[M001]
Machinery breakdown insurance
Protection against loss from disruption of boilers and machinery by an insured cause of loss, consisting of loss to the boiler and machinery itself, damage to other property, business interruption losses, or all three. Also known as breakdown insurance.
[M144]
MAIIF
(See Marine Accident Investigator's International Forum.)
[M001a]
MAIF--Maryland Automobile Insurance Fund
In the State of Maryland, it is a state agency created to provide automobile liability insurance for those who have been rejected by at least two private insurance carriers.
[M002]
Mail-order insurance
Purchasing insurance in response to solicitation by mail from insurers, a practice used by some insurers in marketing life, health and automobile insurance.
[m139]
Maintenance bonds
A device to insure the quality and efficiency level for a given project. It applies to the quality of labor as well as materials.
[M003]
Major hospitalization insurance
A health insurance coverage for injuries, sickness, accidents or illnesses that would otherwise result in major or catastrophic hospital costs for the insured. Deductibles for this insurance are usually higher than for other health insurance policies.
[M004]
Major medical insurance
A policy designed to reimburse the insured for excess medical expenses in and out of the hospital. The policy usually includes a deductible, a coinsurance clause and an aggregate limit.
[M114]
Make
Associated with automobile insurance. The make is the manufacturer, e.g., Ford, Toyota, Chevrolet.
(See also model.)
[M005]
Make book
Slang for specializing in certain types of insurance that are expected to produce unstable losses, such as airline insurance or medical malpractice insurance.
[M006]
Malicious mischief
Intentional and willful vandalism and destruction of property. In most property policies, it is linked with the vandalism cause of loss.
[M007]
Malpractice
Improper actions or failure to exercise proper skill by a professional or others involved with the care of the human body, such as a physician, dentist, blood bank, etc. Malpractice insurance is a form of liability coverage against such mistakes.
(See errors and omissions insurance.)
[M007a]
Managed care
A type of insurance protection or plan associated with health and workers compensation programs, that manages the services provided to an insured or member by placing limits on the number and type of services covered. Included are limits on such items as the number and type of treatments offered, which doctors, hospitals, clinics and other service providers an insured or member can use. Should the insured or member use services or providers not covered by the plan, that insured or member must bear a larger portion of the fee--if not the entire fee. The concept of managed care is that cost reductions are realized if the participating service providers are under specially negotiated contracts and that waste and redundancy can be reduced if the overall services covered are carefully monitored.
[M008]
Managing general agent (MGA)
An individual or organization granted authority to act as an insurer or reinsurer in performing certain functions for it, such as, underwriting, inspection or adjusting. Functions may include the appointment of sales agents or intermediaries. Most MGAs also operate as wholesale excess and surplus lines brokers.
[M009]
Managing physician
In an HMO or PPO, the managing physician is also called the primary physician or the primary health care provider. He/she is the program-approved physician whom the insured must consult first for all medical needs. The managing or primary physician will handle all medical needs and services that fall within that person's own area of expertise. If additional services or specialists are needed that are outside the primary care physician's area, he/she must concur the need and approve such additional services or specialists in order for coverage to be in effect for those additional costs.
[M134]
Manifestation
When an event is recognized as a loss that is possibly subject to insurance coverage.
(See continuous trigger theory, exposure theory, injury-in-fact theory and manifestation theory.)
[M135]
Manifestation theory
An event is recognized as an insurable loss (or occurrence) when damage first makes an appearance (manifests). The loss (both initial and subsequent damage) should be covered by the policy that is in effect at the time of manifestation.
(See continuous trigger theory, exposure theory, and injury-in-fact theory.)
[M010]
Manual
A book or series of books which contain rules and other information necessary for local offices of insurers, agents and brokers to write and service policies of insurance: underwriting rules, rates, tables for return premiums, deductibles, relativity tables, minimum premiums, etc.
[M011]
Manual excess
In liability insurance, rates and loss costs are based upon a standard or manual liability limit, usually $25,000. Should the insured request higher limits, the rates are increased by an increased limits factor, developed in table format to determine the additional charge that should be made to address the exposure of the higher limit. For the purposes of a higher limit of insurance, the portion of the additional premium that is charged above and beyond the basic or manual is called the manual excess.
[M012]
Manual rate
A charge for a unit of insurance set forth in a manual of instructions.
[M013]
Manufacturers and contractors liability insurance (M&C)
Liability insurance arising from business operations, including ownership and maintenance of premises. Applicable primarily to persons or corporations engaged in manufacturing, construction and installation work. Policies always exclude automobile liability. This coverage is now included in the simplified CGL.
