Topic: InsureTerms

Enstar pulled the trigger faster than Annie Oakley‎

Both Rhode Island and Oklahoma have enacted insurance business transfer acts, which allow insurers to transfer and novate books or portfolios of business to insurers domiciled in the respective States.  Rhode Island’s Voluntary Restructuring of Solvent Insurers Act became effective on June 30, 2007, and is codified by the Rhode Island Department of Business (“DBR”) Regulation 68. 

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InsureTerms™/Terminology for the Consummate Insurance & Reinsurance Lawyer: “Surplus Note”

“Surplus Note” is a hybrid corporate finance instrument unique to insurance companies which constitutes surplus (equity) for insurance law and statutory accounting purposes yet generally constitutes debt for federal income tax purposes, which is similar to subordinated debt and sits above the stockholders, but below general creditors, of the issuing insurance company.

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InsureTerms™/Terminology for the Consummate Insurance & Reinsurance Lawyer: “Quota Share Reinsurance”

A form of reinsurance whereby the reinsurer accepts a stated percentage of each and every risk underwritten by the reinsured company within a defined category of business and within the underlying insurance contract parameters on a pro rata basis and is usually paid a pro rata portion of the applicable premium after agreed deductions.

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InsureTerms™/Terminology for the Consummate Insurance & Reinsurance Lawyer: “SAP”

Insurance statutory accounting principles which are codified in the National Association of Insurance Commissioners’ Accounting Practices & Procedures Manual, and sometimes by “permitted practices” of the state insurance department; the term is oftentimes used as an accounting reference for insurance company financial matters in a stock purchase agreement and managing general agency agreement.

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InsureTerms™/Terminology for the Consummate Insurance & Reinsurance Lawyer: “Audit Premium”

Any premium that is determined to be payable from (Audit Additional Premium) or to (Audit Return Premium) a policyholder as a result of a policy provision that permits the insurance company to base the ultimate premium to be charged for the policy on auditable criteria at the end of the policy’s term or over another specified measurement period.

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