Glossary of Business Terms

The product code for Guidewire ContactManager. In the insurance industry, a contact management application (such as ContactManager) is often known as an Address Book. Also ab.

A policy with the appropriate coverage at a high enough level to pay a claim against it has the ability to pay. ClaimCenter checks the coverage limits on the policy before setting or increasing reserves, or before making any new payment. This check ensures that the policy has the ability to pay the entire reserve amount or that the sum of payments does not exceed the coverage limit on the policy.

(1) In PolicyCenter and BillingCenter, a higher level construct that logically groups multiple policies under a person or a company, under one entity, Account. For example, Acme Company account can include workers’ compensation and general liability policies, or a person can have both personal auto and homeowners policies. By tying both policies to the same account, the system tracks all of the business that the insurance company has with a single insured.

(2) Also in BillingCenter, an accounting record that accumulates the results of transactions and shows increases, decreases, and a balance.

An agency bill process that allows the producer to determine the due dates and the amounts to be paid. The producer is not sent a monthly statement, but instead submits a promise to pay to the insurer. This document lists the expected net amounts and the gross amount minus the commission amount. The promise to pay identifies the amount the producer expects to pay each month. If there is a discrepancy, BillingCenter generates an exception.

A process that automatically generates a rating of Poor, Marginal, Acceptable, Good, Excellent, or New Account for an account. BillingCenter bases the rating on certain criteria such as the number of delinquencies, pejorative payments or insufficient funds events, or policy cancellations. The insurer can use the account evaluation rating to help determine whether to renew the policy.

Treaties that operate on an accounting year basis include all transactions that take place during the accounting year of the treaty, regardless of the underwriting year to which they relate.

Money that an insurer owes to an external party, such as a collection agency, a bank, a policyholder, or a regulator. This item appears on the insurer’s balance sheet as a current liability, as the expectation is that the liability must be fulfilled in less than a year. If you pay off accounts payable amounts, then it represents a negative cash flow for the company.

In InsuranceNow, Accounts Payable is also the name of the module that handles outgoing payments, bank reconciliation, check issuance, and other such operations.

Money that an insured owes an insurer for products and services provided on credit.

In BillingCenter, a specific service is generally treated as an account receivable only after an invoice has been sent to the insured. BillingCenter treats this money as a current asset on a balance sheet.

An electronic network of financial transactions in the United States that processes large volumes of both credit and debit transactions, which are originated in batches.

A message sent back to a Guidewire application indicating whether a message was successfully sent. This message can be a positive acknowledgment (ACK) indicating that the external system processed the message. Or, it can be a negative acknowledgment (NAK) indicating that the external system did not handle the message properly because of an error.

A policy that has not been canceled, not taken, expired, or non-renewed.

A template that standardizes the way Guidewire applications generate activities. Both Gosu classes and the InsuranceSuite application create activities based on activity patterns. Each pattern describes one kind of activity that might be needed in handling the policy or account process. Activity patterns contain many default, or typical, characteristics for each activity, such as the activity's name, its relative priority, and whether or not it is mandatory. When you create an activity, Guidewire applications use the pattern as a template to set the default values for the activity, such as Subject and Priority. You can override these defaults.

A document recording an alteration to a reinsurance contract.

Additional reserves added to a claim by the reinsurer above and beyond what the insurer that is ceding the claim has previously set.

A person or entity, other than the named insured, to whom the policy also affords some protection. The additional insured’s protection is limited to liability incurred by the specific role they occupy in relation to the named insured. For example, the additional insured might receive protection as a landlord, an architect working for the insured, or as a leasing company. Additional insureds appear only in relation to liability type coverages.

An entity, other than the primary insured, who has a financial interest in the insured property. Unlike an insured entity, an additional interest cannot file claims, collect payouts, or make changes to the policy. However, an additional interest received notifications about changes to the policy, such as cancellations, lapses, and renewals. For example, an additional interest might be a mortgagee on a building or a lien holder on a vehicle. Additional interests appear only in relation to property type coverages.

Losses such as those caused by aircraft, explosion, earthquake, storm, tempest, flood, burst water pipes, riot, strike, civil commotion, or malicious damage. Sometimes called Special Perils These perils are extensions that widen the scope of a basic insurance policy. Similar extensions might be available for other classes of insurance.

Any premium due to an insurer on an insurance policy over and above the initial premium. Typically, additional premium is a result of increased coverage, increased rates, retrospective rate calculations, or a premium audit.

A premium that can vary. An insurer retains the right to change the premium or premium rate structure on a class of insureds or business during the year. If it does so, then typically, it applies new rates to the new renewal policies.

A person who investigates and assesses claims on behalf of insurers. However, some policyholders can decide to appoint their own loss adjuster to assist them in making a claim. When used in connection with marine insurance, then the term means one who investigates and apportions general average losses on behalf of ship owners (an average adjuster).

Billing method where policy billing notices (invoices) are sent to the producer instead of the insured, who is then responsible for collecting premium payments and submitting them to the insurer. The producer bills the insured and makes payments to the insurer on an agreed-upon schedule. The producer completes a statement of insurance premiums due and sends it to the policyholder. The producer transmits the premium payment (minus commission) to the insurer. Agency billing combines amounts due for multiple policies into one producer statement submitted to the insurer.

In BillingCenter, the producer can select one of three bases on which to submit the premium payment to the insurer: item basis, statement basis, or account current basis.

A set of BillingCenter rules and attributes that specify how to control the agency billing cycle for a specific producer. The agency bill plan also includes whether the producer uses the account current or statement bill process.

A person holding an agency agreement with an insurer and who, for reward, carries on the business of arranging contracts of insurance as agent for one or more insurers. This agent is an Authorized Representative. Two types of agents sell insurance: independent agents, and exclusive or captive agents. Independent agents are self-employed, represent several insurance companies and are paid on commission. Exclusive or captive agents represent only one insurance company and can either work for a fixed salary or work on commission. An insurance company that uses exclusive or captive agents is a direct writer.

Property insurance covering losses arising from any accidental cause except those that the policy specifically excludes.

Internal name for the InsuranceNow Billing system (package name com.iscs.AR).

A term used to describe the recalculation of prior years’ loss experience. It describes what the underwriting results of a proposed contract would have been if that contract had been in force during the period in question.

Balance sheet accounts representing things of value held by the business, including cash, accounts receivable, furniture, and fixtures. In accounting, debits increase assets and credits decrease assets.

A review of the financial records of an insurers commercial insureds. This review helps determine premiums for risks in which the insurer bases premiums upon dynamic factors such as payroll, gross receipts, and so forth. Types of risks include business interruption, workers' compensation, manufacturing, contracting, product liability, and more. Auditors (employees of the insurer or independent contractors) survey the records of insured businesses to determine premium adjustments based on expenses and conditions stated in the policy. Typically, companies perform audits annually, after the policy period in question expires, and after the company considers the audited items to be final. If the audit determines that an insured's initial premium is too low, such as the estimates for audited exposures being lower than actuals, the audit results in an additional premium. If the audit shows that the initial premium was too high, then the insurer returns the excess part of the premium to the insured.