[M014]
Manufacturers output policy (MOP)
"All-risk" property coverage for personal property of industrial firms away from the insured's own manufacturing premises.
[M015]
Manufacturers penalty insurance
Acting much like a surety bond to cover supply contracts, this commercial insurance is designed specifically to cover the insured's inability to supply or manufacture a given product that the insured has contractually agreed to deliver, due to a covered cause of loss.
[M016]
Manufacturers selling price clause
A property insurance coverage designed to provide the insured manufacturer with a valuation option to insure the goods manufactured at the price the manufacturer would have received for delivery of the finished goods to a customer. This valuation option includes sales costs, commissions and profits the insured would have earned if the goods were sold at the going price.
[M017]
Manuscript policy
A nonstandard policy specifically designed to meet the needs of the individual insured. Normally, this type of policy contains nonstandard forms or a combination of standard and nonstandard forms and nonstandard wording which have been developed and tailored to the coverage needs of the client. Usually this type of approach is used for large insureds or specialty exposures.
[M018]
MAP--Multicoverage Account Plan
A program providing favorable rate treatment for large risks written on an account basis. The plan applies to a combination of property and liability policies written by one insurer for one insured and having common expiration or anniversary dates. Not to be confused with the Individual Risk Premium Modification Plan, which relates to package policies of the special multiperil program. Lower rates are developed in the MAP program based on risk and expense modification and also the use of deductibles.
[M019]
Map
Maps of cities and towns giving details of construction and fire protection, made by the Sanborn Map Company--formerly used more commonly than today. Fire insurers kept such map records in their offices to indicate the location and other details of their insured risks in order to prevent undue concentration in a given building, city block, or area.
(See map clerk.)
[M020]
Map clerk
One who records the company's property lines on the Sanborn Map or on other records of the company's liability. In the past, being a map clerk was the first step to becoming a fire underwriter, but now the daily practice of mapping fire insurance liability has almost ceased.
(See map, and Sanborn Map.)
[M141]
Mapping
(See geocoding.)
[M022]
Margin account insurance
A form of credit life coverage, usually written on a group basis, to protect both stock broker and stock purchaser against loss from the death of the purchaser while moneys are owed for stock acquired on margin (or with partial payment).
[M145]
Marine Accident Investigator's International Forum
An Internet-based association that shares information on various marine insurance issues including loss investigation, risk management, settlement, safety, and environmental concerns. Membership is international in scope. Web address (as of this writing): www.maiif.net
[M023]
Marine definition
The 1953 NAIC recommendations, since adopted by most states, of those subjects which should be considered as marine insurance for regulatory purposes: insurance covering domestic shipments being transported or subject to transportation, insurance on instrumentalities of transportation and communication, and property floaters covering property being transported or subject to being transported. While the definition does not differentiate between ocean and inland marine insurance, its scope is primarily inland.
[M024]
Marine insurance
One of major divisions of insurance (life, health, property, marine, casualty, surety), primarily written for property in transit. If by sea, "ocean" marine or "wet" marine; otherwise, "inland" marine.
[M025]
Marine law
Section of the federal or national court system which deals with matters pertaining to vessels, crew, and their cargoes navigating on interstate or international waters. Maritime procedures, precedents and rules are different in admiralty courts than in other courts. Also called admiralty court.
[M026]
Marine perils
The perils which are insured against in a policy of ocean marine insurance. The wording of the marine policy is the result of several hundred years of careful study, judicial interpretation and precedent, and thus such perils have maintained an exact definite meaning in marine insurance.
[M027]
Marine syndicates
Groups of insurance underwriters that act through a manager to insure certain ocean marine classes of business.
(See syndicate.)
[M146]
Maritime employers liability coverages
(See Jones Act, U.S. Longshore and Defense Base Coverage Acts.)
[M028]
Market assistance program
A plan originated in Connecticut with the product liability crisis of 1975 to assist in the finding of available insurance through local committees of companies and producers. Recommended at that time by NAIC Advisory Committee and used later in a number of states for municipal liability insurance, day care centers, liquor liability risks, and more recently for commercial general liability insurance. Not considered a cure for limited availability of insurance, the plan(s) eased and reduced the impact.
[M029]
Market, tight
1) Scarcity of insurance.
2) Widespread reluctance of insurers to insure certain risks.
