Definition of "Capacity"
Maximum that an insurance company can underwrite. The limits of coverage that a property and casualty company can underwrite are determined by its retained earnings and invested capital. reinsurance is a method of increasing the insurance company's capacity, in that a portion of the unearned premium reserve maintenance requirement can be relieved. Commissions earned are ceded, underwriting results are stabilized, and financing of the expansion of the insurer's capacity can take place.
Popular Insurance Terms
Same as term Export-Import Bank: partnership between an agency of the U.S. government and the Foreign Credit Insurance Association (50 commercial insurance companies, both stock and ...
Smallest acceptable premium for which an insurance company will write a policy. This minimum charge is necessary to cover fixed expenses in placing the policy on the books. ...
Commission that is paid based on how profitable a particular type of business proves to be that is written by an agent. ...
Statute that makes it illegal in most states for an agent to rebate (return) any portion of his commission as an inducement for an applicant to purchase insurance from him. ...
Analysis of uncertainty of financial loss. This classification can be according to whether a risk is fundamental, particular, pure, speculative, dynamic, or static. In life insurance the ...
Unexpected, unforeseen event not under the control of the insured that results in bodily injury. ...
Tort of wrongful physical confinement of an individual. This is not restricted to physical confinement but includes any unjustified limitation of another's freedom of movement. If an ...
Health insurance coverage offered by some states for medical expenses and loss of income from nonoccupational disability. The merits of federal health insurance have been debated for some ...
Principle of surplus distribution as the result of excess funds above the amount required to establish legal reserves. These excess funds are generated from three sources: mortality ...
Have a question or comment?
We're here to help.