A method BillingCenter uses to determine invoice dates during charge invoicing. In bill date invoicing, the relevant invoice day specified on the account is used to establish the billing dates for account invoices. For example, the Every Other Week - Anchor Date setting is used for every other week invoicing. Due dates are then calculated by adding the lead time (specified in the associated billing plan) to the bill date.

An invoice status that indicates the invoice has been sent to the account.

A set of charges and related information that is created based on information in a billing request that has been received from the policy administration system.

In InsuranceNow, the module that handles premium booking transactions, payment plans, installment rolling, cash receipts and related billing activities. Package name com.iscs.AR)

A set of rules and attributes that specify certain aspects of invoice generation, disbursement handling, and payment requests. For example, a billing plan specifies the lead time to allow between the billing date and the due date on generated invoices. A billing plan is associated with an account.

A request that comes from the policy administration system to BillingCenter to bill one or more accounts for a given event. Typically, billing requests are created for policy transactions, such as submissions, policy changes, cancellations, reinstatements, or renewals. On receipt of a billing request, BillingCenter creates a billing instruction with a set of charges, slices the charges into one or more invoice items, and places the invoice items onto invoices.

A written agreement that the insurer provides to the insured to serve as evidence of coverage prior to the insured receiving official policy documents.

The process of converting an offered quote into a legally obligating contract to both the client (to pay premium) and to the insurer (to insure against losses).

Third-party injury liabilities, as distinguished from personal injury. Can also refer to a particular kind of coverage or to any injury claim.

A company's total assets minus intangible assets and liabilities, such as debt. A company's book value might be higher or lower than its market value.

An agent that, unlike an independent agent (who typically works primarily for a single insurance company), represents the client and can shop for polices across multiple insurance companies to find the best fit. Brokers typically work with more complicated commercial policies. Typically, a broker cannot directly bind coverage on a policy, meaning that they must work with an insurance company to finalize a sale.

Specific implementation of InsuranceNow to meet a customer's business requirements. Includes configuration, extension, integration, customization, and the current InsuranceNow release version.

See rule.

A policy that combines property, liability, and business interruption coverages for small to medium sized businesses. Coverage is generally cheaper than if purchased through separate insurance policies. The policy typically provides all the coverages that a small company would need: liability, property, and miscellaneous other coverages such as data or hardware coverages. It can also include a business auto component, such as hired auto coverage, but generally does not include workers’ compensation.

The termination of an in-force insurance contract by either the insured or the insurer. Termination can be voluntary, involuntary, or mutual in accordance with provisions contained in the contract.

An business entity that actually underwrites and issues the insurance policies. Carriers are responsible for assessing risk, setting premium rates, and ensuring that they have the financial reserves to pay out claims.

Contrast with an insurance company, which is a business entity that provides insurance policies to individuals and businesses. These companies design, underwrite, and sell insurance products, and they are responsible for paying out claims to policyholders

InsuranceNow makes a distinction between the insurance carrier and the insurance company. In many cases, they are the same entity, but in some instances, a carrier might underwrite policies that are sold by other companies or agents.

A way to resolve an agency bill exception by stating that the amount in question will be paid in the next billing cycle.

Losses to property, bodily injuries, or other losses caused by an accident.

A single incident or a series of closely related incidents causing severe insured property losses totaling more than a specified amount, for example, $25 million. In statistical recording terms, a catastrophe describes an event such as earthquake, storm, or flood that causes many losses that can all be linked to the same broader cause. Insurers track claims related to catastrophes for reporting (internal and regulatory) and to collect on catastrophe reinsurance. Insurers also frequently assign special teams to handle the large number of simultaneous claims in an expedited manner.

Categorizes the reason for loss. Some common examples are collision for vehicles, theft, or natural causes like hail, wind, earthquake, and flooding. Some companies also call these categories perils.

The fundamental BillingCenter invoicing unit that the policy administration system sends in a billing instruction. A billing instruction must contain at least one charge. BillingCenter then translates each charge into invoice items on an invoice or statement. Each charge includes the amount to be invoiced and a description.

The date BillingCenter receives the billing instruction that contains the charge. The charge date can influence how BillingCenter places invoice items on invoices.

The date that the coverage or coverage reduction specified by the charge takes effect. The charge effective date depends on the type of billing instruction. For a new policy, the charge effective date is the same as the policy period's effective date. For an existing policy, it is the same as the effective date of a billing instruction for an existing policy (such as a policy change or a cancellation). The charge date can influence how BillingCenter places invoice items on invoices.

A mechanism that prevents BillingCenter from continuing to bill the insured for any disputed amounts. A charge hold also prevents BillingCenter from charging late fees and from applying a delinquency to the account while there is an active dispute investigation in process.

The process of dividing charges into invoice items and assigning the items to invoices in an invoice stream.

A template for a charge that determines how BillingCenter handles the charge in terms of invoicing. For example, the Premium charge pattern specifies an invoicing approach of Down Payment and Installments whereas the Taxes charge pattern specifies an invoicing approach of One-time charge. BillingCenter associates each charge with a single charge pattern.

Categories of BillingCenter charge patterns. These include: General, Premium, Fee, Tax, and Recapture.

A type of transaction that reverses charges made in error instead of reversing an amount that cannot be collected. In this way, they relate somewhat to write-offs.

A general term referring to all the different losses that arise from a single incident and a single policy. It is possible that a single incident (a flood, for example) can affect many policyholders leading to many claims. However, all damages to a particular policyholder for the actual flooding event (injuries, damages to a building, lost or damaged furnishings, for example) fall under the same claim.

A claim can include a suffix to reference a discrete part of the claim or a specific exposure with a single type of loss. This term is sometimes used because these separate claimant and loss issues are frequently identified in old, legacy claims systems with a letter suffix. For example, 0034563B can indicate claim number 0034563 with suffix B for the second issue or “line” of the claim.

A person involved in a claim who requests compensation for a loss. This term often refers to third parties who make liability claims against the policyholder. However, the term can also indicate the policyholder in first party loss claims. Because it is possible to incur multiple types of losses from a single incident, it is possible to have multiple claimants for a single claim. However, an exposure can have only one set of claimants, either first party or third party, but not both.

An identifier for the type of risk. In workers’ compensation, the class code is four digits that identify the activities of the business, or more precisely its employees. In commercial auto, the class code describes the type of vehicle, its use and range of use. In general liability, the class code describes the type of business activities being insured. In the context of statistical reporting, it is a subset of the possible stat codes.

An additional asset or amount that the insurer requires of an insured to secure coverage for a new or renewed policy. The insured can satisfy the collateral requirement with cash, letters of credit (LOC), or a combination of both. The collateral deposit is subject to seizure in the event of delinquency.

