1.
Advisory organizations: Independent corporations that work with and on behalf of insurers that purchase or subscribe to their services. Services include prospective loss costs and standard contract forms
2.
Alien insurer: An insurer domiciled outside the U.S.
3.
Domestic insurer: An insurer doing business in its home state.
4.
File-and-use law: State law under which insurance rates must be filed with the state insurance department but can then be used immediately
5.
Flex rating law: State law under which prior approval is required only if the new rates exceed a certain percentage above (and sometimes below) the rates previously filled
6.
Foreign insurer: An U.S. insurer doing business in a state that is not its home state.
7.
Guaranty funds: State-established funds that provide for payment of unpaid claims of insolvent insurers licensed in that state. Although guaranty funds do not prevent insurer insolvency, they mitigate its effects.
8.
Mandatory rate law: State law under which insurance rates are set by a state agency or rating bureau and all licensed insurers are required to use those rates.
9.
Model law: A draft bill-the suggested wording of a new law-for consideration by state legislatures. Any state may choose to adopt the model bill or adopt it with modifications.
10.
Model regulation: A draft regulation that may be implemented by a state insurance department if the model law is passed.
11.
National Association of Insurance Commissioners: An association consisting of insurance commissioners of each U.S. state, DC and US territories and possessions that coordinates regulatory activities among the various departments.
12.
Open competition system: A system under which rates do not have to be filed with the state insurance department
13.
Prior approval law: State law under which insurance rates must be approved by the state insurance department before they can be used
14.
Rebating: The practice of giving a portion of the producer's commission or some other financial advantage to an individual as an inducement to purchase the policy
15.
Surplus lines law: State laws that permit producers with a surplus lines license to write business for an "acceptable" nonadmitted insurer when protection from admitted insurers is not available.
16.
Underwriting cycle: A cyclical pattern of insurance pricing in which a soft market (low rates, relaxed underwriting, and underwriting losses) is eventually followed by a hard market (high rates, restrictive underwriting, and underground gains) before the pattern again repeats itself.
17.
Unfair trade practices acts: State laws that prohibit an insurer from using unfair methods of competition and engaging in unfair acts or practices as defined in the acts
18.
Use-and-file law: State law under which insurance rates can be put into effect with filing information subsequently submitted and subject to regulatory review