[M030]
Market value clause
A clause in which the insurer agrees that the amount it will pay in the event of loss shall be the value of the destroyed merchandise "on the market," which is the amount which could have been realized by selling the merchandise. Obviously, this includes the seller's profit; therefore, the clause is used with caution to avoid the creation of a moral hazard.
[M031]
Marketing representative
The field, sales or marketing representative of the insurer to the agency plant whose purpose is to offer the insurer's products and services to the agent.
[M031a]
Maryland Automobile Insurance Fund--MAIF
In the State of Maryland, it is a state agency created to provide automobile liability insurance for those who have been rejected by at least two private insurance carriers.
[M032]
Mass marketing
A marketing plan or technique whereby a group of persons insure with one company, usually at lower than standard premiums because of expense economy to the insurer. Premiums are usually collected and remitted to the insurer by a controlling body, such as an employer, a labor union, or a trade association. Also known as mass merchandising.
(See mass merchandising.)
[M033]
Mass merchandising
A marketing plan or technique whereby a group of persons insure with one company, usually at lower than standard premiums because of expense economy to the insurer. Premiums are usually collected and remitted to the insurer by a controlling body, such as an employer, a labor union, or a trade association. Also known as mass marketing.
(See group merchandising.)
[M034]
Mass underwriting
Underwriting that contemplates the overall criteria and characteristics of the group rather than the individual. The group qualities and results are evaluated versus any one specific insured.
[M035]
Master
The commander of a commercial vessel. Popularly the "captain," but the term in admiralty law and marine insurance is "master."
[M115]
Master contract (policy)
In health insurance the master contract is the policy sold to the group, e.g., if the group is an employer, then the employer receives the master contract and employees receive certificates of coverage.
[M036]
Master policy
An insurance policy used in group insurance that covers a group of persons to whom certificates of insurance are issued as their evidence of individual coverage under the policy. The two parties to the master policy are the sponsor of the group and the insurer.
[M037]
Master-servant rule
A tort liability theory that makes the employer responsible for the actions of employees at the workplace or while performing the duties and responsibilities of an employee at any location. This rule comes into play when the employer is in the position of directing the activities and the results of the employee.
[M116]
Matching contributions
A 401(k) plan can be set up so that an employer will match the contributions made by the employee. The match is usually capped at a percentage of the employee's contribution or a percentage of the employee's salary.
Material duty(ies)
The core responsibility(ies) for a given job which can’t be changed or skipped without substantially affecting the job’s purpose. With regards to disability insurance, the inability to perform a material duty means an injured worker is unable to perform the applicable job.
[M038]
Material fact
Information having objective reality which influences an insurer in granting or not granting insurance coverage.
(See concealment.)
[M117]
Material misrepresentation
A misrepresentation in a policy application that is material to the insurance and, in many policies, can void coverage. Misrepresenting the house color is probably not material in a homeowners application. Misrepresenting the number of claims the insured has filed could be material.
[M039]
Maternity benefit
Benefits provided in a health insurance contract for coverage for both maternity and childbirth expenses. While some policies pay only a flat limit, others provide the actual expenses incurred by the insured. Still others pay only childbirth expenses and not well-baby care. Many coverage variations are available.
[M040]
Mature
The term mature refers to life insurance coverages where the benefits and face value of the policy are fully available to pay benefits either at the time of the insured's death or at a specified date set in the policy.
[M041]
Maximum disability income policy
A type of disability policy with a stated maximum limit that is available for any one single claim, but which has no maximum or aggregate limit cap for multiple claims.
[M042]
Maximum foreseeable loss (MFL)
The anticipated maximum property fire loss that could result, given unusual or the worst circumstances with respect to the nonfunctioning of protective features (e.g., firewalls, sprinklers, and a responsive fire department, among others), as opposed to probable maximum loss (PML), which is a similar valuation, but which is made under the assumption that such protective features function normally.
(See probable maximum loss (PML), and shock loss.)
[M043]
Maximum period of indemnity
An option available to the business income coverage form, where the coinsurance requirements are removed and replaced with coverage for the actual loss sustained during the first 120 days of loss, not to exceed the stated limit of liability.
[M044]
Maximum plan limit
Within a health insurance plan, the maximum plan limit is the most or aggregate amount of benefits available for payment to insureds.
[M045]
Maximum possible loss (MPL)
The largest percentage of the insured property which could possibly be destroyed by the insured perils. Normally this amount would be all the property within the four walls of a structure, plus loss to adjacent property due to its proximity. An MPL estimate is invariably the ultimate in pessimism, but it is a most important concept in underwriting large risks in order to compute rates and to understand the need for capacity, as well as to appreciate all exposures. Two other expressions used from time to time, amount subject and maximum foreseeable loss (MFL), have substantially the same meaning as MPL.