A third-party organization that a insurer uses to collect unpaid funds. If an account becomes delinquent, an event in the delinquency process can trigger the assignment of a collection agency as the payer of past due invoices.

In BillingCenter, a collection agency is an account type.

Coverage for losses to the insured’s vehicle due to an accident, such as hitting another vehicle, a tree, or an animal.

Products designed for and bought by businesses. Among the major coverages are boiler and machinery, business income, commercial auto, comprehensive general liability, directors and officers liability, fire, and allied lines. These products can also include inland marine, medical malpractice liability, product liability, professional liability, surety and fidelity, and workers’ compensation.

You can purchase most of these commercial coverages separately, except for business income, which you can add only to a fire insurance (property) policy.

A single product that typically consists of two or more policy lines packaged together as a single policy. Included lines of business can be: commercial, general liability, commercial property, commercial auto, crime, boiler and machinery, and inland marine.

A percentage of the policy premium that is paid to a producer or insurance salesperson. The percentage varies widely depending on the coverage, the insurer, and marketing.

A set of rules and attributes that determine the amount of commission paid to a producer (or producers) after the producer sells a new policy or renews an existing policy.

Coverage for all other vehicle damage and contents, such as fire, theft, hail, vandalism, and so on.

Details of the contact information for an account. Each account must have a primary contact. The primary contact is either a business entity (company) or an individual associated with the account.

InsuranceSuite stores contact information in the application database (not in separate contacts database.)

A single policy term from the date the policy goes into effect (the effective date) to the date it expires (the expiration date). Generally speaking, a policy cannot have contractual periods that overlap in effective time. However, in some cases, it is possible for the contractual periods in a policy to overlap due to a policy cancellation or modification.

An exposure to risk. The intent of a policy is to mitigate that risk. A coverable is a tangible property item, a location, a jurisdiction, or the policy itself.

Within PolicyCenter, we make the policy line a coverable to represent the named insureds. PolicyCenter attaches coverages only to coverables.

Protection from a specific risk. There are two types of coverages: property and liability. To illustrate, on an automobile policy, a collision property coverage protects the insured's vehicle and a liability coverage protects the driver for damage done to another vehicle.

In PolicyCenter, coverages are always attached to a coverable.

The range of dates within which a policy provides coverage against insured losses. An insurer generally provides insurance against losses that occur during a specified period, regardless of the time that you discover or report the loss. Liability coverages usually provide coverage based on the date of the actual harm. Alternatively, the coverage period can be based on the date in which a claim is made against the insured. Coverage based on the date of the actual harm is the most common. Many insurance companies call a coverage based on the date in which the claim is made a Claims Made coverage. (Professional Malpractice Liability or Directors and Officers Liability occasionally makes use of this type of coverage.)

A container for either an agency bill statement or promise that is usually generated monthly for agency bill producers.

A subset of a data warehouse designed primarily to address a specific function or department's needs.

In InsuranceSuite, data marts are used to store and manage data related to various insurance operations, such as underwriting, claims, and policy administration. They enable users to run complex queries and generate reports to gain insights into business performance and trends.

In InsuranceNow, a data mart can include various tables from the core system, such as model beans and stat tables, and can be configured to exclude or include personally identifiable information (PII) in the data export stream. A data mart is optimized for general reporting purposes, allowing the use of standard SQL regardless of the reporting tool used. Data marts are populated by the Data Service, which is a multi-tenant microservice responsible for transferring data from the core Aurora database system of record to the Redshift reporting database. The data is structured in a way that makes it accessible for reporting purposes using tools like Looker.

One of multiple documents that define a policy that lists the selected coverages, limits and deductibles, endorsements, and premiums. Other documents include a boilerplate legal document and various additional pages for endorsements. The declarations page customizes the contract for the specific client. This is probably the only page of an insurance policy that most people ever read.

The amount of loss paid by the policyholder. Either a specified dollar amount, a percentage of the claim amount, or a specified amount of time that must elapse before benefits are paid. The bigger the deductible, the lower the premium charged for the same coverage.

A payment plan that spreads payments over a specified time period. Initially developed for multi-year (three- or five-year) policies, in which you could pay the premium in annual installments, as policy premiums increased, companies expanded this concept to include annual policies, in which the premium payment is made over the course of the year in quarterly or monthly payments.

An automatic or manual spawned process that launches and/or coordinates the steps necessary to cancel or reinstate a delinquent entity, and/or to write off the delinquent amount.

A set of rules or attributes that specify how to handle an account or policy period delinquency.

In BillingCenter, a delinquency plan defines a set of reasons for a delinquency. Each reason has an associated workflow that BillingCenter invokes when an account or policy period becomes delinquent, and the delinquency reason matches the reason in the delinquency plan.

The state of a policy, account, or producer that has past-due charges. This generally assumes the expiration of any grace period for paying the past due charges.

A type of payment plan where policy billing notices (invoices) are sent to the policyholder, who then pays the insurance company directly. The direct bill process also processes commission payments to producers on an agreed-upon schedule.

Insurance companies that sell directly to the public by using exclusive agents or their own employees, such as through the mail, on the internet, or by telephone. Large insurers, whether predominately direct writers or agency companies, are increasingly using many different channels to sell insurance. In reinsurance, direct writers are reinsurers that deal directly with the insurance companies they reinsure without using a broker.

Insurance that covers directors and officers of a company for negligent acts or omissions and for misleading statements that result in suits against the company. There are a variety of D&O coverages. Corporate reimbursement coverage indemnifies directors and officers of the organization. Side-A coverage provides D&O coverage for personal liability if the firm does not indemnify the directors and officers. Entity coverage, for claims made specifically against the company, is also available. You can also broaden a D&O policy to include coverage for employment practices liability.

A refund that returns funds from an account to a customer or producer. The disbursement has a trigger date (the creation date of the distribution).

In BillingCenter, the disbursement is also assigned a dollar amount and a due date (day of distribution.). Information specified in the billing plan associated with the customer account then triggers the distribution.

Specifies how BillingCenter handles an exception on an item when an agency bill payment or promise is executed. Options include Carry Forward, Exception, Writeoff, and Automatic.

Account-level logic that indicates how money is distributed if the amount received does not match the amount invoiced.

An accounting system in which every transaction has at least two balancing journal entries of debits and credits, with debits always equal to credits. Double-entry accounting keeps the accounting equation in effect and is the basis for all manual or automated accounting systems. Every transaction affects at least two accounts, since there must be at least one debit and one credit for each transaction. Entries that are not made to a balance sheet account are made to an income or expense account.

The last date an invoice can be paid before it becomes past due.

A method BillingCenter used to determine invoice dates during charge invoicing. In due date invoicing, the relevant invoice day specified on the account is used to establish the due dates for account invoices. For example, the Every Other Week - Anchor Date setting is used for every other week invoicing. Invoice dates are then calculated by subtracting the lead time (specified in the associated billing plan) from the due date.

