“Q” Schedule. A schedule of the business expenses of a life insurer required by the New York State Code to be filed to determine compliance with the state’s limitation on total expenses. This limitation sets a cap on commissions.
Quadruple Indemnity. A multiple indemnity form similar to double indemnity and triple indemnity. See also Multiple Indemnity.
Qualification Period (QP). The period of time that an individual must be totally disabled before becoming eligible for residual benefits. The policy’s elimination period also must be satisfied.
Qualified Condition Exclusion. A rider that excludes coverage for a specified medical problem for a specified period of time.
Qualified Medicare Beneficiary (QMB). An individual whose income is below the federal poverty guidelines. In these cases, the state is required to pay the Medicare Part B premiums, plus any deductibles or co-payments.
Qualified Plan. A retirement plan filed and approved by the IRS that does not discriminate as to participation, and where the contributor (usually the employer) receives a tax deduction for plan contributions, and investment income is tax deferred until paid out.
Qualifying Event. An occurrence (such as death, termination of employment, divorce, etc.) that triggers an insured’s protection under COBRA, and continues to pay benefits under a group insurance plan for former employees and their families who would otherwise lose health care coverage.
Qualifying Terminal Interest Property (QTIP). A trust that may contain marital deduction property as determined by the executor at some future time. All trust income goes to the surviving spouse.
Quality Assurance. Activities involving a review of quality of services and the taking of any corrective actions to remove any deficiencies.
Quantity Discount. A premium discount given for the purchase of a policy with a larger face amount. See also Policy Fee.
Quarantine Benefit. A benefit paid for loss of time resulting from the quarantining of an insured by health authorities.
Quarantine Indemnity. See Quarantine Benefit.
Quasi-Contract. A legal doctrine for situations in which there is no specifically drawn contract. It prevents unjust enrichment or injustice by treating the situation as if a contract actually had been in effect.
Quasi-Insurance Institutions. A term sometimes applied to government institutions created to carry out social insurance arrangements that have some, but not all, the characteristics of insurers (e.g., the U.S. Department of Health and Human Services).
Quick Assets. Assets that are quickly convertible into cash.
Quid Pro Quo. Latin for “this for that,” or “one thing for another.” In insurance it refers to the consideration in an insurance contract that calls for the exchange of values by both parties to the contract in order for it to be a valid contract. See also Consideration.
Quota Share. When more than one policy or insurer must respond to a property loss for a risk according to a percentage or its proportionate share of the total limits applicable. Premiums are usually shared in the same proportion as the limits.
Quota Share Reinsurance. A form of pro rata reinsurance (proportional) where the reinsurer assumes an agreed percentage of each insurance policy being insured and shares all premiums and losses accordingly with the reinsured.
Radioactive Contamination Insurance. Coverage added to a property policy for certain risks where there is neither a nuclear reactor nor nuclear fuel on the premises but which might occasionally be exposed to contamination damage from other material on the insured’s premises. Liability losses caused by nuclear reaction and radioactive contamination are excluded from most insurance contracts and are usually covered under policies issued by pools created for this purpose. See also Mutual Atomic Energy Pool.
Radius of Operation. Used to determine rates for automobiles owned by a business. Beyond a certain number of miles in radius (e.g., 50, the rate is increase).
Railroad Protective Liability. Liability coverage written for a railroad on behalf of those who are conducting operations on or adjacent to railroad property.
Railroad Retirement. A system that provides retirement and other benefits, including eligibility for Medicare, for railroad workers.
Railroad Sidetrack Agreement. See Sidetrack Agreement.
Railroad Subrogation Waiver Clause. A provision in a property insurance contract that says the contract shall be valid even though the insured has an agreement with the railroad waiving subrogation against the railroad. Usually used in connection with a railroad sidetrack agreement.
Railroad Travel Policy. Accident insurance sold in railroad stations by ticket agents or by vending machines. See also Travel Accident Insurance.
