[G001]
GAAP--generally accepted accounting principles
A method of reporting the financial results of an insurer more in accordance with the "going-concern" basis used by other businesses. GAAP assigns income and disbursements to their proper period, as distinguished from the more conservative requirements of statutory accounting affecting insurers.
(See statutory accounting principles (SAP).)
Gain share program
With regards to P&C insurance, it refers to companies that offer employees a financial incentive to actively participate in safety programs IF adherence results in reduced losses. Typically, participating employees may qualify for some established amount or percentage of a described, realized gain (savings).
[G002]
Gambling
Creating risk by agreeing with another to win or lose something on the outcome of a certain event. Insurance is the opposite of gambling: gambling creates risk, while insurance shifts risk already in existence from one party to another.
[G003]
Gap coverage
An amount of insurance purchased to satisfy the requirement of an excess carrier with respect to underlying insurance. For example, if an excess insurer requires the insured to carry $500,000 of underlying coverage, but the primary insurer will write only $300,000, $200,000 is purchased to fill the gap. Also known as buffer layer.
Gap insurance
For auto insurance, refers to coverage against loss caused by the amount an insurer may pay for a vehicle that is lost/destroyed and the outstanding balance that is due under a loan or lease arrangement.
[G004]
Garage policy
Protects garage or service station operators, vehicle rental agencies, car washes, auto or vehicle dealers, and trailer or RV dealers for claims alleging bodily injury or property damage caused by the operator's negligence in business operations and the sale or use of automobiles.
[G064]
Garagekeepers legal liability (GKLL)
Pays amounts an insured is legally obligated to pay because of damage or loss to property of others that is in the insured’s care, custody or control.
[G005]
Garment contractors floater
An inland marine form of policy which insures the goods of the manufacturer against physical loss or damage while in transit. May be extended to cover while on the premises of the manufacturer.
[G006]
Garnishment
A court order issued to a person holding property or money of another: the order states not to give it to the owner or anyone else because suit has been filed or other legal steps have been taken to provide for other courses of action. Money due under insurance policies is sometimes subject to such procedure because of obligations of one to whom the loss would be paid.
[G053]
GCW
The gross carriage weight of vehicles—usually trucks. It indicates how much cargo a vehicle can haul.
[G007]
Gender rating
When different sets of rates are developed for each gender based on the "verifiable" actuarial statistics of that gender, most often used in life, health and auto insurance.
[G008]
General Adjustment Bureau, Inc.
A national firm providing extensive loss settling, appraisal, and other services for insurance companies and firms practicing risk retention. Headquarters: New York, NY.
(See adjustment bureau.)
[G009]
General agency system
An insurance sales and distribution system found most often in life and health insurance, where a general agent is appointed by the insurer to administer the insurance operations for that insurer in a specified territory. The general agency performs most of the same functions as a branch office would, saving the insurer much of the expense of a branch office.
[G010]
General agent
1) An independent agent who represents one or more insurers with the authority to appoint subagents who report their business through the general agent, who receives an overriding commission for services provided. In some territories a general agent also sells insurance, while functioning in others solely as a manager.
2) A title used by some insurers for those agents receiving a higher commission rate than other agents (because of a higher volume of business placed with the insurer). Such a general agent normally has no additional authority or responsibility, and the title is used to designate the higher commission rate.
(See agency and insurance agency.)
[G011]
General aggregate limit
The sum or total amount that will be paid in any one policy period, regardless of how many claims, losses, suits, or insureds may be involved. Some policies allow the aggregate limit to be reinstated after it has been exhausted, by endorsement and for additional premium.
[G012]
General average
In ocean marine insurance, a loss which is common to all interests, such as the hull owners, the cargo owners and the receivers of the freight and charges, etc., which may arise due to a peril to the entire venture, which requires a sacrifice or expenditure for the benefit of all. An example is the stranding of the vessel wherein the vessel must engage a tug to remove her from the strand. Without the tug's assistance, all would be lost. The expenses incurred are shared pro rata based on the value of each interest, whether insured or not.
(See particular average, contributory value clause, general average bond, general average deposit, jettison and sacrifice.)
[G013]
General average bond
As it applies to ocean marine insurance, this bond is issued for the obligation of the cargo owner with respect to that cargo owner's proportion of the general average.
(See general average.)
[G014]
General average deposit
A cash deposit required of cargo owners for the payment of that cargo owner's proportion of the general average.
(See general average.)
[G015]
General aviation
A term for any aviation exposure or risk except commercial airlines and military risks.
[G016]
General cover
A policy covering property at several locations, the premium for which is determined by averaging the stated amounts of value, which the policyholder is required to report to the company at stated intervals.
