Long-tail Liability
One where an injury or other harm takes time to become known and a claim may be separated from the circumstances that caused it by as many as 25 years or more. Some examples: exposure to asbestos, which sometimes results in a lung disease called asbestos; exposure to coal dust, which might cause black lung disease; or use of certain drugs that may cause cancer or birth defects. These long-tail liabilities became very expensive for many corporations in the 1970s and 1980s, also causing problems for insurers because it was unclear when the situation that gave rise to the claim happened and who should pay the claim. One theory, the MANIFESTATION/INJURY THEORY, states that the insurer is responsible whenever the disease is diagnosed. The other view, the OCCURRENCE/INJURY THEORY, states that the insurer must pay only when the person is injured.
Popular Insurance Terms
Model state law of the NAIC setting general standards for group life insurance contracts. It specifies which types of organizations can sponsor group life insurance plans and outlines the ...
State legislation that allows insurers to offer both property and casualty insurance. At one time, U.S. insurers sold only one type of insurance, a practice that gradually became written ...
Act in which a life insurance company is permitted to transfer the death benefit from the policy to the custodian of a minor beneficiary provided the beneficiary designation has ...
Same as term Convention Examination: audit of the convention blank (NAIC Statement Blank) every third year as to all of the financial activities of a company; company claim practices; and ...
Type of major medical deductible amount that acts as a corridor between benefits under a basic health insurance plan and benefits under a major medical insurance plan. After benefits are ...
Many different, unofficial, and voluntary nonlitigation processes employed by insurance companies to resolve contractual disputes with their insureds. Examples would include nonbinding ...
Date of issue of the policy. ...
Same as term: statement of opinion : ...
Number of individuals exposed to the risk of illness, sickness, and disease at each age, and the actual number of individuals who incurred an illness, sickness, and disease at each age. ...
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