(See probable maximum loss (PML).)
[M046]
Maxi-tail
An endorsement available to claims-made policies, which for additional premium will extend the period of time in which the insured must report a claim after the policy has been terminated. Most maxi-tails allow an unlimited period of time for a premium that may be up to 200% of the annual premium charged.
[M047]
M&C--manufacturers and contractors liability insurance
Liability insurance arising from business operations, including ownership and maintenance of premises. Applicable primarily to persons or corporations engaged in manufacturing, construction and installation work. Policies always exclude automobile liability. This coverage is now included in the Simplified CGL.
[M048]
McCarran-Ferguson Act
Enacted on March 9, 1945, a law by which Congress granted authority to the states to continue to tax and regulate the business of insurance (after the insurance business had been held by the Supreme Court to be commerce in a landmark case in 1944, and, therefore, subject to federal regulation whenever subject to interstate regulation). The act provided further that the antitrust laws should not apply to the extent the business of insurance is regulated by the states, except for coercion, intimidation and boycott. Also known as Public Law 15 (79th Congress, 1945. McCarran-Ferguson Regulation Act: 15 U.S.C. 1011-15).
(See Southeastern Underwriters Association (SEUA).)
[M049]
Mean
The average of the accumulation of data, statistics and their results for a given topic.
[M050]
Mechanics permit
A clause in a policy granting permission to employ workers such as mechanics, in and around the risk, since their work may increase the exposure. Permission is usually automatically included for such repairs and alterations which are necessary for the maintenance of the premises.
[M142]
Media professional liability
A form of errors and omissions coverage that protects operations involved in communications against allegations of third parties that the operations media activities caused them harm. Allegations generally involve communication hazards such as libel, slander, defamation, disparagement, invasion of privacy, product disparagement, etc.
[M133]
Mediation
Where disputing parties agree to discuss their grievance with a mediator to help resolve an argument over the amount of damage suffered in a loss. The mediator should have special training and experience and it is critical that he or she is a disinterested party.
[M051]
Medicaid
Federal government assistance to states providing medical care for the needy, created by the 1965 amendments to the Social Security Act.
[M052]
Medical expense insurance
Insurance providing for payment of medical, surgical, and hospital expenses.
[M118]
Medical Information Bureau
A not-for-profit association of life insurers that collects medical and other pertinent information about individual life insurance applicants from its members. A member insurer wishing to insure Jane Jones will query the MIB database to see whether there is any information on Jane in the database that would affect its underwriting decision. Information from MIB, Inc. is strictly confidential and is available only to member insurers.
[M053]
Medical malpractice
Improper actions or failure to exercise proper skill by a professional or others involved with the care of the human body, such as a physician, dentist, blood bank, etc. Malpractice insurance is a form of liability coverage against such mistakes.
(See errors and omissions insurance.)
[M054]
Medical payments insurance
Protection to pay the cost of medical care to an injured party regardless of whether the policyholder is liable. Written in conjunction with general and personal liability policies. A similar coverage, automobile medical payments insurance, is available in automobile liability policies.
[M055]
Medical review panels
Medical advisory panels that are established by individual states to review and affirm the validity of medical malpractice claims prior to the filing of such actions.
[M056]
Medical service plan
A type of health plan designed to offer physicians' services, as well as other medical services. These plans are formed by groups of participating physicians and medical services providers. Insureds are limited to the services of participating physicians and medical services providers.
[M057]
Medicare
The hospital insurance system and the supplementary medical insurance system created by the 1965 amendments to the Social Security Act.
[M058]
Medicare supplement policy
An optional type of private health insurance policy designed to supplement or pick up the costs of medical services not covered by Medicare. A type of gap coverage.
[M058a]
Medigap
A type of health insurance supplement offered by private insurers, designed to bridge the gap caused by the expenses and services not covered by Medicare and other federal programs.
[M059]
Mercantile open stock burglary policy
This form (now obsolete) provided an alternative to providing theft coverage under a commercial property form. It provided coverage of merchandise, furniture, fixtures and equipment against loss by burglary or robbery of a watchperson while the premises are not open for business and included coverage for damages to the premises. This coverage is now called Inside the Premises-Robbery and Burglary of Other Property in the Commercial or Governmental Crime Policies.
