Territorial Grouping Of Risks
Method of classifying risks to establish equitable rates. In many property and liability insurance lines, the location of an insured has a significant impact on the loss experience. For example, in automobile insurance the chance of a policy holder sustaining a loss is much greater in New York City than in rural Iowa. In lines like workers compensation, insurers may consider the attitude of the state courts and its impact on the cost of claims in that state. The insurer's task is to define a territorial grouping that has an exposure that is either smaller or greater than the standard, yet the group must be large enough to provide significant loss experience for rate making.
Popular Insurance Terms
Procedure in which a home office interviewer (who may or may not have underwriting experience) interviews applicants on the telephone. The questions asked the applicant are automated and ...
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Individual who works in the home office of an insurance company and performs the function of underwriting to determine if an applicant is insurable at standard rates, substandard rates, ...
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Annuity contract. If the annuitant dies before receiving income at least equal to the premiums paid, a beneficiary receives the difference in installments. If the annuitant lives after the ...
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