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
Product or service that does more harm than good to society, or endangers life or health. Society would probably be better off without such a product or service. ...
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Endorsement to a fidelity bond or surety bond to cover losses that occurred after lapse of the discovery period of the previous bond. Coverage is limited to the amount provided by the ...
1945 federal legislation in which the Congress declared that the states may continue to regulate the insurance industry. Nevertheless, in recent years Congress has expanded the federal ...
In homeowners insurance, usually an 80% coinsurance requirement, which means the insured must carry insurance on the value of a home on a replacement cost basis of at least 80%. For ...
Termination of a contractual obligation for immediate performance. For example, under the homeowners insurance policy, if the insurer refuses to pay a claim, the insured (if not satisfied ...
Same as term Annual Policy: contract remaining in force for up to 12 months unless canceled earlier. After 12 months the policy can either be renewed or not renewed by the insurance company ...
Professional designation conferred by the American College. In addition to professional business experience in insurance planning and related areas, recipients must pass national ...
Type of accounting method, in life insurance, designed to match revenues and expenses of an insurer according to principles designed by the Financial Accounting Standards Board and the ...
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