Glossary
Insurance Terms Glossary
This page provides a glossary of insurance terms and definitions that are commonly used in the insurance business. New terms will be added to the glossary over time.
The definitions in this glossary are developed by the NAIC Research and Actuarial Department staff based on various insurance references. These definitions represent a common or general use of the term. Some words and/or phrases may be defined differently by other entities, or used in a context such that the definition shown may not be applicable.
Terms beginning with R
- Rate
- – value of insured losses expressed as a cost per unit of insurance.
- Risk Based Capital (RBC) Ratio
- – ratio used to identify insurance companies that are poorly capitalized.
- Rebate
- – a refund of part or all of a premium payment.
- Reinsurance
- – a transaction between a primary insurer and another licensed (re) insurer where the reinsurer agrees to cover all or part of the losses and/or loss adjustment expenses of the primary insurer.
- Reinsurer
- – company assuming reinsurance risk.
- Renewable Term Insurance
- – insurance that is renewable for a limited number of successive terms by the policyholder and is not contingent upon medical examination.
- Renters Insurance
- – liability coverage for contents within a renter's residence.
- Replacement Cost
- – the cost of replacing property without a reduction for depreciation due to normal wear and tear.
- Reported Losses
- – Includes both expected payments for losses relating to insured events that have occurred and have been reported to the insurance company, but not yet paid.
- Reserve
- – A portion of the premium retained to pay future claims
- Residual Market Plan
- – method devised for coverage of greater than average risk individuals who cannot obtain insurance through normal market channels.
- Retention
- – a mechanism of internal fund allocation for loss exposure used in place of or as a supplement to risk transfer to an insurance company.
- Retrocession
- – the portion of risk that a reinsurance company cedes or amount of insurance the company chooses not to retain.
- Retrospective Rating
- – the process of determining the cost of an insurance policy based on the actual loss experience determined as an adjustment to the initial premium payment.
- Rider
- – an amendment to a policy agreement.
- Risk
- – Uncertainty concerning the possibility of loss by a peril for which insurance is pursued.
- Risk Retention Group
- – group-owned insurer organized for the purpose of assuming and spreading the liability risks to its members.
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