Insurance Glossary

IDENTITY THEFT INSURANCE

Coverage that reimburses expenses incurred as a result of identity theft. This may include costs for notarizing fraud affidavits, certified mail, lost wages from time off work, legal fees, and expenses related to restoring credit or clearing fraudulent judgments.

IMMEDIATE ANNUITY

An annuity purchased with a lump sum, typically at or after retirement, that begins making income payments within approximately one year. Immediate annuities may be fixed or variable.

INCURRED BUT NOT REPORTED LOSSES (IBNR)

Losses that have occurred but have not yet been reported to the insurer, as well as estimates for reported claims where the final cost is not yet known. Insurers regularly adjust reserves for IBNR as new information becomes available.

INDEMNIFY

To provide financial compensation for covered losses under an insurance policy.

INDEPENDENT AGENT

An insurance agent who is self-employed, paid on commission, and represents multiple insurance companies.

INDIVIDUAL RETIREMENT ACCOUNT (IRA)

A tax-advantaged retirement savings account available to individuals who are self-employed, have limited income, or whose employers do not offer retirement plans. Roth IRAs may offer additional tax benefits.

INFLATION GUARD CLAUSE

A policy provision that automatically increases a homeowners insurance dwelling limit at renewal to keep pace with rising construction costs.

INLAND MARINE INSURANCE

Coverage for property in transit over land or air and for movable or specialized property such as equipment, fine art, and jewelry. Despite its name, it does not involve ocean transport.

INSOLVENCY

An insurer’s inability to meet its financial obligations. State regulators may place an insurer in conservatorship, rehabilitation, or liquidation if insolvency is threatened.

INSTITUTIONAL INVESTOR

An organization such as a bank, insurance company, or pension fund that invests large sums of money in securities.

INSURABLE RISK

A risk that meets criteria allowing it to be insured, including being definable, accidental, part of a large group of similar risks, and capable of being priced by an insurer.

INSURANCE

A risk management system in which individuals or businesses transfer the financial risk of loss to an insurer in exchange for a premium.

INSURANCE POOL

An arrangement in which multiple insurers combine resources to provide coverage for large or high-risk exposures that may be difficult to insure individually.

INSURANCE REGULATORY INFORMATION SYSTEM (IRIS)

A financial monitoring system developed by the National Association of Insurance Commissioners that uses financial ratios to assess insurer solvency.

INSURANCE SCORE

A confidential rating based on credit-related information used by some insurers to help underwrite and price insurance policies. It does not include income or demographic data.

INSURANCE-TO-VALUE

Insurance written for an amount that closely approximates the actual value of the insured property.

INTEGRATED BENEFITS

A coverage concept that combines workers compensation and general health insurance by eliminating the distinction between occupational and non-occupational injuries.

INTERMEDIATION

The process of connecting savers, investors, and borrowers so funds can be efficiently allocated through financial markets and institutions.

INTERNET INSURER

An insurance company that sells policies exclusively through online channels.

INTERNET LIABILITY INSURANCE

Coverage that protects businesses against liabilities arising from online activities, including privacy violations, defamation, and copyright infringement.

INVESTMENT INCOME

Income generated from the investment of an insurer’s assets. Along with underwriting results, investment income is a primary source of insurer profitability.