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cost accumulation
The process of capturing all of a co's costs and categorizing them in meaningful ways.
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investment expenses
The costs accociated with investing a co's assets.
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general and administrative expenses
The costs accociated with undertaking normal business activities to generate sales of products and to support products.
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expenses for contractual benefits
The total amount an insurer must pay to fulfill the terms of its insurance & annuity contracts.
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operating expenses
The costs of ops other than expenses for contractual benefits.
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development expense
An expense an insurer incurs in designing, testing, and implementing a new product line.
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acquisition expense
An expense an insurer incurs to obtain and issue new business.
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maintenance expense
A product related expense an insurer incurs while a contract is in force.
aka renewal expense
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overhead expense
Cost incurred during normal business ops that is not directly connected to a specific product or service.
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direct expense
A product expense incurred for or physically traceable to a specified life ins or annuity product.
aka traceable cost
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indirect expense
A product expense that can NOT be traced to or that is not incurred for one specific product.
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variable expense
An expense amount that varies in direct proportion to some variation in a specified level of operating activity.
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fixed expense
exp amt is constant regardless of # policies sold or some other measure of the level of operating activity
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rightsizing
The elimination of nonessential empees or jobs in an org.
aka downsizing.
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straight-through processing
the automation of the steps in industry specific transactions electronically, with little or no manual intervention.
aka end-to-end processing
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first-year commission
a stated percentage of the amount of the premium an insurer receives during the first policy year.
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renewal commission
commission on policies that remain in force that is equal to a stated percentage of ea premium paid for a specified number of yrs after the first policy year.
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heaped commission schedule
a commissn sched that has a high first year comm. and lower renewal comm.'s.
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vested commission
comm. guaranteed payable to producer, whether or not the producer represents the co. when the comm. becomes due.
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nonvested commission
comm payable to producer only if he STILL represents the co. when the comm. becomes due.
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conditionally vested commission
A comm. that becomes vested only AFTER agent reaches a certain age or # of years of service with the co.
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Persistency Bonus
In producer compensation, a bonus for good persistency results; can be used as a alternative to a production bonus.
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Deposit-based commission schedule
For annuity sales, a commission sched that pays comm's only on premium PAYMENTS made by annuity owners.
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asset-based commission schedule
For annuity sales, comm. sched. where comm's are a PERCENTAGE of the ACCUMULATED VALUE of a deferred annuity contract's funds.
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process
A series of ongoing activities directed toward achieving a goal.
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benchmarking
a process of (1)identifying best outcomes of other co. for a specific activity or process & the practices that produced those outcomes, and (2) implementing the best ones to = or surpass them.
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total quality management (TQM)
The process of creating an organizational culture committed to continuous improvement.
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kaizen
The Japanese word for continuous improvement; refers to improving a system by constantly improving the little details.
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quality control circle
A voluntary problem-solving group of 5-10 empees from the same work area who meet regularly to discuss quality improvement and ways to reduce costs.
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Six Sigma
A disciplined approach for improving quality by reducing process defects or correcting problems so that results fall within customer specifications.
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root-cause analysis (RCA)
A set of problem solving methods and tools that attempts to find the actual causes that led to an incident that that it can be corrected or removed.
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lean management
A quality improvement method that emphasizes teams or "cells" that process work with fewer hand-offs, greater speed, and better communication.
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business process reengineering
A comprehensive and systematic analysis and redesign of a org's work processes.
aka reengineering
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