[G065]
General damages
In liability insurance, refers to awards which may fall into either compensatory or punitive. Compensatory consists of either general damages, which include pain and suffering, and special damages, which are out-of –pocket expenses. Punitive (or exemplary) are amounts that are awarded as a form of punishment or to act as an example.
[G017]
General interrogatory
A question such as found in the NAIC Annual Statement or as addressed by one party to another party in a lawsuit.
[G054]
General liability
A form of insurance sold to businesses to indemnify the business for third party liability claims due to negligence. Coverages can include premises and operations liability for onsite and jobsite accidents and products liability claims for products that injure third parties.
[G017a]
General partners liability coverage
A policy that protects a partnership's general (managing) partner from his liability for causing loss to limited partners due to business-related errors and omissions, such as breach of duty and accusations of lack of devotion to operations.
[G018]
Generally accepted accounting principles (GAAP)
A method of reporting the financial results of an insurer more in accordance with the "going-concern" basis used by other businesses. GAAP assigns income and disbursements to their proper period, as distinguished from the more conservative requirements of statutory accounting affecting insurers.
(See statutory accounting principles (SAP).)
[G066]
Geneva Association
International organization of chief executives of major insurers from U.S., Europe and Japan, dedicated to the research and study of insurance and risk management and their impact on the global economy. Headquarters: Geneva, Switzerland
[G071]
Geocoding
Refers to the use of automation to process geographic information for specific locations. Its ability to identify a location's physical surroundings (such as distance to a shore line or other buildings) allows the information to be used by insurers as an underwriting tool.
[G075]
Geopositioning
Any method that facilitates the location of one point relative to the surface of the earth (i.e., intersection of an object's latitude and longitude).
[G055]
GIC--guaranteed investment contract
Found in pension plans. Similar concept to a CD (Certificate of Deposit). The pension plan agrees to give the insurer a large block of money to invest. The insurer agrees to pay a fixed percent of interest on that block of money for a fixed period of time.
[G018a]
Gift tax
Taxes against gifts that one person or one party makes to another. These taxes include both state and federal.
[G019]
Glass insurance
Coverage against the breakage of glass.
[G067]
GLB (Gramm-Leach-Bliley Act)
Also known as the Financial Services Modernization Act, which took effect in November 1999. The GLB’s major impact is on the greater freedoms of banks, insurers and security firms to participate more widely in financial areas that used to be strictly defined, such as banks, through holding companies, being able to purchase insurers or brokerages and sell such products. The other area concerns privacy rights and the new requirements placed on companies regarding how customer data is collected, used and shared.
[G072]
Global insurance
Refers to coverage that applies to losses from all classes of insurance policies.
[G020]
GNWPI--gross net written premium income
The generic term to describe the rating base for excess of loss reinsurance:
1) the ceding company's premium income, as opposed to premium receipts
2) measured net, meaning after cancellations, refunds and premiums paid for reinsurance protecting the cover being rated
3) gross, meaning before deducting any expenses.
(See subject premium.)
[G073]
Going and coming rule
An informal term that typically refers to commuting to and from work and that time being excluded as part of a workday. This distinction is important in determining whether an employer may be held partially or totally responsible for a loss that occurs during a commute.
Golfer's insurance
A package policy that responds to legal liability arising out of golfing as well as loss to golfing equipment (clubs, bags, clothing, etc.)
Going bare
[G022]
Good driver discount
Credits or discounts allowed by some insurers in some jurisdictions that are applied to reduce automobile insurance premiums for drivers with a good driving records.
[G023]
Good student discount
A reduced automobile insurance premium is sometimes granted students with high scholastic achievement because some studies have indicated a relationship between good grades and safe driving.
[G023a]
Goodwill
An intangible business asset. It refers to the value of a business which has been built up through the reputation of the business concern and its owners.
[G024]
Governing classification
In determining rates for compensation insurance, the principal occupation of the insured.
[G025]
Governmental action exclusion
A property exclusion which clarifies that the insurance policy does not cover physical damage losses which result from any governmental seizure or destruction, except when the destruction is to prevent the spread of fire.
[G026]
Grace period
An amount of time (usually one month) after the life insurance policy's premium due date, during which the policy continues in effect when the premium due is not paid. Many policies that have cash values also provide an automatic premium loan provision, in which part of the cash value is used as a loan to pay the premium due, thereby keeping the policy in force for a longer period. Most state laws require a grace period in life insurance policies.
[G027]
Graded commission
Compensation for selling and servicing insurance, payable to an agent or broker, the percentage of which is dependent on the size of the premium. The higher the premium, the lower the commission percentage. The opposite of flat commission in which the same rate of commission applies for any size of premium.