The portion of premium that applies to the expired part of the policy period (in other words, the amount of premium that has been earned as of a given date). Insurance premiums are payable in advance, but the insurance company does not fully earn them until the policy period expires.

The date that an insurance policy becomes active or in-force.

The period of time that something is relevant and enforced within a contractual period, independent of the model time. For example, if you cancel a year-long auto policy as of August 1, the effective date for the auto policy is January 1 through July 31. This period is independent of the point at which you made this change in model time. See model time.

A method of moving money from one account to another by computer transfer.

A written form attached to an insurance policy that alters the policy’s coverage, terms, or conditions. These alterations can be extensions of coverage, new coverages, or reductions of coverage. For example, an endorsement can be a separate policy for a costly wedding ring that is not fully covered under a homeowners policy. You can also use endorsements to customize basic policy forms for the requirements of different states. In the insurance industry, many companies use the term endorsement to refer to a policy change. Other companies call a policy change a rider.

InsuranceSuite uses the term policy change instead of endorsement.

InsuranceNow uses the term endorsement to refer to a policy change.

A process that insurers use to track and monitor surplus or deficit payments collected from insureds. This is in contrast to the services provided as of specific dates in the lifecycle of the policy period.

Defines certain circumstances in which an insurer covers a normally excluded loss.

In the BillingCenter Agency Bill process, it is the differences between expected gross, net, and commission amounts listed on a producer’s monthly statements versus actual payments made by a producer.

Similar to a deductible, excess defines a minimum threshold above which the insurer provides compensation for losses. For example, insurers provide excess insurance for costs above the threshold for a single large loss or for total costs above the threshold for a time period, or stop loss.

A list of causes that are not covered. For example, a basic homeowners policy might exclude earthquake coverage in California unless the policyholder pays for additional coverage.

Likelihood of loss or the amount of risk associated with a claim or policy.

For claims, an exposure is an object used to track potential payments from a claim. The purpose of an exposure is to track a single coverage to a single claimant. An example of an exposure is the amount of collision coverage that is used to pay a claimant for damage to their vehicle in a personal auto claim.

For policies an exposure indicates an amount of risk, often identified by a class code and jurisdiction. An example of an exposure is a work site that has hazardous materials. General liability and workers' compensation policy lines base the policy premium partially on exposures.

The earned premium that is actually exposed to loss during a specified period of time.

In ClaimCenter, this earned premium is developed by disregarding the date on which premiums were booked and instead allocating the portion of the written premium exposed to loss (earned) to the exposure period. It makes this allocation regardless of whether the premiums were booked in a prior period, during the current period, or after the period. By using the exposure earned premium, ClaimCenter eliminates deficiencies with accounting earned premium that result from timing problems in the recording of the premium.

The listed items that are protected under a policy, or, more specifically, the units that are used for calculating premiums. The most common are vehicles in auto policies and locations in most other policies. For example, a 2018 Jaguar convertible will have a higher premium than a 2006 Honda Civic.

A process that is applicable to variable basis policies. A final audit contains the verified and ultimate cost for a variable basis policy. When the policy is issued, the estimated annual premium (EAP) is based on the policyholder’s best guess at the basis, such as payroll, for the entire policy year. The final audit is conducted at expiration or cancellation. A premium auditor reviews the policyholder’s records, or the policyholder officially reports the actual payroll amounts for the past policy term. The cost of the policy is recalculated using this actual basis amount, and the policyholder is billed or returned the difference.

The first recording of a claim. In workers’ comp claims, the first recording of a claim might be referred to as first report of injury (FROI). FNOL refers to both the process of informing the insurer of the loss and to a form often filled out to provide such information. The information can be entered by an adjuster or a claim intake worker, or it can be transferred electronically from an external system.

In ClaimCenter, we make sure that newly opened claims contain a certain minimum amount of information by passing them at the New Loss validation level.

Any loss incurred directly by the policyholder, including property damage or loss, injuries, and related costs. In some cases, a first-party loss includes repayment of minor costs associated with fixing the losses of others. For example, minor costs can include those associated with an injured guest at a party but for which the injured party does not actually file a claim. The key questions in this type of claim are whether the loss is covered and, if so, the amount of the loss for compensation.

Cancellation of a policy on its effective date as if it had never been issued. No coverage was provided and no premium is due.

The documents (template contracts) defining standard types of coverage and endorsements. A policy is made up of a series of forms plus a declarations page, which provides a summary of the benefits provided by the policy.

A feature that enables an insurer to offer a discount for an insured’s policy premium if full payment is made by a specified date.

Collection of all asset, liability, owners' equity, revenue, and expense accounts that itemizes all transactions for each account in the chart of accounts.

A policy component that covers a policyholder for broad categories of liability for third party losses. It is often a component of a commercial or homeowners policy

A circumstance that can increase the severity of a loss if it occurs. A hazard is also known as a risk. For example, a wood-shingled roof on a home in fire-prone Los Angeles is likely to make any fire damage more severe if a fire occurs. Typically, insurers consider these type of issues in the pricing of a coverage, or in considering whether to offer the coverage at all.

Insurers often separate risk into two areas: physical hazard and moral hazard. Physical hazard refers to the physical aspects of the risk that could make a loss more or less likely, or affect the severity of that loss. Moral hazard refers to the attitude and conduct of the insured. While physical hazard can nearly always be addressed by insurers through recommended risk improvements, policy conditions, and premium rate, moral hazard can be addressed only by declining the risk absolutely.

A charge for which the insured will not be billed until the hold is released.

In conjunction with trouble tickets, stops a charge from being automatically processed while an account or policy is in dispute. In InsuranceSuite, a hold blocks automated system behavior while an insurer investigates and corrects a billing problem.

A line of business. The typical homeowners insurance policy covers the house, the garage, and other structures on the property against a wide variety of perils including windstorms, fire, and theft. In addition, the policy usually includes the personal possessions inside the house such as furniture, appliances, and clothing. The extent of the perils covered depends on the type of policy. An all-risk policy offers the broadest coverage, covering all perils except those specifically excluded in the policy. Homeowners insurance also covers additional living expenses. Known as Loss of Use, this provision in the policy reimburses the policyholder for the extra cost of living elsewhere while the house is being restored after a disaster. The liability portion of the policy covers the homeowner for accidental injuries caused to third parties and/or their property, such as a guest slipping and falling down improperly maintained stairs. Coverage for flood and earthquake damage is excluded and must be purchased separately.

Payment in compensation for a loss. The goal is to restore a policyholder to the same financial position after the loss as that prior to the loss, without the policyholder profiting from the loss.

A line of business. This broad type of coverage was developed for shipments that do not involve ocean transport. It covers articles in transit by all forms of land and air transportation as well as bridges, tunnels, and other means of transportation and communication. Included in this category are floaters that cover expensive personal items such as fine art and jewelry.