Rain Insurance. Protection against losses caused by cancellation of an outdoor event due to rain. The policy usually covers loss of income. The rain, hail, snow or sleet usually must exceed a certain amount and must occur during a stated period of time, either before or during the event.
Rate. (1) The cost of a given unit of insurance. For example, in ordinary life insurance, it is the price of $1,000 of the face amount. In disability income insurance, it is usually the price per $10 or per $100 of monthly benefits. In property insurance, it is the rate per $100 of value to be insured. The premium, then, is the rate multiplied by the number of units of insurance purchased. (2) The percent or factor applied to the ceding company’s subject premium to produce the reinsurance premium or the percent applied to the reinsurer’s premium to produce the commission. See also Premium.
Rate Card. A card issued by an insurer giving rates for various coverages. It is carried by an agent or sales representative for quotation purposes.
Rate Discrimination. The use of different rates for insureds or risks of the same class and general characteristics. Rate discrimination is prohibited by all state insurance laws.
Rate Manual. A manual containing rates for various coverages, information and instructions for field underwriting, insurer’s rules for the guidance of agents, and, in the case of life insurance rate manuals, cash amount forfeiture values and dividend scales (if any).
Rate of Natural Increase (or Decrease). The birth rate minus the death rate. If there were no migration, this would equal the rate of population increase (or decrease).
Rated. Coverages issued at a higher rate than standard because of impairment of the insured. Usually used as an adjective in such expressions as “rated risk,” “rated policy” and “rated up.”
Rated Up. See Rated.
Rating Bureau. A private organization that classifies and promulgates manual rates and in some cases compiles data and measures the hazards of individual risks in terms of rates in geographic areas, the latter being true especially in connection with property insurance.
Rating Class. The rate class into which a risk has been placed. See also Class.
Rating Process. The steps used to determine a premium rate for a particular group based on the amount of risk that group presents. Items that generally go into the rating process include age, sex, type of industry, benefits and administrative costs.
Rating, Experience. See Experience Rating.
Rating, Merit. See Merit Rating.
Rating, Retrospective. See Retrospective Rating.
Rating, Schedule. See Schedule Rating Plan.
Rating. Within the insurance industry, professionals refer to pricing insurance coverage as rating. A rate is the cost for a unit of insurance. See also Base Rate.
Ratio Test. A coverage test for a qualified plan in which a percentage of lower paid employees benefiting from the plan must equal 70 percent of the higher paid employees from the plan.
Readjustment Income. (1) The income needed after the death or disability of a wage earner to allow the family time to adjust to a new, lower standard of spending. (2) The insurance coverage that provides readjustment income.
Realty. Real property such as land, buildings, mineral rights, etc., as opposed to personalty, such as movable personal property items.
Reasonable and Customary Charges. The charge for medical services that refers to the amount approved by the Medicare carrier for payment. Customary charges are those which are most often made by a provider for services rendered in that particular area.
Reassured. The company that purchases reinsurance. See Ceding Company.
Rebate. A portion of the agent’s commission returned to an insured or anything else of value given an insured as an inducement to buy. The payment of policy dividends, retroactive rate adjustments and reduced premiums that reflect the savings of direct payment to an agent or home office are not usually considered rebates. In most cases, rebates are illegal, both for the agent or insurer to give and for the insured to receive.
Recapture of Products. See Product Recall Insurance.
Recapture. The action of a ceding company taking back from a reinsurer insurance previously ceded.
Recidivism. How often a patient returns to an inpatient hospital status for the same reason.
Recipient. Anyone designated by Medicaid as eligible to receive benefits.
Recipient Location. A location that accepts the insured’s products or services. One type of dependent property for which business income coverage may be written.
Reciprocal Insurance Exchange. An unincorporated group of individuals, called subscribers, who mutually insure one another, each separately assuming his or her share of each risk. Its chief administrator is an attorney in fact.
Reciprocity. A system of placing reinsurance on a reciprocal basis so that a ceding company will give a share of its reinsurance to a reinsurer who is able to offer reinsurance in return.
