Insurance Commission Licensure Exam - Non-Life key terms

A financial or legal stake in the subject matter such that the insured benefits from its preservation and suffers measurable loss from its destruction; required at inception and, for property, at the time of loss.

The rule that a property claim restores the insured to roughly the pre-loss financial position, no better and no worse, capping recovery at the actual loss or sum insured.

The mutual duty of insured and insurer to disclose all material facts honestly, so that neither party relies on concealment or misrepresentation when the contract is formed and performed.

Any circumstance that would influence a prudent underwriter's decision to accept the risk, set the premium, or impose terms; failure to disclose it may let the insurer avoid the policy.

The dominant, effective, and efficient cause that sets in motion an unbroken chain of events producing the loss, without intervention of a new independent cause.

The insurer's right, after paying a claim, to step into the insured's shoes and recover the loss from the negligent third party, preventing double recovery by the insured.

The principle that where two or more policies cover the same loss on the same interest, each insurer pays its rateable share, so the insured never collects more than the loss.

The increased likelihood of loss arising from the insured's own attitude or conduct, such as carelessness or intent to claim, which underwriters assess separately from physical hazards.

The contract-formation sequence in which the applicant's proposal is the offer and the insurer's issuance of a policy, or its unqualified acceptance, completes the agreement.

A policy term that the insured promises to be exactly true or to do; breach traditionally allows the insurer to avoid liability regardless of whether the breach caused the loss.

A statement of fact made by the applicant during negotiations that is believed true; if untrue and material, the insurer may rescind the policy from inception.

A policy requirement the insured must satisfy before the insurer's duty to pay arises, such as giving prompt notice or submitting a proof of loss.

A provision that removes specified perils, property, or circumstances from cover, shifting that risk back to the insured and defining the boundary of the insurer's promise.

A contract that is valid until one party elects to rescind it, typically because of misrepresentation, non-disclosure, or fraud; the insurer may return premium and deny claims.

The failure to reveal a material fact to the insurer, whether innocent or deliberate, which may entitle the insurer to avoid the policy or reduce a claim.

A property contract covering loss or damage from fire, lightning, and limited allied perils, usually subject to average, sum-insured limits, and specified exclusions.

Cover for goods in transit by sea and often by air or land, written on institute cargo clauses that define perils, duration, and exclusions for the voyage.

A vehicle contract combining third-party liability, often compulsory, with optional own-damage, theft, and personal accident extensions, rated by vehicle and driver factors.

Supplementary property covers sold alongside fire insurance, such as lightning, explosion, windstorm, riot, and water damage, each with its own terms and deductibles.

A policy covering every cause of loss except those expressly excluded, in contrast to named-peril cover where the insured must prove a listed peril caused the damage.

Cover for the insured's legal obligation to compensate others for bodily injury or property damage caused by the insured's negligence, distinct from first-party property cover.

Cover paying fixed benefits for accidental death, disability, or medical expenses, based on a benefit schedule rather than proof of actual financial loss.

The underwriter's process of deciding which risks to accept, decline, or modify, using information about the subject matter, its exposure, and the applicant's history.

Setting premium by grouping risks with similar expected loss characteristics, such as vehicle type or occupancy, and applying a rate per unit of exposure.

Adjusting a risk's premium up or down based on its own past loss record relative to the class average, rewarding favorable experience and penalizing poor experience.

Insurance bought by an insurer to transfer part of its assumed risk to a reinsurer, protecting solvency and capacity; it does not change the original insured's rights.

The portion of each risk or portfolio that an insurer keeps for its own account after ceding the excess to reinsurers, often set by its capital and solvency limits.

The insured's prompt notification to the insurer that a loss has occurred, a condition precedent that starts the claims process and lets the insurer investigate while evidence is fresh.

A formal sworn statement by the insured detailing the date, cause, and amount of loss, supported by documents, which the insurer uses to verify and quantify the claim.

An independent or staff professional who investigates a claim, verifies coverage and cause, quantifies the damage, and recommends a settlement figure to the insurer.

Remaining property that retains value after a loss; the insurer may take it over and sell it to offset the claim, reducing the net amount paid to the insured.

The indemnity measure equal to replacement cost minus depreciation for age and wear, reflecting what the damaged property was worth immediately before the loss.

The government agency that regulates insurance in the Philippines, issuing licenses to insurers, agents, and brokers and enforcing the Insurance Code through rules and market-conduct supervision.

The statute governing insurance contracts, licensing, solvency, and claims practice, interpreted by the Insurance Commission and the courts in resolving coverage disputes.

The Commission's authorization for an insurer, agent, broker, or adjuster to transact insurance business, renewable and revocable for violations or unfit conduct.

The rules and supervision governing how insurers and intermediaries treat customers, covering disclosure, fair dealing, claims handling, and prohibited sales practices.

An intermediary who represents the buyer rather than the insurer, placing coverage with insurers and owing the client duties of disclosure, care, and loyalty.

The excess of an insurer's admissible assets over its liabilities that must stay above a required minimum, serving as a buffer against unexpected claims and investment losses.

A liability recognized for expected future obligations, including unearned premium for cover not yet provided and outstanding or incurred-but-not-reported claims.

A tax levied on gross premiums written or received by insurers, plus local taxes and fees, collected and remitted under rules set by the tax authority and the Commission.