A system to make large financial losses more affordable by pooling the risks of many individuals and business entities. An insurance company or some other large group accepts the pooled risks in return for a premium.

A collection of core applications for policy administration, billing, and claims management that are available both individually and as a bundled solution. Used together, InsuranceSuite enables seamless end-to-end insurance processes for P&C insurers across all lines of business.

Another name for policyholder.

The insurance company that provides a policy to the insured.

An audit process that may be triggered when there is a change to a policy period.

A commercial document issued by a seller to a buyer. Often called a bill, it indicates the products, quantities, and agreed prices for products or services that the seller has already provided to the buyer.

In BillingCenter, an invoice is an itemized bill requesting payment on a charge for a policy. An invoice indicates that, unless paid in advance, payment is due by the insured to the insurer according to the agreed terms.

The date an invoice is billed. Invoice date is also called billing date or statement date.

A line item that represents all or part of a charge. For example, a premium charge on a billing instruction can be divided into a down payment and monthly installments. The down payment and each installment becomes an item on an invoice. The total amount of the invoice items equals the total charge amount.

In BillingCenter, invoice items are added to invoices or producer statements.

A set of invoices.

In BillingCenter, all invoices are contained in an invoice stream. All invoice streams in the BillingCenter base configuration are spaced at a regular intervals such as monthly and twice monthly.

The name of a company that Guidewire acquired in 2017 and whose product is now known as InsuranceNow. This name still exists as a legacy term throughout InsuranceNow configuration code.

ISO (originally known as the Insurance Services Office) is the leading United States provider on information and standards for many types of insurance. ISO provides a service called ClaimSearch® which helps detect duplicate and fraudulent insurance claims. If an insurance company enters a claim, the company can send details to the ISO ClaimSearch service, and get reports of potentially similar claims from other companies.

In ClaimCenter ISO ClaimSearch is included as a built-in integration.

In InsuranceNow ISO ClaimSearch is provided as an optional integration.

The process of issuing all the formal paperwork for the policy, updating various policy and billing systems about the new policy, and delivering it to the insured.

The underlying part of the double entry accounting system that tracks all transactions by T-account owner.

Coverage up to specific limits for the cost of ransom or extortion payments and related expenses. This coverage is often bought by international corporations to cover employees. Most policies have large deductibles and can exclude certain geographic areas. Some policies require that the policyholder not reveal the existence of the coverage.

The number of days that must be allowed between the invoice billing date and the due date.

In BillingCenter, you can specify two different types of lead time. Lead Time is used in direct for billing the insured directly. Non Responsive Lead Time is used for automatic payments, with no response required of the customer.

Claims payments beyond those necessary to satisfy a typical claimant.

The underlying part of the double entry accounting system that tracks all T-accounts and line items associated with a T-account owner.

Insurance to cover the policyholder for legally obligated payments that result from bodily injury or property damage caused to another person.

A collection of functions that you can call from within Gosu programs. Guidewire provides a number of standard library functions (in gw.api.* packages, for example).

A maximum amount that will be paid by a coverage. Most coverages set a limit. Limits might be set on a per incident basis (a maximum payment per auto accident) or on an annual basis (a maximum total amount paid in any policy year).

In InsuranceNow, a model that represents a line of business and has the role of the parent bean. It holds child models for risks, coverages, limits, and deductibles.

An actual item expense.

Insurance industry term for a type of policy. Can refer to a set of related policy types that service a specific customer transaction or business need. Also referred to as a product.

Broadly refers to any type of loss, including any of the following:

• Repair or replacement costs for damaged or stolen property
• Costs associated with treatment of an injury, lost wages, and less tangible losses for pain and suffering, scarring, and so on
• Lost business revenues or extra costs associated with loss of use of a home, vehicle, or business property

Costs for the insurance company to investigate and resolve a claim. These costs include internal costs of salaries, equipment, supplies, and so on, and payments to third parties for inspection, litigation defense, and so on.

Indemnity payments made by the insurance company to the policyholder or to a third party on behalf of the policyholder.

List of claims that against the insured or insurable items on the policy, including claims paid by the current insurer and those that were reported by the agent on the application or through a data reporting service such as CLUE. Loss history is used for underwriting purposes and in some lines is a factor in rating. A loss history typically is a list of the claims that the insured has had on past policies, including those with different insurance companies.

An insurer's estimate of the amount an individual claim will ultimately cost. On an insurer's financial statement, it is the amount of estimated liabilities both for known claims that are not yet paid and for incurred claims that are not reported.

Coverage for goods in transit, and for the commercial vehicles that transport them, on water and over land. The term can apply to inland marine but more generally applies to ocean marine insurance. Covers damage or destruction of a ship’s hull and cargo and perils include collision, sinking, capsizing, being stranded, fire, piracy, and jettisoning cargo to save other property. Wear and tear, dampness, mold, and war are not included.

Another type of first-party medical coverage, thus similar to a PIP (personal injury policy). Also known as MedPay.

See medical payments.

A request for a change to an in-force policy.

A value used by the rating engine to adjust the policy quote (or some portion of the quote). Modifiers capture information relevant to the pricing of a policy that is not necessarily tied to a specific coverable or coverage.

Documentation pertaining to a driver’s driving history. It contains information such as identifying data, license status, convictions, traffic violations, accidents, license suspensions, and revocations on file with the driver’s home state. The information in this report usually comes from a state DMV (Department of Motor Vehicles) and can vary by state. Insurers typically use MVRs to evaluate the risks associated with a given driver. Violations are assigned point values, with more severe violations having a higher point value. High MVR point totals indicate high risk drivers and often result in higher policy premiums.

A United States organization of insurance regulators from the 50 states, the District of Columbia and the five U.S. territories. The NAIC provides a forum for the development of uniform policy when uniformity is appropriate.

The process of checking against one or more producer/account databases to ensure that a person or company is not an existing PolicyCenter account. This check ensures that another producer does not represent the person or company for the given policy type. PolicyCenter searches existing accounts for name clearance before it creates a new account.

An individual, business or organization that is specified in the declarations by name as the insureds under a policy. Other insureds may be covered without being named, but can be included for coverage as insureds or additional insureds by other provisions (as in the policy definitions). The named insured is responsible for premium payments, receipt of notices, and adjustment of losses.

A peril specifically mentioned as covered in an insurance policy.

An official notification of a policy cancellation effective on the anniversary of the starting date.

A U.S. insurance rating and data collection bureau specializing in workers' compensation.

The withholding of information from an insurer. If there has been non-disclosure prior to inception, then the insurer is able to cancel the contract and can possibly reduce its liability to the insured. If the non-disclosure was fraudulent, then the insurer has the right to void the contract from its inception. If the insured’s non-disclosure was innocent, then the insurer can still attempt to reduce its liability under the policy. However, the insurer must prove that, if it had known the true situation at the time, it would have structured the policy terms or premium or both differently. If proven, the insurer’s liability is reduced to an amount that puts the insurer in the same position it would have been in had the non-disclosure not occurred.

