically used to pay the company’s creditors as a fiduciary priority.
Insurance: Insurance is a legally-binding contract between an insurer (a licensed insurance company) and an insured (purchaser of the contract) in which an insurer guarantees to indemnify the other party against the risk of loss.
Jurisdiction: The territory in which a dispute between an insurer and an insured relating to the insurance contract will be heard.
Underwriting: To Underwrite is to insure or promise to be financially responsible in case of loss or damage.
Glossary
The insurance industry tends (and, in many cases, needs) to use quite a lot of jargon as short-hand, which can be confusing at times. But, it is vitally important to understand the definitions of these terms and their importance to you and your school.
Compliance: Insurance compliance refers to the internal controls, processes and procedures insurance companies use to manage matters which fall under the remit of the regulatory authorities.
Fronting: Fronting refers to the use of a locally-licensed, admitted insurer on behalf of an insurer based in another jurisdiction. The locally-admitted insurer then typically transfers the entirety of the risk to the overseas insurer.
Reinsurance: Reinsurance is essentially insurance for insurance companies. This is done to transfer some (and occasionally all) of the financial risk that insurance companies assume when insuring cars, homes, people, and businesses to another company, the reinsurer.
Risk: An insurance risk is a threat or peril that the insurance company has agreed to insure against in the policy wordings. inadequate or inappropriate underwriting, product design, pricing and claims set-tlement will expose an insurer to financial loss and consequent inability to meet its liabilities.
Insolvency: Insolvency is a UK legal term used when a company is unable to meet its liabilities (the equivalent of bankruptcy for an individual). During the insolvency process, the corporate entity con-cerned is given respite from its creditors and is allowed to sell assets to generate funds. These funds are then typically used to pay the company’s creditors as a fiduciary priority.
Insurance: Insurance is a legally-binding contract between an insurer (a licensed insurance company) and an insured (purchaser of the contract) in which an insurer guarantees to indemnify the other party against the risk of loss.
Jurisdiction: the territory in which a dispute between an insurer and an insured relating to the insur-ance contract will be heard.
Underwriting: To Underwrite is to insure or promise to be financially responsible in case of loss or damage.