[M060]
Mercantile report
A report on an individual's personal characteristics, credit standing, habits, and similar facts which might influence the decision to insure that individual, as well as a visual or physical examination of a property to determine whether it is an acceptable risk for insurance.
[M061]
Mercantile risk
A property location used for the selling of merchandise, as distinguished from a habitational risk or a manufacturing risk in which goods are processed.
[M062]
Merchandise
Goods for sale.
[M063]
Merit rating
A system of rating in which the experience of the individual risk is a factor in determining the rate.
(See experience rating.)
[M064]
Messenger and interior robbery insurance
This form (now obsolete) has been replaced by the Commercial Crime coverage form. Three different insuring agreements would need to be selected in order to provide this single coverage.
[M065]
MFL--maximum foreseeable loss
The anticipated maximum property fire loss that could result, given unusual or the worst circumstances with respect to the nonfunctioning of protective features (e.g., firewalls, sprinklers, and a responsive fire department, among others), as opposed to probable maximum loss (PML), which is a similar valuation, but which is made under the assumption that such protective features function normally.
[M066]
MGA--managing general agent
An individual or organization granted authority to act as an insurer or reinsurer in performing certain functions for it, such as, underwriting, inspection or adjusting. Functions may include the appointment of sales agents or intermediaries. Most MGAs also operate as wholesale excess and surplus lines brokers.
[M119]
MIB (Medical Information Bureau)
A not-for-profit association of life insurers that collects medical and other pertinent information about individual life insurance applicants from its members. A member insurer wishing to insure Jane Jones will query the MIB database to see whether there is any information on Jane in the database that would affect its underwriting decision. Information from MIB, Inc. is strictly confidential and is available only to member insurers.
[M067]
Midi-tail
A claims-made liability policy endorsement or coverage option that may be purchased for an additional premium, which will allow the insured an extended reporting period to make claims to the insurer after the expiration of the policy. Often known by the acronym ERPs, which stands for extended reporting period endorsements. This option often ranges from 60 to 120 days in length.
[M068]
Military service exclusion
A provision or exclusion found in many life and health insurance policies that excludes coverage for any injury, illness, accident, or death that results from or is caused during the performance of military service during a period of war or other related military action.
[M069]
Mill construction
Before the regular use of steel or concrete in building construction, many brick manufacturing buildings were built with floor and wall construction of an unusually heavy timber. This type of building, which is frequently found in the cotton and woolen mills of New England, was called "mill" construction. It is considered to be superior in fire-resistive qualities to ordinary brick or masonry construction with wood joists.
[M120]
Minimum age requirement
A pension eligibility requirement, i.e., a plan participant must be at least 21 years of age to enroll.
[M070]
Minimum coverage clauses
Provisions within some policies that the coverage or limits provided by that policy will be at least the minimums required by the state in which the policy has been issued, no matter what the other policy terms, limits, or conditions state.
[M071]
Minimum premium
The lowest flat or earned policy charge for which a policy will be issued or for which coverage will be provided.
[M072]
Minimum rate
1) The minimum or lowest rate that the insurer will charge for the coverage, policy or endorsement.
2) The lowest rate available for the least hazardous exposures within a given classification or coverage.
[M073]
Mini-tail
A claims-made policy provision that allows additional time to the insured for the reporting of claims, should the claims-made policy be replaced with an occurrence policy or another claims-made policy with a different retroactive date. Usually, the period of time available is limited; up to 60 days after policy expiration is common. There is often no charge for this coverage, but it must be requested within a given period of time.
[M147]
Mini-wrap-up
A wrap-up for smaller construction projects developed to satisfy coverage concerns by the sponsor due to the inability of subcontractors to provide required coverages, such as construction defects coverage for condominium projects in California.
[M073a]
Miscellaneous bonds
A category of bonds which does not fit into any recognized division or category of fidelity or surety bonding, so is thus placed in an all-encompassing miscellaneous category.
[M074]
Misrepresentation
Misleading the company as to material facts affecting a policy or the settlement of a loss, either by directly or indirectly lying. Misrepresentation as to material facts voids policies.
[M121]
Misstatement of age provision
While age misstatement might be considered material, in most life insurance policies it is not. In individual life, if the applicant misstates the insured's age, the policy limit is adjusted up or down to reflect the correct age. In group life, the premium is adjusted.
[M075]
Mobile equipment
Vehicles not normally designed for use on public roads and not normally required to be licensed.
(See contractors' equipment.)
