Adverse Selection The tendency of persons with poorer than average health expectations to apply for, or continue, insurance to a greater extent than for persons with average or better health expectations.

Aggregate Excess of Loss Reinsurance A form of excess of loss reinsurance which identifies the reinsured against the amount by which the reinsured's losses incurred (net after specific reinsurance recoveries) during a specific period (usually twelve months) exceed the specified retention. This form of reinsurance is also known as stop-loss reinsurance, or excess of loss ratio reinsurance.

Beneficiary The person designated or provided for by the policy terms to receive the proceeds upon the death of the insured.

Claim A demand to the insurer for the payment of benefits under the insurance contract.

Disability Physical or mental handicap resulting from sickness or injury. It may be partial or total. (See Partial Disability; Total Disability.)

Disability Income Insurance A form of health insurance that provides periodic payments to replace income when an insured person is unable to work as a result of illness, injury or disease.

Group Contract A contract of insurance made with an employer or other entity that covers a group of persons identified as individuals by reference to their relationship to the entity.

Health Maintenance Organization (HMO) A structured health care delivery system in which providers are usually prepaid for their services, no coverage is provided for out-of-network care, and gatekeeping is imposed.

Health Reimbursement Account (HRA) Employer funded arrangement that allows employers to offer high deductible health plans and offset the employees out-of-pocket expenses by funding an HRA.

Health Savings Accounts (HSA) Established by an eligible individual or by an employer for an eligible employee, an HSA is a custodial or trust account used for paying qualified medical expenses. HSAs combine a savings account with a high-deductible health plan, offering lower health insurance premiums with various tax advantages.

Managed Care Descriptive of a system or technique by which payers make providers accountable for the quality and cost of medical care.

Medical Case Management A direct patient intervention technique that involves assessing a patient's health and psychosocial needs, developing a plan to meet those needs, obtaining approval for the plan from the payer and treating provider, implementing the plan, and monitoring its operation.

Noncontributory A term applied to employee benefit plans under which the employer bears the full cost of the benefits for the employees. One hundred percent of the eligible employees must be insured.

Partial Disability The result of an illness or injury which prevents an insured from performing one or more of the functions of his/her regular job.

Point of Service (POS) plans usually are PPO plans that have a strong gatekeeper and utilization review like an HMO, but offer out-of network coverage like a PPO. Some HMO's with out-of-network coverage are also called POS plans.

Preferred Provider Organization (PPO) A structured health care delivery system which uses a network of health care providers who render services to plan enrollees at fees negotiated in advance.

Primary Care Physician (PCP) A physician such as a general practitioner or family physician, who has not specified in a medical field.

Reinsurance Pool An organization of insurers or reinsurers through which particular types of risks are underwritten with premiums, losses and expenses shared in agreed ratios.

Reinsurer An insurer or reinsurer assuming the risk of another under contract. Also known as a reinsurance company or reinsurance carrier.

Renewal Continuance of coverage under a policy beyond its original term by the insurer's acceptance of the premium for a new policy term.

Run-Out A termination provision of a reinsurance contract stipulating that the reinsurer shall remain liable for loss under reinsured policies in force at the date of termination, as a result of occurrence taking place after the date of termination.

Self Insurance Setting aside of funds by an individual or organization to meet the losses and to absorb fluctuations in the amount of loss, the losses being charged against the funds so set aside or accumulated.

Self-Insurer An individual, partnership, or corporation who retains an amount of first loss for its own account and purchases an excess of loss cover to protect itself in the event of a catastrophe.

Short-Term Disability Income Insurance The provision to pay benefits to a covered disabled person as long as he/she remains disabled up to a specified period not exceeding two years.

Stop Loss Reinsurance A form of reinsurance whereunder the reinsurer reimburses the ceding company of the amount, if any, by which the latter's incurred losses during any calendar year for a specified class of business exceed a specified loss ratio. Used particularly in classes of insurance with wide fluctuation in losses from year to year, such as hail insurance. Also called Aggregate Excess of Loss and Excess of Loss Ratio.