Recording Agent. A policywriting agent in the property insurance business.
Recruiting. The hiring of insurance agents, or the process of looking for, interviewing and hiring agents. It is also the process of locating and hiring any type of employee.
Recurrent Disability. Disability resulting from the same or a related cause as a prior disability. In a disability income policy, it is similar to a relapse provision. If an insured suffers a relapse (a disability that is related to a prior disability) and if this relapse occurs within six months of return to work, then the second disability is considered a continuation of the initial disability. This works to the insured’s advantage, because the elimination period does not have to be satisfied a second time.
Recurring Clause. A health insurance provision defining the duration of a period of time during which the recurrence of a condition is considered a continuation of a prior period of disability or confinement. Also known as a relapse provision.
Red-Lining. Discriminating unfairly against a risk solely because of its location (e.g., refusing to insure a risk because the building is located in a depressed area or location). Also called blackout areas. This practice penalizes people who live in high-crime and high-accident areas.
Reduced Paid-Up Insurance. A form of insurance available as a nonforfeiture option. It provides that the cash value of the policy be used as a single premium to purchase paid-up insurance in whatever amount the cash value will provide, which will be less than the original face amount in most cases. See also Nonforfeiture Values.
Reduction of Risk. Reducing the probability or severity of a possible loss (e.g., installing alarms and sprinkler systems to reduce the risk of fire loss to a building). See also Risk Management.
Reduction. A decrease in the benefits in an insurance policy because of a specified condition (e.g., benefits may be reduced because a disability is caused by a specific condition).
Referral. Occurs when a physician or other health plan provider receives permission to consult another physician or hospital.
Referral Provider. The person or provider to whom a participating provider has referred a member of the plan.
Reformation. Rewriting an insurance policy to add an omitted coverage retroactively. It’s an unusual measure, most often happening by court order after a lawsuit.
Refund Annuity. A form of annuity that provides for a cash or installment refund to the beneficiary if the annuitant dies before having drawn benefits equal to the total consideration that he paid on the policy.
Refund Life Annuity. An annuity paying installments as long as the insured lives and installments after death to the beneficiary until the amount paid equals the principle sum of insurance.
Regional Office. A suboffice of a home office that is equipped to handle all lines of business in a particular territory or region. Some companies use the term branch office.
Register. A record of all policies charged to a debit account.
Registered Mail Insurance. Coverage for loss of money and securities sent through the post office by registered mail.
Registered Nurse (RN). A licensed professional with a four-year nursing degree that provides all levels of nursing care including the administration of medication.
Registered Representative. A person who has met the qualifications set by law or regulation to sell securities to the public.
Registered Tonnage. Warships: The weight or displacement. Commercial vessels: The cubic capacity of enclosed space. One ton occupies 100 cubic feet.
Regular Stock Option (RSO) Plan. An executive stock option plan whereby key executives have the right to purchase company stock at a predetermined price. When the option is exercised it is taxable as compensation to the executive.
Regulatory Information Retrieval Service (RIRS). A database developed by the National Association of Insurance Commissioners in conjunction with state insurance departments that lists regulatory actions such as suspensions, revocations, fines, penalties, cease and desist orders, consent orders, etc., against insurance firms and individuals.
Rehabilitation Benefits. Physical and/or vocational rehabilitation benefits provided to an injured person following a work-related injury, and intended to restore the person to a point where gainful employment is possible.
Rehabilitation Clause. Any clause in a health insurance policy, particularly a disability income policy, that is intended to assist the disabled policyholder in vocational rehabilitation.
Rehabilitation of Insurer. Action undertaken by a state insurance department to restore an impaired or insolvent insurer to sound financial standing. Contrast with Liquidation of Insurer.
Rehearing. A second hearing by a court. Its purpose is to call the court’s attention to an error or omission in the court’s first consideration of the claim.
Reimbursement. Payment of an amount of money upon the occurrence of a loss covered by the policy.