Non-disclosure is different from misrepresentation. Misrepresentation is the provision of information that is subsequently found to be incorrect.

Notification that the insured provides to the insurer that a loss has occurred.

The total net amount of premiums written by an insurer.

Policy changes or other jobs that are not bound in sequential order as compared to the effective dates of the already bound revisions. If the effective date of a new revision’s policy period is earlier than the effective date of a policy period of another revision within that period, the new revision is out of sequence. The effective date is the start of the effective date range. Guidewire calls any work order that creates this sequencing issue an out-of-sequence work order, and it applies to policy change, cancellation, and reinstatement jobs.

Another insurance industry term for these out-of-sequence items is out-of-sequence endorsements, but Guidewire avoids this term because of the other meaning of endorsement (see endorsement).

The day through which premium has been earned, used in calculating policy equity.

Actual payments to claimants, or to service providers on behalf of claimants, or to vendors for loss adjusting expenses.

In BillingCenter, a payment is a sum of money (a receipt) sent to an insurer to apply to a BillingCenter account. Payments consist of an insured receiving and paying an invoice, an automatic deduction for an installment payment, or a deposit on a new policy period that has not been invoiced.

The portion of a payment that is applied to a specific item.

A set of rules or attributes that detail the system converts charges on a billing instruction into individual invoice items. For example, a payment plan might specify that a premium charge is to be divided into a 10% down payment item and a maximum of 10 installment items.

A specific risk or cause of loss covered by an insurance policy, such as a fire, windstorm, flood, or theft. A named-peril policy covers the policyholder only for the risks named in the policy in contrast to an all-risk policy, which covers all causes of loss except those specifically excluded.

A single policy term from the date the policy goes into effect (the effective date) to the date it expires (the expiration date).

Injury inflicted by way of false arrest, invasion of privacy, malicious prosecution, and so on, as distinguished from bodily injury. It is written as Coverage B of the commercial general liability forms and as Coverage E in homeowners policies.

Portion of an auto insurance policy that covers the treatment of injuries to the driver and passengers of the policyholder’s car. In most cases, people have separate medical insurance that provides primary coverage for injuries. Also known as PIP.

Property or casualty insurance products that are designed for and bought by individuals, including homeowners and automobile policies.

First party coverage for losses to moveable items such as furniture, office equipment, or art, that is covered by a policy. Although high value items can be itemized, most coverage applies to all personal property contained in the covered building, such as the contents of the home.

Commonly refers to vehicle damage losses (as opposed to contents, injuries, and so on) in an automobile claim.

The date that determines on which invoice an invoice item is placed.

• If the account or policy models invoicing around due dates, BillingCenter places each invoice item on the earliest planned, non-ad hoc invoice whose due date is on or after the invoice item's placement date.
• If the account or policy models invoicing around bill dates, BillingCenter places each invoice item on the earliest planned, non-ad hoc invoice whose bill date is on or after the invoice item's placement date.

The BillingCenter container of different types of customizable plans. BillingCenter uses plans to automate and control many of its processes. These processes include administering bills, paying commissions to producers, starting delinquency processes, and customizing how payments are applied to accounts and policies.

A written contract for insurance between an insurance company and policyholder stating details of coverage. The policy defines the items or risks are being covered, the set of coverages has been purchased, and the time period of coverage. For example, a personal auto policy lists a set of vehicles and covered drivers. It also lists a set of coverages for: collision, comprehensive, towing, rental car, uninsured/underinsured motorist, medical payments, and liability.

In PolicyCenter, all versions of a single policy over multiple policy periods. For example, each time that you change an automobile policy, perhaps by adding a new driver or vehicle, PolicyCenter creates a new version of the policy. However, there is still only a single Policy entity for the policy.

Computer systems that contain the policies and all their histories. Such systems can vary in their breadth of functionality, but generally share certain characteristics. These characteristics include tracking policy data, managing policy versions, handling LOB variations, ties to billing systems, and meeting statutory reporting, notifications, and regulatory requirements.

The difference between the paid amount and the earned premium as of a given date.

One contractual period for a policy. The contractual period extends from the date the policy goes into effect, the effective date, to the date it expires, the expiration date. Depending on the insurance product, term lengths might range from a month to multiple years. Even if a product has a defined standard term length, the effective and expiration dates can shorten or increase the actual contractual period of coverage, the policy term.

The person or business entity that forms a contract with the insurer to insure risks. Typically, the policyholder is protecting themselves from losses to owned property, people, or liability for other people's losses.

In PolicyCenter, a single contract period within a policy. A policy can have multiple policy periods. For example, every time that you renew a policy, PolicyCenter creates a new contract covering the new time period. This action creates a new policy period. The policy period and its children (for example, Audit Schedule Items) represent data that describes the entire policy period, not just a single version of the policy.

The situation that arises when two concurrent changes are based on the same branch. When the second one finishes, you must merge changes from recently-bound jobs into the active job before binding the active job.

The price of an insurance policy, typically charged annually or semiannually. There are direct, earned, and unearned premiums.

A feature that enables you to manage a billing process in which insureds provide periodic reports to their Policy Administration System (PAS) that detail actual exposure that can change over time.

The name that appears as the policyholder on the declarations page. The primary named insured is the first named insured in the policy contract and receives the policy contract, notifications, and other documentation. Other named insureds can be defined for a policy. The primary named insured represents all named insureds with regard to contract requirements, contract changes, or termination. However, other named insureds are equally insured under the policy provisions.

A generic term for any third party who brings business to the insurer. Except in the case of captive agents, the client relationship is owned by the producer. Insurers pay commissions to the producer for bringing in new business and getting the clients to renew their policies. Insurers compete for the business through the producers, so both price and service to end clients and service and compensation to the producers matters. In BillingCenter, producers can participate in either agency bill or direct bill processes or both.

The policy administration system (PAS) can generate a set of codes and assign one or more of these codes to each agent or broker with which the insurer does business. This code is the key to transacting business with producers. For example, the terms of the contract with the producer and the payments made to the producer are all structured with producer codes.

In BillingCenter, the producer code associates a producer with a commission plan.

Payments to producers that include outgoing payments for commissions that can be processed either manually or automatically.

A bill that is sent to an agency bill producer. It provides a list of all of the producer’s invoices for a given month and indicates which payments the insurer expects from the producer for that month.

A document that an agency bill producer (agent) submits by using the BillingCenter Account Current process. The promise to pay describes the payments the producer expects to make to the insurer for the period.

A PolicyCenter branch (revision of a policy) that was made legally binding.

Refers to any owned real property or buildings, personal property, and vehicles. This term also refers to first party coverage for damage to buildings, such as homes or office buildings.

