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National Association of Insurance Commissioners (NAIC)
An association of insurance commissioners from the 50 US states, DC, and the 5 US territories and possessions, whose purpose is to coordinate insurance regulation activities among the various state insurance departments.
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Model law
A document drafted by the NAIC in a style similar to a state statute, that reflects the NAIC's proposed solution to a given problem or issue and provides a common basis to the states for drafting laws that effect the insurance industry. Any state may choose to adopt the model bill or adopt it with modifications.
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Model regulation
A draft regulation that may be implemented by a state insurance department if the model law is passed.
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Domestic insurer
An insurer doing business in the jurisdiction in which it is incorporated.
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Foreign insurer
An insurer licensed to operate in a state but incorporated in another state.
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Alien insurer
An insurer domiciled in a country other than the US.
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Capital stock
A balance sheet value that represents the amount of funds that a corporation's stockholders have contributed through the purchase of a stock.
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Paid-in surplus
The amount stockholders paid in excess of the par value of the stock.
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Reciprocal insurer
An insurer owned by its policyholders, formed as an unincorporated association for the purpose of providing insurance coverage to its members (called subscribers), and managed by an attorney-in-fact. Members agree to mutual insure each other, and they share profits and losses in the same proportion as the amount of insurance purchased from the exchange by that members.
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Insolvency
A situation in which an entity's current liabilities (as opposed to its total liabilities) exceeds its current assets.
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Guaranty fund
A state-established fund that provides a system for the payment of some of the unpaid claims of insolvent insurers licensed in that state, generally funded by assessments collected from all insurers licensed in that state.
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Good-faith claim handling
The manner of handling claims that requires an insurer to give consideration to the insured's interests that is at least equal to the consideration it gives its own interest.
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Bad faith (outrage)
A breach of the duty of good-faith and fair dealing.
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Mortgagor
The person or organization that borrows money from a mortgagee to finance the purchase of real property.
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Advisory organization
An independent organization that works with and on behalf of insurers that purchase or subscribe to its services.
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Prospective loss costs
Loss data that are modified by loss development, trending, and credibility process but without considerations for profit and expenses.
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