Reinstatement. (1) Restoration of a lapsed policy. (2) Restoration of the original amount of a type of policy that reduces the principal amount by the amount of claims. (3) Putting back into effect a catastrophe reinsurance coverage that has been reduced by the payment of a reinsurance loss as the result of one catastrophe. This is usually effected by the payment of a reinstatement premium.
Reinstatement Endorsement. If an insured suspends insurance for any reason, he or she must notify the insurance company when he or she wants coverage to be restored. In most cases, the insurance company will then calculate any refund due and restore coverage by issuing a reinstatement endorsement.
Reinsurance. Insurance that involves acceptance by an insurer, called the reinsurer, of all or a part of the risk of loss covered by another insurer, called the ceding company. It is a way for an insurer to avoid having to pay for large or catastrophic losses.
Reinsurance Assumed. (1) See Cession. (2) The premium for an assumption of reinsurance.
Reinsurance, Automatic. See Automatic Reinsurance.
Reinsurance Broker. An individual or organization that places reinsurance for the ceding companies who are its customers.
Reinsurance Ceded. See Cession.
Reinsurance Credit. Credit taken on its annual statement by a ceding company for reinsurance premiums ceded and losses recoverable.
Reinsurance, Excess. See Excess of Loss Reinsurance.
Reinsurance, Facultative. See Facultative Reinsurance.
Reinsurance Premium. The consideration paid by a ceding company to a reinsurer for the reinsurance afforded by the reinsurer.
Reinsurance, Pooling. See Pooling.
Reinsurance, Quota Share. See Quota Share Reinsurance.
Reinsurance, Spread Loss. See Spread Loss Reinsurance.
Reinsurance, Stop Loss. See Stop Loss Reinsurance.
Reinsurance, Surplus. See Surplus Reinsurance.
Reinsurer. An insurer that assumes all or a part of the insurance or reinsurance written by another insurer.
Rejection. (1) Refusal by an insurer to underwrite a risk. (2) Refusal or denial of a claim by an insurer.
Relation of Earnings to Insurance. A health insurance provision used in non-cancelable and guaranteed renewable contracts that states if when a disability begins the insured’s total disability income exceeds his or her earned income, the benefits will be reduced proportionally and premiums for any excess coverage will be refunded. Also known as the average earnings clause, this prevents overinsurance and allows the company to reduce disability benefits based on a person’s current average monthly income.
Relative Value Schedule. A surgical schedule that compares the value of one surgical procedure to another and establishes the surgical fee to be paid.
Relative Value Unit. Sometimes used instead of dollar amounts in a surgical schedule, this number is multiplied by a conversion factor to arrive at the surgical benefit to be paid.
Release. (1) To give up, abandon and discharge a claim or an enforceable right of one person against another. (2) The name of the instrument evidencing such an act (e.g., if a claim representative obtains a release from a claimant, this means that the claimant has given up all further rights against the insurance company).
Remainder. The amount of a risk to be reinsured after deducting the amount the ceding company is keeping in its own account.
Remand. Usually used in appellate courts whereby the appellate court refers the case back to the original court for further action.
Remittitur. Process by which an excessive jury verdict is reduced by the court. Contrast with Additur.
Removal. Removing property to protect it from loss. Most personal and commercial property forms cover damage to property at another location when it has been removed from the premises to protect it from loss by a covered peril insured.
Renewable Term. Term insurance that may be renewed for another term without evidence of insurability.
Renewal. (1) The reestablishment of the in-force status of a policy, the term of which has expired or will expire unless it is renewed. (2) The automatic reestablishment of in-force status effected by the payment of another premium.
Renewal Certificate. A short-form certificate used to renew a policy. It refers to the original policy, keeping all of its provisions, but does not restate all of its insuring agreements, exclusions and conditions.
Renewal Commission. A commission paid on premiums subsequent to the first-year commission.
Renewals. (1) The premiums paid for renewed policies. (2) The commissions paid on renewal premiums.
