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
Insurance policy for which the required premium has been paid. ...
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In life insurance, the exchange of a series of installment payments, as the result of an installment settlement, for a lump sum distribution. ...
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States that preclude the placement of surplus lines with particular insurance companies. ...
Scheme to recapture excess pension assets by splitting a qualified plan in two, and terminating one of them. In the mid-1980s, many pension plans became "overfunded" because their ...
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