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L-SHARE VARIABLE
ANNUITIES |
A form of variable annuity
contract usually with short surrender periods
and higher mortality and expense risk charges.
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LADDERING |
A technique that consists
of staggering the maturity dates and the mix of
different types of bonds.
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LAW OF LARGE NUMBERS |
The theory of probability
on which the business of insurance is based.
Simply put, this mathematical premise says that
the larger the group of units insured, such as
sport-utility vehicles, the more accurate the
predictions of loss will be.
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LIABILITY INSURANCE |
Insurance for what the
policyholder is legally obligated to pay because
of bodily injury or property damage caused to
another person.
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LIMITS |
Maximum amount of
insurance that can be paid for a covered loss.
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LINE |
Type or kind of insurance,
such as personal lines.
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LIQUIDATION |
Enables the state
insurance department as liquidator or its
appointed deputy to wind up the insurance
company’s affairs by selling its assets and
settling claims upon those assets. After
receiving the liquidation order, the liquidator
notifies insurance departments in other states
and state guaranty funds of the liquidation
proceedings. Such insurance company liquidations
are not subject to the Federal Bankruptcy Code
but to each state’s liquidation statutes.
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LIQUIDITY |
The ability and speed with
which a security can be converted into cash.
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LIQUOR LIABILITY |
Coverage for bodily injury
or property damage caused by an intoxicated
person who was served liquor by the
policyholder.
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LLOYD'S OF LONDON |
A marketplace where
underwriting syndicates, or mini-insurers,
gather to sell insurance policies and
reinsurance. Each syndicate is managed by an
underwriter who decides whether or not to accept
the risk. The Lloyd’s market is a major player
in the international reinsurance market as well
as a primary market for marine insurance and
large risks. Originally, Lloyd’s was a London
coffee house in the 1600s patronized by
shipowners who insured each other’s hulls and
cargoes. As Lloyd’s developed, wealthy
individuals, called “Names,” placed their
personal assets behind insurance risks as a
business venture. Increasingly since the 1990s,
most of the capital comes from corporations.
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LLOYDS |
Corporation formed to
market services of a group of underwriters. Does
not issue insurance policies or provide
insurance protection. Insurance is written by
individual underwriters, with each assuming a
part of every risk. Has no connection to Lloyd’s
of London, and is found primarily in Texas.
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LONG-TERM CARE
INSURANCE |
Coverage that, under
specified conditions, provides skilled nursing,
intermediate care, or custodial care for a
patient (generally over age 65) in a nursing
facility or his or her residence.
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LOSS |
A reduction in the quality
or value of a property, or a legal liability.
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LOSS ADJUSTMENT
EXPENSES |
The sum insurers pay for
investigating and settling insurance claims,
including the cost of defending a lawsuit in
court.
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LOSS COSTS |
The portion of an
insurance rate used to cover claims and the
costs of adjusting claims. Insurance companies
typically determine their rates by estimating
their future loss costs and adding a provision
for expenses, profit, and contingencies.
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LOSS OF USE |
A provision in homeowners
and renters insurance policies that reimburses
policyholders for any extra living expenses due
to having to live elsewhere while their home is
being restored following a disaster.
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LOSS RATIO |
Percentage of each premium
dollar an insurer spends on claims.
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LOSS RESERVES |
The company’s best
estimate of what it will pay for claims, which
is periodically readjusted. They represent a
liability on the insurer’s balance sheet.
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