(See flat commission.)
[G056]
Graded premium whole life insurance
The premiums start out low and then jump to a higher level after a period of time. Used with medical students and others who have high future earnings potential but have limited funds today.
[G028]
Grading of cities and towns
A 10-category ranking or schedule of public fire protection of cities and towns established in 1916. The grading is currently maintained by the Insurance Services Office for use in making fire insurance rates and to encourage local governments to maintain better fire fighting equipment and personnel. A city or town is ranked in one of the categories by receiving deficiency points for failing to meet established standards under each of these major headings: water supply, fire department, fire service communications, fire safety control, climate, and divergence between fire department and water supply. Town Class I is the best class (a city or town having fewer than 501 points), and Town Class 10 is the worst (more than 4,500 points).
[G068]
Gramm-Leach-Bliley Act (GLB)
Also known as the Financial Services Modernization Act, which took effect in November 1999. The GLB’s major impact is on the greater freedoms of banks, insurers and security firms to participate more widely in financial areas that used to be strictly defined, such as banks, through holding companies, being able to purchase insurers or brokerages and sell such products. The other area concerns privacy rights and the new requirements placed on companies regarding how customer data is collected, used and shared.
[G029a]
Grantee
The buyer of real estate.
[G029b]
Grantor
The seller of real estate.
Greenmail exclusion
Greenmail refers to sales of corporate stock at a discounted price in order to dissuade certain stockholders who may be contemplating a hostile takeover. The greenmail exclusion is found in Directors Errors and Omissions policies and bars insurance protection for lawsuits (typically filed by stockholders who were not offered discounted shares) alleging harm from greenmail.
[G030]
Gross earnings form
A form of time element insurance which is now obsolete, where the premium consideration is based upon the policyholder's sales less cost of merchandise. The current coverage form available is business income coverage.
(See business income insurance.)
[G031]
Gross line
The amount of insurance written on a particular exposure by an insurer. Gross line differs from the net line by the amount of reinsurance placed.
[G032]
Gross net premiums
In company language, gross written premiums less return premiums, but not less reinsurance.
[G033]
Gross net written premium income (GNWPI)
The generic term to describe the rating base for excess of loss reinsurance:
1) the ceding company's premium income (as opposed to premium receipts)
2) measured net, meaning after cancellations, refunds and premiums paid for reinsurance protecting the cover being rated
3) gross, meaning before deducting any expenses.
(See subject premium.)
[G034]
Gross premium
In company language, the written premium before deducting any premium paid for reinsurance and, in some cases, before paying any return premium.
[G074]
Gross rate
The adjusted premium that is derived by adding a loading (a factor or fee) to a pure premium amount.
[G034a]
Gross vehicle weight (GVW)
As it applies to auto coverages, this is the total of the combined weight of the vehicle itself plus the weight or tonnage that the vehicle is capable of carrying.
[G035]
Group accident and health insurance
Group insurance programs designed to offer affordable accident and/or health coverage to a natural group, such as employees of an employer or members of an association and their families. A single contract is provided for the entire group which outlines the standard benefits, terms and provisions that apply to all members of the group. Individual certificates are usually issued to the members to verify that they are covered.
[G036]
Group captive insurance company
A captive insurer formed and controlled by more than one entity.
[G037]
Group contract
Group insurance programs designed to offer affordable accident and/or health coverage to a natural group, such as employees of an employer or members of an association and their families. A single contract is provided for the entire group which outlines the standard benefits, terms and provisions that apply to all members of the group. Individual certificates are usually issued to the members to verify that they are covered.
[G038]
Group credit life insurance
Life insurance coverage designed to protect lenders should any of their borrowers become disabled or die. The limit of insurance is written on the total amount that the lender has outstanding to borrowers, but the lender will receive only the amount of the balance of the outstanding loan of each borrower who becomes disabled or dies, as the event occurs.
[G057]
Group deferred annuity
A funding method for pension plans. Employer contributions are made to purchase deferred retirement annuities for plan participants.
[G039]
Group disability insurance
Group insurance programs designed to offer affordable disability coverage to a natural group, such as employees of an employer or members of an association and their families. A single contract is provided for the entire group which outlines the compensation benefits available should accident or illness occur to a member of the plan. Normally the compensation is a percent of the actual income of the member and is limited in the length of time that a member can collect those benefits. These limitations are designed to encourage recovery and return to work. Individual certificates are usually issued to the members to verify that they are covered.
[G040]
Group health insurance
Group insurance programs designed to offer affordable health coverage to a natural group, such as employees of an employer or members of an association and their families. A single contract is provided for the entire group which outlines the standard benefits, terms and provisions that apply to all members of the group. Individual certificates are usually issued to the members to verify that they are covered.