Rent Insurance. See Rental Value Insurance.
Rental Car Replacement. Coverage for a rental car if an insured’s vehicle is being repaired because of an accident. Also called Rental Reimbursement Coverage.
Rental Reimbursement Coverage. See Rental Car Replacement.
Rental Value Insurance. Property insurance that provides indemnity for: 1) the loss of the rental value of property when the owner or tenant is deprived of the use of the property because it has been damaged by an insured peril; or 2) the loss by the owner-landlord of the rent that would have been payable by a tenant of the property, under the terms of the lease or by statute, when he is relieved of liability for the payment of rent during a period of untenantability due to an insured peril.
Renters Insurance. Insurance for renters to insure their property against loss by covered perils.
Replacement. A new policy written to take the place of one currently in force.
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. Contrast with Actual Cash Value.
Replacement Cost Insurance. Insurance that provides that loss will be paid on a replacement cost basis. If there is a covered loss to the insured dwelling, the insurance company will pay to repair or replace the property with like construction, but only up to the policy’s limit of liability. The recovery will be reduced by any deductible the insured has agreed to pay. To be eligible for replacement cost coverage, the dwelling must be insured for at least 80 percent of its replacement cost at the time of loss. This coverage applies only to dwelling buildings and does not apply to personal property. See also Replacement Cost.
Replacement Value. To replace new up to the limits of the policy, less any deductible, with no reduction in the amount due to depreciation (e.g., in most cases, the older a car, the less insurance an insured needs. This is because the replacement value diminishes with age).
Reporting Form. A periodic report to an insurer by an insured that covers the fluctuating values of stocks of merchandise, furniture and fixtures and improvements and betterments. Premiums are adjusted annually, based on the average values insured during the policy period. An insured with fluctuating inventories might use this form.
Representation. A statement made on an application for insurance that the applicant represents as correct to the best of his or her knowledge and belief. See also Warranty.
Representative. An agent or sales representative.
Res Ipsa Loquitur. Literally translated, this means “the fact speaks for itself.” Under this doctrine, a person is presumed to be negligent if the circumstances of injury are under his complete and exclusive c ontrol, and it can be shown that the injury or damage could only have occurred if the individual were negligent.
Rescission. (1) Repudiation of a contract. A party whose consent to a contract was induced by fraud, misrepresentation or duress may repudiate it. A contract may also be repudiated for failure to perform a duty. (2) The termination of an insurance contract by the insurer when material misrepresentation has occurred.
Reserve. (1) An amount representing actual or potential liabilities kept by an insurer to cover debts to policyholders. (2) An amount allocated for a special purpose. Note that a reserve is usually a liability and not an extra fund. On occasion a reserve may be an asset, such as a reserve for taxes not yet due.
Reserve, Unearned Premium. See Unearned Premium Reserve.
Residence Employee (or Domestic). An employee of any insured who performs full- or part-time services related to the maintenance or use of the residence premises, including household or domestic services; or someone who performs similar duties—not related to a business—elsewhere.
Residence Premises. In homeowners insurance, the dwelling, other structures and grounds, or that part of any other building where the named insured lives and which is identified as the residence premises in the policy. In the case of a two-, three- or four-family dwelling, the named insured must reside in at least one of the family units.
Resident Agent. An agent domiciled in the state in which he writes insurance.
Residual Disability. That form of disability which becomes defined as partial disability when an insured has returned to work immediately following a period of total disability.
Residual Disability Income Benefits. A clause that provides for benefits to be paid when the insured can do some but not all of his or her normal duties (e.g., if the insured suffers a disability that causes him or her to lose a third of his or her earning power, the residual disability clause would provide one-third of the benefit that the policy would provide for total disability).
Residual Markets. Various insurance markets outside of the normal agency-company marketing system. Residual markets include government insurance programs, specialty pools (aviation risks and nuclear risks) and shared market mechanisms (assigned risk plans).
Resource Based Relative Value Scale (RBRVS). A classification system that determines how physicians will be compensated for services provided under Medicare benefits.