[M076]
Mobile home insurance
A special policy has been designed to meet the needs of mobile home owners or occupants, covering physical damage to the home, contents and personal liability while the home is used as a permanent residence.
[M122]
Mode of premium payment
In life or health insurance: weekly, monthly, annual, semiannual, quarterly or by automatic deduction.
[M123]
Model
Associated with automobile insurance. The type of vehicle from the manufacturer, e.g., Ford Taurus or Chevy Monte Carlo.
(See also make.)
[M077]
Model bill
Proposed legislation from a national organization for use by states choosing to do so.
[M078]
Modification rating
Rating plans that allow for the modification of the stated or base rate by the application of credits or debits. These rate modifications may be available for such factors as loss experience, size, classification peculiarities, multiple location premium dispersion, or other individual risk modification plans.
[M079]
Modified life insurance
A life insurance program giving standard coverages, where the premiums for the initial three to five years are lower than the average needed. They are then raised after that time to levels above the needed average.
[m140]
Modified no-fault insurance
In reality, all no-fault programs are modifications. Such programs use either a verbal (description of sustained injuries) or a monetary threshold. All accidents falling within the described type of loss or below a certain value are paid by each person's own insurer. A driver may sue other parties for damages arising from all other claims.
[M136]
Monetary threshold
A term used in states with no-fault insurance laws to describe the dollar limit in damages an injured person must exceed before he or she can sue the party that caused the injuries. Otherwise, the injured party must collect payment under his or her own policy’s no-fault provision.
[M081]
Money and securities broad form policy
Insures a business against "all risks" of loss or destruction of money and securities other than employee dishonesty and forgery. Applies both inside and outside the policyholder's premises. Also covers loss of other property and damage to the premises by safe burglary and robbery. This policy has been replaced with the Commercial Crime Coverage Form.
[M124]
Money market fund
A mutual fund that invests in low-risk securities, i.e., high grade bonds. Often considered to be the most liquid of the various categories of mutual funds.
[M080]
Money orders and counterfeit paper insurance
This form (now obsolete) provided coverage when fraudulent money orders or counterfeit paper currency was accepted by an insured. The Money Orders and Counterfeit Money Insuring Agreement in the Commercial and Governmental Crime policies replace it and expand it to include counterfeit money - not just currency.
[M125]
Money purchase pension plan
A defined benefit pension plan does not accumulate a separate benefit for each participant. The benefit is a formula based upon income and years of service and is calculated at retirement. A money purchase pension plan accumulates a fixed amount of dollars (usually a percentage of annual salary/compensation) in a separate account for the individual. Interest earnings/losses from investments are also added to/subtracted from the employee's account.
[M082]
Monitoring competition
Measuring the degree of economic rivalry or striving among sellers of insurance within a market for a given type of insurance.
[M083]
Monoline policy
A policy that covers only one line of insurance.
[M083a]
Monopolistic states
As used in workers compensation contracts, monopolistic refers to those states that do not allow competition within the workers compensation insurance arena. Only a single state fund is available and all insurance is placed with or through that state fund.
[M084]
Monopolistic state fund
A state-controlled workers compensation plan which writes insurance on such risks within the state and prohibits private insurers from doing so.
[M085]
Monthly debit ordinary life insurance
Ordinary life insurance policies with the premiums collected monthly.
Montrose Provision
(See non-cumulation clause.)
[M086]
MOP--manufacturers output policy
"All-risk" property coverage for personal property of industrial firms away from the insured's own manufacturing premises.
[M087]
Moral hazard
A condition or characteristic by which an insured intends to profit from an insured loss.
(See hazard, morale hazard, and physical hazard.)
[M088]
Morale hazard
The condition which exists when an insured becomes lax in matters of safety and fire prevention because insurance is in force to pay for a loss which may occur.
(See hazard, moral hazard, and physical hazard.)
[M089]
Morbidity rate
Rates that have been developed based on the accumulation of statistics and data and that are used to show the percentage or ratio of how often certain types of sickness or illness occur within a given period of time to the classification or a specific group of insureds.
[M090]
Morbidity table
A listing of data showing the accident or sickness rates of persons of each sex at each age.
[M126]
Mortality charge
The cost (expense) of death associated with a life insurance policy at the original age of the individual. The term is used in universal life insurance to represent one of the unbundled expense charges.
[M091]
Mortality rate
Rates that have been developed based on the accumulation of statistics and data and that are used to show the percentage or ratio of how death will occur within a given period of time to the classification or a specific group of insureds.