Covers damage to or loss of policyholders’ property and legal liability for damages caused to other people or their property. Property/casualty insurance, which includes auto, homeowners, and commercial insurance, is one segment of the insurance industry. The other sector is life/health. Outside the United States, property/casualty insurance is referred to as nonlife or general insurance. Guidewire creates insurance software for the P&C sector.

The estimated price of an insurance policy premium, typically provided to a customer for approval before binding into a policy.

The cost of a unit of insurance, usually per $1,000. Rates are based on historical loss experience for similar risks and can be regulated by state insurance offices.

An insurance policy that is classified as having a greater-than-average likelihood of loss. It usually is issued with special exclusions, a premium rate that is higher than the rate for a standard policy, a reduced face amount, or any combination of these.

The process of determining base pricing for an insurance application. It can also be the revised pricing for a policy after certain changes, such as adding coverage, reducing coverage, changing deductibles, or any other changes.

The six major credit agencies that determine insurers’ financial strength and viability to meet claims obligations. They are A.M. Best Co.; Duff and Phelps Inc.; Fitch, Inc.; Moody’s Investors Services; Standard and Poor’s Corp.; and Weiss Ratings, Inc. Factors considered include company earnings, capital adequacy, operating leverage, liquidity, investment performance, reinsurance programs, and management ability, integrity and experience. A high financial rating is not the same as a high consumer satisfaction rating.

The practice in which reinsurances are placed against one another. This practice ensures that a reinsured only places a share of its business with reinsurers who are willing to provide shares in their own treaties, and produces an equivalent volume of premium income. Reciprocity is normally confined to fire proportional business and is occasionally based on an equivalent profit exchange rather than premium income. Reciprocity is no longer practiced in Australia or New Zealand.

A general term that refers to all types of recouping some of the indemnity payments made on a claim. Recovery can mean salvage and subrogation.

The process by which an insurer puts back into force an insurance policy that has been terminated. Reasons for termination can include nonpayment of premiums.

Insurance bought by insurers. A reinsurer assumes part of the risk and part of the premium originally taken by the insurer, known as the primary company. Reinsurance effectively increases an insurer's capital and therefore its capacity to sell more coverage. The business is global and some of the largest reinsurers are globally based. Reinsurers have their own reinsurers, called retrocessionaires. Reinsurers do not pay policyholder claims. Instead, they reimburse insurers for claims paid.

The extension of the term of coverage of an expired policy, commonly by replacement with another policy effective on the date of expiration of the previous policy.

The process of renewing a policy. The goals are to:

• Minimize losses by eliminating policyholders with losses exceeding premiums.
• Maximize retention of a insurer’s best customers.
• Reduce expenses associated with the renewal process.

A form of insurance that covers a policyholder’s belongings against perils such as fire, theft, windstorm, hail, explosion, vandalism, riots, and others. It provides personal liability coverage for damage the policyholder or dependents cause to third parties. It also provides additional living expenses, known as loss-of-use coverage, if a policyholder must move while the dwelling is repaired. It also can include coverage for property improvements. Possessions can be covered for their replacement cost or the actual cash value that includes depreciation.

The cancellation or undoing of a contract and restoration of the parties to the position they occupied before the contract. A party can ordinarily rescind a contract in cases of fraud, misrepresentation or duress by the other party, and, in some cases, if a breach renders the contract worthless.

A company’s best estimate of the amount it will pay for claims. State regulations require insurance companies to err on the side of solvency. They also require them to be conservative in recording expected liabilities for claims that have been reported including claims that are not yet known but are statistically predicted.

In ClaimCenter, reserves are set for a specific exposure in order to estimate probable future payments.

The amount of risk retained by an insurance company that is not reinsured.

In PolicyCenter, the manner in which the system tracks changes to a graph of objects in a policy through time, both model time and effective time. See model time and effective time.

In PolicyCenter, a job that enables an agent to rewrite a policy. Policies are rewritten to make the types of changes that cannot be done in a policy change job, to correct significant errors, or to make changes to the policy. A rewrite, which can only occur on a canceled policy, effectively ends the first policy and creates a new one in its place.

Example: A customer requests a workers’ compensation policy. However, the policy that is delivered to the customer has many errors. The dates and payroll amounts are incorrect, and the building and location are in the wrong state. The customer notifies you, the agent. If you attempted to fix the errors by using a policy change job, PolicyCenter would send out an addendum, calling out the mistakes in the policy. But because there are so many mistakes in the policy, you decide to rewrite the policy, which sends out completely new policy documentation.

An attachment to an insurance policy that alters the policy’s coverage or terms. Sometimes known as an endorsement.

Uncertainty concerning loss. Also can refer to the person, items, property, and so on covered under an insurance policy that the insurer could potentially have to pay benefits towards.

A systematic use of available information to determine how often specified events might occur and the magnitude of their consequences.

The overall process of risk analysis and risk evaluation.

The process used to determine risk management priorities by comparing the level of risk against predetermined standards, target risk levels, or other criteria.

The culture, processes, and structures that are directed towards the effective management of potential opportunities and adverse effects.

In the PolicyCenter default configuration, the process of associating a product and period to a specific producer code. If a producer code risk-reserves a product to which you do not have access, then PolicyCenter displays the product status on the New Submission screen as Risk Reserved. In addition, PolicyCenter does not permit you to create new submissions for that product.

Classification of a risk on a specific policy that determines the set of questions that InsuranceNow presents to the user to gather information about the risk.

The ratio of reinsurance premium paid to the reinsurance limit.

The short name for a business rule.

In InsuranceSuite, rules are written in Gosu and created within the Guidewire Studio application. It is a single decision in the following form: if {some conditions} then {take some action}.

In InsuranceNow, rules are configuration code that performs specific processing within a line of business using either Apache Velocity language or Java classes.

In InsuranceSuite, a set of individual rules with common functionality that have been combined into a group.

For example, in ClaimCenter, the Claim Segmentation rule set contains the rules that determine how to categorize a claim. ClaimCenter runs rule sets against various objects, such as running the Claim Segmentation rule set on a claim to make decisions on how to categorize the claim. At various points, each Guidewire application runs different rule sets to make decisions about its objects.

Damaged property an insurer takes over to reduce its loss after paying a claim. Insurers receive salvage rights over property on which they have paid claims, such as badly-damaged cars. Insurers that paid claims on cargoes lost at sea have the right to recover sunken treasures. Salvage charges are the costs associated with recovering that property.

A list of individual items or groups of items that are covered under one policy, or a listing of specific benefits, charges, credits, assets, or other defined items.

The concept of assuming a financial risk oneself, instead of paying an insurance company to take it on. Every policyholder is a self-insurer in terms of paying a deductible and co-payments. Large firms often self-insure frequent, small losses, such as damage to their fleet of vehicles or minor workplace injuries. However, to protect injured employees, state laws set out requirements for the assumption of workers compensation programs. Self-insurance also refers to employers who assume all or part of the responsibility for paying the health insurance claims of their employees. Firms that self insure for health claims are exempt from state insurance laws mandating the illnesses that group health insurers must cover.