Respite Care. Normally associated with hospice care, this is a benefit to family members of a patient whereby the family is provided with a break or respite from caring for the patient. The patient is confined to a nursing home for needed care for a short period of time.
Respondeat Superior. Under certain circumstances, a principal is responsible for the wrongful acts of its agents or an employer for those of its employees. Under this doctrine, if an employee negligently injures a customer while in the course of employment, the employer could be held liable.
Restoration of Benefits. A provision in many major medical plans that restores a person’s lifetime maximum benefit amount in small increments after a claim has been paid. Usually, only a small amount ($1,000 to $3,000) may be restored annually.
Retained Limit. (1) The total applicable limits of all required underlying policies and any other insurance available to an insured. (2) The self-insured retention if the loss is not covered by any underlying insurance. See Self-Insured Retention.
Retainer Clause. A clause stating how much a company placing reinsurance intends to retain.
Retaliatory Law. A state law that says that agents from another state applying for a license to operate in the state in question will be accorded the same treatment as agents residing in the retaliatory state are given in the foreign state.
Retention. (1) The portion of the premium that is used by the insurance company for administrative costs. (2) The amount of liability retained by the ceding company and not reinsured. Contrast with Cession.
Retention of Risk. Assuming all or part of a risk instead of purchasing insurance or otherwise transferring the risk. See also Risk Management.
Retirement Annuity. An annuity contract that is entered into before a selected retirement age with the consideration paid in installments until that age is reached. It is a form of deferred annuity.
Retirement Income Policy. An adaptation of an endowment at a selected retirement age in which the annuity benefit is a percentage of the face amount of life insurance in force prior to retirement age, usually 10 percent (e.g., for each $1000 of insurance a $10 per month annuity installment is payable). Under this policy, the cash value will exceed the face amount in the later policy years, and if death occurs before the selected retirement age, the death benefit would be the face amount or the cash value, whichever is greater.
Retroactive Conversion. The conversion of a term life insurance policy to a cash value form as of the original date of issue of the term policy, rather than as of the time the conversion is made. In other words, the cash value policy will have already attained the age of the former term policy.
Retroactive Date. Date on a “claims made” liability policy that triggers the beginning period of insurance coverage. A retroactive date is not required. If one is shown on the policy, any claim made during the policy period will not be covered if the loss occurred before the retroactive date.
Retrocession. The transaction whereby a reinsurer cedes all or part of the reinsurance it has assumed to another reinsurer.
Retrocessionaire. The reinsurer of a reinsurer.
Retrospective Premium. Final premium in a retrospective rating plan. See Retrospective Rating.
Retrospective Rate Derivation (RETRO). A rating system whereby the employer becomes responsible for a portion of the group’s health care costs. If the costs are less than the portion the employer agrees to assume, the insurance company may be required to refund a portion of the premium.
Retrospective Rating. A plan for which the final premium is not determined until the end of the coverage period and is based on the insured’s own loss experience for that same period. It is subject to a maximum and minimum. It is used in various types of insurance, especially workers’ compensation and liability, and is usually elected by only very large insureds. See also Basic Premium.
Return Commission. A commission paid back by the agent if a policy is canceled before its normal expiration date. This occurs when the commission was based on the full annual premium, and if the policy is canceled before it is earned, a pro rata portion of the commission must be returned.
Return of Cash Value. A provision or rider on a life insurance policy that states that if death occurs during a certain period of years (often 20), the policy will pay an amount, in addition to the face amount, that is equal to the cash value of the policy as of the date of death. It is a form of increasing term insurance and is used as a sales tool.
Return Premium. (1) A rider on a life insurance policy providing that, in the event of the death of the insured within a specified period of time, the policy will pay, in addition to the face amount, an amount equal to the sum of all premiums paid to date. This is a form of increasing term insurance and is used as a sales tool. (2) A rider or provision in a health insurance policy agreeing to pay a benefit equal to the sum of all the premiums paid, minus claims paid, if claims over a stated period of time do not exceed a fixed percentage of the premiums paid. (3) A portion of the premium returned to a policyowner as a result of cancellation, rate adjustment or a calculation that an advance premium was in excess of the actual premium. See also Pro Rata Rate and Short Rate Premium.
