Present value of future profits PVFP Intangible asset primarily arising from the purchase of life and health insurance companies or portfolios. Primary insurer cf. Priority Direct insurer's loss amount stipulated under non-proportional reinsurance treaties; if this amount is exceeded, the reinsurer becomes liable to pay. Probability level cf. Proportional reinsurance Reinsurance treaties on the basis of which shares in a risk or portfolio are reinsured under the relevant direct insurer's conditions.
Provision for unearned premiums also: unearned premium reserve Premium written in a financial year which is to be allocated to the following period on an accrual basis. Need even more definitions? Homophones, Homographs, and Homonyms The same, but different.
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Literally How to use a word that literally drives some pe By clicking sign up, you agree to receive emails from Insuranceopedia and agree to our Terms of Use and Privacy Policy. Unearned premiums are premiums that an insurance company receives before it provide coverage for a specific period. In other words, they constitute premiums a policyholder pays in advance.
Because the insurance company has not actually provided coverage for unearned premiums, they are refundable should the policy be canceled. The world of insurance can be complicated. Subscribe to the Insuranceopedia newsletter and stay in the know! Access expert content, industry term definitions and answers to your questions from knowledgeable insurance insiders.
The information may be of crit. When an insurance company enters into a reinsurance contract with another insurance company, then the same is called treaty reinsurance. Description: In the case of treaty reinsurance, the company that sells the insurance policies to another insurance company is called ceding company. Reinsurance frees up the capital of the ceding company and helps augment the solvency margin.
It also enables. First time default on premium payments by a policy holder is termed as First Unpaid Premium. Description: With each premium payment a receipt is issued which indicates the next due date of premium payment. If the premium is not paid, this date becomes the date of first unpaid premium. Embedded value is the sum of the net asset value and present value of future profits of a life insurance company.
Description: This measure considers future profits from existing business only, and ignores the possibility of introduction of new policies and hence profits from those are not taken into account. Indemnity means making compensation payments to one party by the other for the loss occurred.
Description: Indemnity is based on a mutual contract between two parties one insured and the other insurer where one promises the other to compensate for the loss against payment of premiums. The practice of deferring the outlays incurred in the acquisition of new business over the term of the insurance contract is called deferred acquisition cost.
Description: Acquisition costs are the direct and indirect variable outlays incurred by an insurer at the time of selling or underwriting an insurance contract both new and renewal.
The costs may be in the form of brokerage, underwrit. Insurance contracts that do not come under the ambit of life insurance are called general insurance.
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