[M092]
Mortality table
A listing of data showing the death rates of persons of each sex at each age.
[M093]
Mortgage (or mortgagee) clause
Language attachable to an insurance policy covering mortgaged property which affords the mortgagee certain rights (e.g., that loss payments shall be payable to mortgagor and mortgagee as their interests may appear, that the mortgagee's right of recovery from the insurer shall not be adversely affected by any act or failure to act by the mortgagee, etc.).
[M127]
Mortgage holder
The company that holds the mortgage note on real property and in insurance is listed on the policy as mortgagee.
[M094]
Mortgage insurance
A life, credit life, or disability insurance policy designed to pay off the balance due or make the monthly payments on a mortgage if the insured should be injured, become ill, or die.
[M095]
Motel-hotel program
A package policy combining the various coverages applicable to the operation of motels, hotels and similar establishments. Basically it covers fire, allied lines, liability, burglary, and robbery insurance, and sometimes fidelity insurance for employees.
[M096]
Motor truck cargo [carriers form]
This inland marine form indemnifies an owner or operator of a motor truck, on which is carried property of others, against what the owner or operator may become liable to pay to the owners of the property carried as the result of loss or damage occurring while transporting the property. The Interstate Commerce Commission (as well as the laws of many states) requires a common carrier to have such insurance before being licensed.
(See motor truck cargo [owners form].)
[M097]
Motor truck cargo [owners form]
Insures the owner of a truck against loss to owned property while being transported.
(See motor truck cargo [carriers form].)
[M098]
Motor Vehicle Accident Indemnification Corporation (New York)
This corporation exists to pay certain claims of innocent victims of New York motor vehicle accidents caused by uninsured motorists, when the victim is not an insured under family protection coverage.
[M098a]
Motor Vehicle Report (MVR)
A record usually kept by an individual state's bureau of motor vehicles (or similar department). MVRs are frequently used by insurance companies to verify the underwriting and rating information on their current and prospective insureds.
The record shows (minimally) a licensed motor vehicle operator's identifying information (name, address, age, physical attributes, SSN, etc,) date of license issue or renewal, and dates of any traffic violations or license suspensions, revocations or reinstatements. Further, depending on the state, the record may include the dates of vehicular accidents. Accident information (when provided) usually depends upon whether it was the operator's fault and if it exceeded some monetary or verbal threshold. States also vary on the length or time it will keep records of driving incidents and the "points" they assign to such incidents.
[M099]
Motorcycle and motor scooter insurance
Physical damage and/or liability insurance specifically to cover the exposures of motorcycles, motor scooters and motor bikes.
[M100]
MPL--maximum possible loss
The largest percentage of the insured property which could possibly be destroyed by the insured perils. Normally this amount would be all the property within the four walls of a structure, plus loss to adjacent property due to its proximity. An MPL estimate is invariably the ultimate in pessimism, but it is a most important concept in underwriting large risks in order to compute rates and to understand the need for capacity, as well as to appreciate all exposures. Two other expressions used from time to time, amount subject and maximum foreseeable loss (MFL), have substantially the same meaning as MPL.
[M137]
MSO (Mutual Services Office)
Originally begun as an association of mutual insurers, it is now a corporation which provides a variety of services including rating, statistical, actuarial, and policy form services for multiple lines of property and casualty business. The association operates in seven Eastern and Midwestern states. MSO also assists member companies with product development and customization. It was established in 1944. Headquarters: Glen Rock, NJ.
[M128]
MSPA
Member, Society of Pension Actuaries designation sponsored by the American Society of Pension Actuaries. Headquarters: Fairfax, VA.
[M101]
Multicoverage Account Plan (MAP)
A program providing favorable rate treatment for large risks written on an account basis. The plan applies to a combination of property and liability policies written by one insurer for one insured and having common expiration or anniversary dates. Not to be confused with the Individual Risk Premium Modification Plan, which relates to package policies of the special multiperil program. Lower rates are developed in the MAP program based on risk and expense modification and also the use of deductibles.
[M143]
Multi-hazard mapping
Tracking the occurrence of natural and man-made losses on a geographical basis to assist in risk management, loss mitigation and loss recovery planning.
[M102]
Multiline insurance
A package of coverages within one policy that provides for more than one line of insurance such as property and liability. Not the same as multiperil which is a contract that insures more than one peril or cause of loss within the policy. For example, an "all-risk" property policy is multiperil.
