This page provides a glossary of key terms and definitions commonly used in the insurance industry.
A relationship between two entities, typically an insurance agency and an insurance carrier, where the agency represents and sells insurance products offered by the carrier.
A financial product sold by insurance companies that provides a stream of income payments in exchange for a lump-sum payment or a series of payments.
An insurance agent who exclusively represents a single insurance carrier and sells only the products of that carrier.
The practice of an insurance agent or broker persuading a policyholder to cancel an existing insurance policy in order to purchase a new one, often to generate additional commissions.
A unique, five-digit identification assigned by the NAIC to all insurance companies for filing financial data.
The state in which an insurance producer is primarily licensed and where they must comply with licensing requirements.
A report providing comprehensive information on insurance transactions, policies, claims, and other relevant details.
The state or jurisdiction where an insurance company is incorporated and maintains its legal headquarters.
An individual appointed by an insurance agency or brokerage who is responsible for ensuring compliance with insurance regulations and overseeing the activities of other licensed producers.
Professional liability insurance that protects insurance agents, brokers, and agencies against claims of negligence or inadequate work.
The specialty market that insures difficult, novel, or higher risk things that many standard carriers do not cover. E&S companies are typically fast-moving and maintain flexibility to adapt to market changes.
An insurance agent who works exclusively for a single insurance carrier and is prohibited from selling products from other carriers.
A unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses for tax identification purposes.
An entity that provides marketing, sales, and administrative support to insurance agents and agencies, typically specializing in specific insurance products or market segments.
Licenses held by insurance producers that are not currently active due to non-renewal, suspension, or other reasons.
Insurance agencies that represent multiple insurance carriers and offer a variety of insurance products to consumers.
A professional responsible for investigating insurance claims, determining the extent of coverage, and negotiating settlements with policyholders.
A business that sells insurance products and services on behalf of one or more insurance carriers.
A licensed intermediary who represents insurance buyers and assists them in purchasing insurance coverage from insurance carriers.
An insurance company that underwrites insurance policies and assumes the risk of loss in exchange for premiums.
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The primary types of insurance products offered by insurance carriers, such as property, casualty, life, health, and annuities.
Insurance distribution management is the process of leveraging integrated solutions to streamline the distribution of insurance products, ensure compliance, and support producers.
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An individual or entity licensed to sell insurance products and services to consumers on behalf of insurance carriers.
An appointment process where an insurance producer is appointed by an insurance carrier immediately before completing a transaction, ensuring compliance with regulatory requirements.
Authorization is granted to an insurance producer by a state insurance department to sell specific types of insurance products.
The primary categories of insurance products, including property, casualty, life, health, and annuities.
An independent entity with specialized expertise authorized by an insurance carrier to underwrite and manage insurance policies on behalf of the carrier. Many MGAs operate in the E&S or specialty lines market.
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Similar to an MGA, an MGU is an entity that specializes in underwriting risks on behalf of insurance carriers.
An organization composed of insurance regulators from all 50 U.S. states, the District of Columbia, and five U.S. territories, responsible for developing model insurance laws and regulations.
A nonprofit organization that provides online services for insurance producers, including licensing and appointment applications.
A unique identifier assigned by the NIPR to insurance producers for licensing and regulatory purposes.
A search tool provided by the NIPR to verify the licensing status and credentials of insurance producers using their National Producer Number.
Insurance products designed to cover the personal property and liability risks of individuals and families, such as auto, homeowners, and renters insurance.
A centralized database containing information about licensed insurance producers, maintained by state insurance departments or regulatory authorities.
The period during which an insurance policyholder can reinstate a lapsed insurance policy without reapplying for coverage, typically subject to certain conditions and requirements.
The practice of insurance companies transferring a portion of their risk to other insurance companies, known as reinsurers, to mitigate their exposure to large losses.
The illegal practice of offering customers something of value, such as cash or gifts, as an inducement to purchase an insurance policy.
A fee imposed by a state on insurance companies domiciled in other states if those states impose higher fees or taxes on insurance companies domiciled within their jurisdiction.
The financial ability of an insurance company to meet its obligations to policyholders by having sufficient assets to cover liabilities and claims.
A U.S. government agency responsible for regulating the securities industry, including insurance products with investment components.