Revenue. See Premium.
Reversionary Annuity (or Insurance). A contract providing annuity benefits only if the annuitant is living upon the death of the insured, such as the wife upon the death of her husband. Although labeled an annuity, this contract is actually a form of life insurance on the life of the person whose death will initiate the benefit.
Revocable Beneficiary. The beneficiary in a life insurance policy in which the owner reserves the right to revoke or change the beneficiary. See Irrevocable Beneficiary.
Revocable Trust. A trust instrument in which the grantor maintains control over the trust assets and can revoke the trust. Contrast with Irrevocable Trust.
RHU. Registered Health Underwriter.
Rider. An attachment to a policy that modifies its conditions by expanding or restricting benefits or excluding certain conditions from coverage. See Waiver and Endorsement.
RIMS. See Risk and Insurance Management Society, Inc.
Riot. A peril covered by the extended coverage (EC) or by direct reference in some policies. It is violent action by two or more people. State laws vary as to how many people it takes to constitute a riot.
Risk. (1) Uncertainty as to the outcome of an event when two or more possibilities exist. See also Pure Risk and Speculative Risk. (2) A person or thing insured. 3) The physical units of property insured or the physical units of property at risk. Contrast with Hazard and Peril.
Risk Analysis. The process of determining what benefits to offer and premium to charge a particular group.
Risk and Insurance Management Society, Inc. (RIMS). An association of risk managers and insurance buyers, organized for educational purposes to promote the risk management concept. RIMS fosters closer relationships among buyers, makes the insurance needs of businesses known and promotes better relations among all interested parties within the insurance industry.
Risk Appraiser. An employee of a life insurer who screens the applications submitted. He may accept or reject an applicant, or propose an alternative policy or premium.
Risk Control Insurance. See Reinsurance.
Risk Management. Management of the pure risks to which a company might be subject. It involves analyzing all exposures to the possibility of loss and determining how to handle these exposures through such practices as avoiding the risk, reducing the risk, retaining the risk or transferring the risk, usually by insurance.
Risk Pool. See Pool.
Risk Premium Insurance. See Yearly Renewable Term.
Risk Profile. The risk an insured poses to an insurance company. Some elements of this profile are based on demographic factors. Other elements are based on lifestyle needs. Age, sex and marital status classifications are what insurers refer to as primary factors figured into premium formulas.
Risk Retention Groups. Liability insurance companies owned by their policyholders. Membership is limited to people in the same business or activity that exposes them to similar liability risks. The purpose is to assume and spread liability exposure to group members and to provide an alternative risk financing mechanism for liability.
Risk, Degree of. See Degree of Risk.
River Marine. The part of ocean marine insurance that addresses itself to the insuring of craft on inland waterways.
Robbery. The felonious taking, either by force or fear of force, of the personal property of another.
Robbery and Safe Burglary Coverage Form. There are two variations of this commercial crime coverage. One (Form D) covers property other than money and securities against inside or outside loss or damage by robbery, and against inside loss or damage by safe burglary. The other (Form Q) covers money and securities against loss by robbery or safe burglary inside the premises, and loss by robbery outside the premises.
Rollover Contribution. A contribution consisting of a distribution from a qualified plan that is deposited (rolled) in another qualified plan to postpone current taxation of the distribution.
Rule Against Perpetuities. A rule that says a trust is not valid unless individual beneficiaries become vested in the trust property within 21 years.
Running Down Clause. An additional coverage that can be added to an ocean marine hull policy to provide protection against liability for damage to another ship caused by collision.
Runoff. A termination provision in a reinsurance contract stipulating that the reinsurer shall remain liable for loss under each reinsured policy in force until its expiration date.