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Glossary

365ths Method

Method for calculating Earned Premium as the total premium multiplied by the number of days elapsed over 365.

Glossary

Accelerated Critical Illness Benefit

This benefit is provided when a policy pays the sum insured upon death or diagnosis of a critical illness, whichever occurs first. If the life assured suffers a critical illness which are specified in the policy, then the sum assured is paid and the policy is terminated, i.e. payment of benefit is accelerated forward from payment on death. Some policies accelerate a portion of the sum assured in which case the contract stays in force and pays the balance of the sum assured upon subsequent death. Most policies accelerate 100% of the sum assured.

Glossary

Accident Year

This refers to the twelve-month period (starting January 1) that is used in accident year experience.

Glossary

Accountable Care Organization (ACO)

A group of health care providers who give coordinated care, chronic disease management, and thereby improve the quality of care patients get. The organization's payment is tied to achieving health care quality goals and outcomes that result in cost savings.

Glossary

Accounting Standards

Principles that guide and standardize financial accounting practices, such as how a firm prepares and presents its business income, expenses, assets and liabilities. Examples of accounting standards are: Statutory accounting practices (Stat) Generally Accepted Accounting Principles for financial reporting (GAAP) International Financial Reporting Standard (IFRS)

Glossary

Accrual Rate

The rate at which benefits increase for each unit of benefit service in a defined benefit scheme.

Glossary

Accrued Benefits

The benefits that will be paid at regular retirement age for service up to a given point in time, whether vested rights or not. They may be calculated in relation to current earnings or projected earnings.

Glossary

Accrued Interest

Interest earned but not received (realized). For example, bonds usually pay interest every six months in form of coupon, therefore interest accrues between one interest payment and the next. The buyer of a bond pays its market value plus the interest earned up to the settlement date of the coupon.

Glossary

Acquisition Costs

Costs that the Ceding Company expends to sell insurance, such as underwriting and commissions. This also refers to the cost insurance companies incur to write new policies and/or renew existing policies. Some of these costs can be deferred in accounting (Deferred Acquisition Cost or DAC in IFRS or US GAAP, DAC Tax for tax purposes)

Glossary

Active Member

An active member is a pension plan member who is making contributions (and/or on behalf of whom contributions are being made) and is accumulating assets.