Insurance Handbook - Alaska Department of Community and ...

Glossary
and beyond reserves, protecting policyholders
against an unexpected or catastrophic
situation.
POLITICAL RISK INSURANCE
Coverage for businesses operating abroad
against loss due to political upheaval
such as war, revolution, or confiscation of
property.
POLLUTION INSURANCE
Policies that cover property loss and liability
arising from pollution-related damages,
for sites that have been inspected and
found uncontaminated. It is usually written
on a claims-made basis so policies pay
only claims presented during the term of
the policy or within a specified time frame
after the policy expires. (See Claims made
policy)
POOL
See Insurance pool.
*PRE-EXISTING CONDITION
(1) According to most group health insurance
policies, a condition for which an
individual received medical care during
the three months immediately prior to the
effective date of her coverage. (2) According
to most individual health insurance
policies, an injury that occurred or a sickness
that first appeared or manifested itself
within a specified period—usually two
years—before the policy was issued and
that was not disclosed on the application
for insurance.
PREFERRED PROVIDER
ORGANIZATION
Network of medical providers which charge
on a fee-for-service basis, but are paid on a
negotiated, discounted fee schedule.
*PREFERRED RISK CLASS
In insurance underwriting, the group of
proposed insureds who represent a signifi-
114 I.I.I. Insurance Handbook www.iii.org/insurancehandbook
cantly lower than average likelihood of loss
within the context of the insurer’s underwriting
practices. Contrast with Declined
risk class, Standard risk class and Substandard
risk class.
PREMISES
The particular location of the property or a
portion of it as designated in an insurance
policy.
PREMIUM
The price of an insurance policy, typically
charged annually or semiannually. (See Direct
premiums; Earned premium; Unearned
premium)
*PREMIUM REDUCTION OPTION
An option, available to the owners of
participating insurance policies, that allows
the insurer to apply policy dividends
toward the payment of renewal premiums.
(See Dividend; Policy dividend options)
PREMIUM TAX
A state tax on premiums paid by its
residents and businesses and collected by
insurers.
PREMIUMS IN FORCE
The sum of the face amounts, plus dividend
additions, of life insurance policies
outstanding at a given time.
PREMIUMS WRITTEN
The total premiums on all policies written
by an insurer during a specified period of
time, regardless of what portions have been
earned. Net premiums written are premiums
written after reinsurance transactions.
*PRIMARY BENEFICIARY
The party designated to receive the proceeds
of a life insurance policy following
the death of the insured. Also known as
first beneficiary. (See Contingent beneficiary)