[G041]
Group insurance
1) Insuring a number of persons under a single master contract. The persons have a common sponsor, such as an employer, a union or an association.
2) "True" group insurance precludes individual underwriting by the insurer, requires the employer to insure all employees if the employer pays any portion of the premium, and allows employees the option of participating in any coverage for which the employees must pay.
[G042]
Group life insurance
Group life insurance programs designed to offer affordable coverage to a natural group, such as employees of an employer or members of an association and their families. A single contract is provided for the entire group which outlines the standard benefits, terms and provisions that apply to all members of the group. Normally the life insurance benefits offered are based on the compensation earned by the individual member. Most of the group life insurance programs also offer the members the ability to convert to other permanent, whole or term life products upon termination of employment. Individual certificates are usually issued to the members to verify that they are covered.
[G043]
Group merchandising
A term often used in a misleading sense to cover all forms of mass merchandising. More accurately used to cover the sale of insurance to the members of a particular group or association under a single group contract, where premiums for the participants are determined for the group on the basis of its own expenses and losses and where all or most of the group are insured.
(See mass merchandising and franchise insurance.)
[G058]
Group ordinary life insurance
A group life insurance plan that includes permanent life insurance.
[G059]
Group permanent life insurance
Permanent life insurance underwritten on a group basis, i.e., with limited medical questions. Group paid-up insurance is often the vehicle used in pension plans that include permanent life insurance.
[G044]
Group property and liability insurance
Group insurance programs designed to offer affordable property and liability insurance, most often automobile or homeowners coverages to a natural group such as employees of an employer or members of an association. This is usually an optional benefit that the group member may purchase and is not subsidized by the employer or group. The cost to the member, however, is usually less than what is otherwise available because of lower marketing, sales and administrative expenses saved by the insurer.
[G060]
Group universal life insurance
A group life insurance plan that includes universal life insurance with all its inherent flexibilities.
(See also universal life.).
[G045]
Guaranteed annuity payments
A type of annuity that guarantees the continued payment of an annuity, even if the annuitant should die. At the death of the annuitant, payments are made either to a secondary annuitant or to the estate of the primary annuitant should a secondary not be mentioned.
[G046]
Guaranteed insurability
Life and health insurance provisions which guarantee the insured the right and ability to increase or purchase additional coverage without proving insurability.
[G047]
Guaranteed issue
Group insurance programs designed to offer affordable health coverage to a natural group, such as employees of an employer or members of an association and their families. The difference between this and other group insurance is that no proof of insurability is required. It is guaranteed that all participants will be issued. A single contract is provided for the entire group which outlines the standard benefits, terms and provisions that apply to all members of the group. These benefits, however, may be tempered by the age and size of the group. Individual certificates are usually issued to the members to verify that they are covered.
[G061]
Guaranteed investment contract (GIC)
Found in pension plans. Similar concept to a CD (Certificate of Deposit). The pension plan agrees to give the insurer a large block of money to invest. The insurer agrees to pay a fixed percent of interest on that block of money for a fixed period of time.
[G048]
Guaranteed renewable
In some life and health insurance programs, the insurer has guaranteed the renewal of policies for a set period of time or until an insured becomes a specified age. The insured has the option to renew. The insurer does not and must renew at the insured's request. The insurer cannot change benefits, terms, or conditions except rates, and then those rates cannot be changed for any one individual but must apply to an entire class.
[G062]
Guaranty association
Found in both life and property-casualty. Voluntary or state-mandated funds that insurers pay into to reimburse policyholders and claimants of an insolvent insurance company.
(See also guaranty fund.)
[G049]
Guaranty fund
An amount of money assessed certain insurers in a given state to reimburse policyholders and claimants of an insolvent insurer in that state. The fund may be created before an insolvency occurs (pre-assessment, as in New York) or afterward (post-assessment), and virtually all states now have such protection.
(See Insurance Guaranty (Insolvency Act), and insurance insolvency act.)
[G069]
Guard
Any person the insured retains specifically to have custody of property inside a covered premises.
[G050]
Guest statutes
In some states, legislation requiring that a guest passenger must prove something higher than ordinary negligence in order to recover from the host driver. Apart from such laws, the guest passenger would have the same rights as any other member of the public and would only be required to prove ordinary negligence.
[G051]
Guiding principles
Rules agreed on by most insurers for apportioning loss payments among two or more policies covering a given loss.
(See overlapping insurance.)
[G052]
GVW--gross vehicle weight
As it applies to auto coverages, this is the total of the combined weight of the vehicle itself plus the weight or tonnage that the vehicle is capable of carrying.
