LOMA 290 key terms

The day-to-day functions that keep an insurer running - underwriting, claims, marketing, finance, actuarial, and customer service - coordinated so the company can meet its promises to policyowners profitably.

A distinct department or grouping of related tasks within an insurer, such as claims or underwriting, each with its own responsibilities, controls, and reporting lines.

A category of insurance products grouped by type of coverage or customer, such as individual life, group life, or annuities, used for organizing operations, pricing, and reporting.

A family of related insurance products sold under a common design or brand, managed together for development, pricing, distribution, and profitability analysis.

The cross-functional process of designing a new insurance product - identifying a need, setting features, pricing, testing, and obtaining regulatory approval - before launch.

The process of evaluating an applicant's risk characteristics against the insurer's standards and deciding whether to accept, decline, or modify the coverage and its terms.

Grouping applicants with similar expected mortality or morbidity into classes so each class is charged a premium that reflects its anticipated cost of claims.

An applicant whose health, habits, or other characteristics suggest materially lower-than-average expected claims, qualifying for a lower premium than standard classes.

An applicant whose expected claims are higher than average because of health or lifestyle factors, accepted only with an extra premium, exclusion, or other modification.

Written rules that tell underwriters which risks to accept, decline, or rate up, including limits, evidence requirements, and referral thresholds for higher authority.

The dollar limits and risk types a given underwriter is empowered to approve without referral to a more senior underwriter or committee.

Preliminary risk screening performed by the agent or producer at the point of sale, gathering accurate information and flagging concerns before formal home-office review.

The operational function that receives claim notices, verifies coverage and documentation, determines the payable amount, and issues payment or denial.

The employee who investigates a claim, reviews policy provisions and evidence, and recommends or makes the decision on payment.

The conclusion of a claim in which the insurer pays the benefit due, pays a negotiated amount, or denies the claim with stated reasons.

A limited time after policy issue, commonly two years, during which the insurer may rescind coverage or deny a claim for material misrepresentation on the application.

A false or incomplete statement on an application that would have changed the insurer's decision to issue coverage or the terms it offered.

Insurance bought by an insurer to transfer part of its risk to another insurer, protecting surplus and enabling it to accept larger or more concentrated risks.

The maximum amount of risk an insurer keeps on a single life or policy before passing the excess to a reinsurer.

The primary insurer that transfers, or cedes, some of its risk and premium to a reinsurer under a reinsurance agreement.

The function that calculates premiums, reserves, and product profitability, and that monitors mortality, morbidity, and persistency experience.

The amount a policyowner pays, usually periodically, in exchange for the insurer's promise to provide the stated benefits.

A liability the insurer records for benefits it expects to pay in the future on policies already in force, based on actuarial assumptions.

The excess of an insurer's assets over its liabilities, serving as a financial cushion against unexpected losses and supporting growth in business.

An insurer's ability to meet its obligations to policyowners as they come due, measured by the adequacy of assets and surplus relative to liabilities and risk.

A regulatory framework that sets minimum capital requirements according to the amount and types of risk an insurer assumes, rather than size alone.

The function responsible for identifying customer needs, positioning products, advertising, and supporting distribution so products reach suitable buyers.

A licensed person or firm that sells the insurer's products, such as an agent or broker, and often performs field underwriting and customer service.

The channel through which an insurer delivers products to customers, such as career agents, independent brokers, banks, or direct online sales.

The ongoing processing of in-force policies: issuing contracts, recording changes, billing, collecting premiums, and maintaining policyowner records.

The function that handles policyowner inquiries, requests, and complaints, aiming to resolve them accurately and promptly while preserving the relationship.

The function that builds and maintains the systems, databases, and security controls supporting underwriting, claims, billing, and reporting.

The policies and controls that protect confidential policyowner and health information from unauthorized access, loss, or misuse.

The function that monitors whether the insurer and its producers follow laws, regulations, and internal policies, and that corrects identified deficiencies.

The way an insurer and its producers behave toward customers in sales, servicing, and claims, examined by regulators for unfair or deceptive practices.

The submission of policy forms and rates to a state insurance regulator for review, and often approval, before the product may be sold.

A cost of running the business that is not a benefit payment, such as salaries, rent, and technology, recovered through expense loading in premiums.

An independent review of records, controls, or procedures to verify accuracy and compliance, performed internally or by outside examiners.