[M103]
Multiperil insurance
A contract that insures more than one peril or cause of loss within the policy. For example, an "all-risk" property policy is multiperil. Not the same as multiline, which is coverage for more than one line of insurance, such as property and liability.
[M129]
Multiple employer trust (MET)
This arrangement allows employers who are too small to qualify for group health or life coverage to obtain it by joining together as members of a trust.
[M104]
Multiple indemnity
A type of life insurance policy that increases the benefits paid the beneficiary by specified multiples, should death be a result of certain stated accidents or injuries. Most policies state that the increased coverage applies only in limited, very specific circumstances.
(See accidental death benefit.)
[M105]
Multiple location policy
A policy covering real or personal property subject to a single common interest (owner, tenant, or one holding a financial interest or title) at a number of different locations. Such policies are rated under a special plan.
[M106]
Multiple protection life insurance
A combination term and whole life insurance policy designed to pay one, usually higher, limit for the first stage of the policy and which then converts to a lower whole life policy after a specified time period for the remainder of the policy.
[M107]
Municipal insurance
Commercial insurance programs designed specifically to cover cities, towns, states, or other types of municipalities.
[M108]
Musical instrument floater
An inland marine form designed to insure musical instruments against many different kinds of loss or damage.
[M109]
Mutual Atomic Energy Reinsurance Pool
A pool formed by mutual casualty and fire companies to provide bodily injury and property damage insurance for private nuclear reactor installations. Similar to the stock company syndicate, American Nuclear Insurers.
[M110]
Mutual fund insurance
A specialty insurance designed for financial investments, whereby coverage is guaranteed for the repayment of the principal amount that was invested in the fund.
[M130]
Mutual holding companies
Mutual insurance companies cannot sell stock to increase investment capital. Mutual insurance companies can demutualize, but this can be expensive because policyholders have to be paid for their ownership interest. With a mutual holding company, two things happen. First, a new mutual company is established as a holding company. The existing mutual company is converted to a stock company which then becomes a wholly owned subsidiary of the mutual holding company. Policyholders retain ownership interests in both the mutual holding company and the stock company, but the stock company is now responsible for the contract rights. The stock company may sell stock to raise capital, but the mutual holding company policyholders still maintain their membership rights including the return of value for loss of ownership interest should the mutual holding company ever be demutualized.
(See demutualization).
[M111]
Mutual insurance
Protection written by an incorporated insurer having no capital stock and directed by policyholders who are its owners. Mutual insurers are required by law to maintain surplus funds as an operating cushion for solvency. Such surplus funds parallel the capital and surplus funds required by capital stock insurers as margins for solvency.
(See capital stock insurance, and stock insurance company.)
[M112]
Mutual insurance companies
A type of insurance company that is owned by its insureds or policyholders instead of stockholders. A board of directors or trustees are elected by the insured and policyholders to run the business operations. Mutual insurers are bound by the same state regulations regarding the maintenance of funds and reserves as a stock insurer, although the names of the required types of funds may be slightly different. The same types of solvency requirements exist.
(See capital stock insurance.)
[M138]
Mutual Services Office (MSO)
Originally begun as an association of mutual insurers, it is now a corporation which provides a variety of services including rating, statistical, actuarial, and policy form services for multiple lines of property and casualty business. The association operates in seven Eastern and Midwestern states. MSO also assists member companies with product development and customization. It was established in 1944. Headquarters: Glen Rock, NJ.
[M131]
Mutualization
The process where a stock company converts itself to a mutual company.
(See also demutualization.)
[M112a]
MVR--Motor Vehicle Report
A record usually kept by an individual state's bureau of motor vehicles (or similar department). MVRs are frequently used by insurance companies to verify the underwriting and rating information on their current and prospective insureds.
The record shows (minimally) a licensed motor vehicle operator's identifying information (name, address, age, physical attributes, SSN, etc.), date of license issue or renewal, and dates of any traffic violations or license suspensions, revocations or reinstatements. Further, depending on the state, the record may include the dates of vehicular accidents. Accident information (when provided) usually depends upon whether it was the operator's fault and if it exceeded some monetary or verbal threshold. States also vary on the length or time it will keep records of driving incidents and the "points" they assign to such incidents.
[M113]
Mysterious disappearance
The vanishing of insured property in an unexplained manner. Previously there were disputes under theft policies as to whether property mysteriously lost had or had not been stolen. To avoid contention, insurers stated in such policies that mysterious disappearance was presumed to be due to theft. Mere disappearance of property, such as an article dropped from a boat, is not covered, since the disappearance is not mysterious.