A unit of functionality provided by a software application or system. Services are designed to perform specific tasks or operations and can be accessed by other components, modules, or applications. Services often follow the principles of service-oriented architecture (SOA) or microservices architecture, where functionality is modularized into independent, loosely coupled services. Examples of services in programming include web services (such as RESTful APIs), microservices, database services, authentication services, and various other components that provide specific capabilities within a larger software system. The concept of services is fundamental to the development of scalable, modular, and maintainable software architectures.

A component or module that is responsible for managing the communication, processing, and coordination of requests or events related to a specific service. The term is often used in the context of service-oriented architectures (SOA), microservices, or event-driven systems. A service may call several service handlers. The service handler, in turn, call Helper Classes to do the actual work. Typically, little or no business logic is contained in the service handler.

In PolicyCenter, viewing only a PolicyPeriod object’s subobjects at a specific effective date and hiding entities that are not effective at that date.

In ClaimCenter, a saved duplicate of a claim taken at the time it was added to the system.

Creating a set of two or more receivables associated with a single transaction. For example, binding a workers’ compensation policy is a single transaction, but it might insure multiple locations. Further, the insured might want each location to be invoiced separately. This requirement would mean that the billing system must split the total amount due into several invoices, each of which would be tracked separately. Split billing does not relieve the main account holder from responsibility that the account remain in good standing.

A producer statement that is generated when an agency bill relationship exists between the insurer and the producer. The monthly statement provides details of how much the producer expects to pay the insurer for income generated from a set of agency bill polices associated with the producer.

A provision in an insurance policy that cuts off an insurer’s losses at a given point. In effect, a stop loss agreement guarantees the loss ratio of the insurer.

The legal process by which an insurance company, after paying a loss, seeks to recover the amount of the loss from another party who is legally liable for it. For example, the insurer pays for repairs for a policyholder's car. It then tries to collect these costs from the insurance company of another person who was at fault in the accident.

An extra charge, typically when an insurer feels that standard rates are not sufficient for a single policyholder. The policyholder may be offered insurance only if they will accept a surcharge added to the premium. Some taxes are also referred to as surcharges.

Alternatively, a tax such as a regulatory charge enacted into law for a particular purpose in a particular jurisdiction. In essence, a tax that is collected for a particular time period for a certain defined purpose.

The part of a payment that is reserved for a specific policy before receiving the policy details or the related charge. Also refers to any monies that need to be allocated but cannot be categorized at the current time.

A payment that is recorded for an account or policy that does not yet exist in the system.

The system that contains the authoritative copy of a record.

In PolicyCenter, the system of record can be either PolicyCenter or an external system that the application interfaces with.

For example, if PolicyCenter is the SOR for a policy revision, then it has the authoritative copy. If PolicyCenter is not the SOR, it can have a copy of the policy revision, but the another system has the authoritative copy. If it is not the SOR during a specific time period for a policy, PolicyCenter checks with the external policy administration system to get the most recent policy data.

Financial accounts that record a set of transactions and associated line items within the accounting subsystem. BillingCenter automatically creates the underlying accounting structure for all accounts and policies, including the appropriate T-accounts. The term T-account originated from the fact that T-accounts are in the shape of a T. The account name appears at the top, with debits on the left and credits on the right. In BillingCenter, the TAccount entity owns the financial transactions related to an account. In ClaimCenter, T-accounts are hidden entities used to store rolled-up totals for the transactions on a particular ReserveLine or RICoding. Your configuration code must not directly change data on T-accounts or related entities in ClaimCenter.

The term of the policy period, which always starts with 1 and then increments by 1 for every renewal or rewrite.

In the PolicyCenter integration with BillingCenter, the base configuration uses the term number instead of the model number to identify a policy term.

In a claim, liability of the policyholder to another party for causing harm through negligence or some other fault in an accident. The insurance company covers the cost of this liability on behalf of the policyholder up to the coverage limit. The insurance company also covers the cost of defending the policyholder in any lawsuits that arise out of a dispute over liability. The key issues in this type of claim are:

• Whether the policyholder is covered for this type of liability.
• Whether the insured is liable for the other person's loss, including the amount of any loss for compensation.

A component of the InsuranceNow user interface that visually divides a window into labeled sections. Documentation refers to these division as panels; however, historically and within configuration code, these components are referred to as tiles.

Any type of financial change or movement.

A process that identifies, tracks, and solves an insured’s complaint within InsuranceSuite. Trouble tickets can be associated with an account (or multiple accounts), specific transactions on a policy, and/or producers.

A type of policy that provides coverage for losses above the limit of an underlying policy or policies such as homeowners and auto insurance. While it applies to losses over the dollar amount in the underlying policies, terms of coverage are sometimes broader than those of underlying policies.

A specific type of T-account that contains funds received from an insured for payment but not yet applied to a payment.

A person responsible for selecting and profitably pricing business, consistent with the insurance company’s internal guidelines.

The process of selecting and profitably pricing business, consistent with the insurance company’s internal guidelines.

The name of the department within an insurance company responsible for selecting and profitably pricing business, consistent with internal guidelines.

A legal entity that is empowered to file insurance rules, forms, and rates. Insurance companies can have many of these legal entities to support different lines of business, different marketing channels, different risk appetites, and so on. There might be no physical presence or representation for an underwriting company beyond its name appearing on an insurance policy.

A group or department of employees within a company working on underwriting.

The portion of a premium representing the unexpired part of the policy period, calculated by deducting the earned premium from written premium. Since coverage has not yet applied to the unexpired period, the insurer has not yet earned that portion of the premium.

A method that insurers can use to waive their right to collect damages from a party.

A voluntary association of statutorily authorized or licensed rating, advisory, or data service organizations that collects workers’ compensation insurance information in one or more states. The WCIO is composed of the managers of the various boards and jurisdictions. Their purpose is to provide a forum for the exchange of information about workers' compensation insurance. The WCIO has developed standards for the electronic transmission of information between insurers and rating/advisory organizations. These specifications are available for policy information, unit statistical reporting, experience modifications, detailed claim information, and individual case reports.

A line of business that covers a company's liability for injuries or illnesses caused by the workplace. Regulated by the state, workers’ compensation is required coverage in place of a worker being able to bring a liability claim against the employer through normal legal channels. It covers medical and recovery expenses as well as wages lost due to the injury.

A process that can cancel assets held in the charge invoicing T-Accounts, in particular those in anticipation of future payments from insureds. A write-off removes from the account balance the (usually very small) amount that the insurer does not expect to collect from the insured. It reduces the value of an asset by the amount of the loss. The uncollected amount that is written off is recorded as an expense.

The premium charged by an insurance company for the period of time and coverage provided by an insurance contract. Written premium depicts the amount of money placed on the books for the entire policy. Earned premium is the amount of premium that corresponds to the exposure covered over the life of the policy.