Unearned Premium Reserve
Fund that contains the portion of the premium that has been paid in advance for insurance that has not yet been provided. For example, if a business pays an annual premium of $1000 on January 1, the money is not earned by the insurer until the insurance coverage has been provided. On July 1, $500 would have been earned and $500 would remain as unearned premium, belonging to the policyholder. If either party cancels the contract, the insurer must have the unearned premium ready to refund. For this reason, insurance regulators require that insurers maintain an unearned premium reserve so that, in the event an insurer must be liquidated, there is enough money to pay claims and refund the unearned premium. Because computations for individual policies would be cumbersome, regulators have devised formulas for figuring unearned premium reserves.
Popular Insurance Terms
Subtraction of a number of years from a standard table of life insurance rates under the assumption that a particular group-women-outlive men and presumably will be paying premiums for a ...
In ocean marine insurance, provision stipulating that upon the collision of two or more ships, when all ships are at fault, all owners and shippers having monetary interests in the voyage ...
Insurance company that does not utilize the rates and policies of a rating bureau. ...
Branch of knowledge dealing with the mathematics of insurance, including probabilities. It is used in ensuring that risks are carefully evaluated, that adequate premiums are charged for ...
Summary certificate of benefits issued to an employee in lieu of a policy. The master contract remains with the employer. For example, in group life insurance, an employee receives only a ...
Presence of other contract (s) covering the same conditions. When more than one policy covers the exposure, each policy will pay an equal share of the loss. ...
Recording and presentation of financial statements, such as the annual statement, by the insurance company. Financial reporting statements are used by the State Insurance Commissioner in ...
Payment of that portion of the annual premium by the employee necessary to cover the PS-58 cost for that given year. Any unpaid premium balance for that particular year is paid by the ...
Specific powers that a prospective insured believes the insurance company has granted to its agent. For example, if the insurance company has furnished the agent a rate book, application ...
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