Glossary

Target risk refers to a list of items excluded because they are outside of the risk appetite in reinsurance or certain types of insurance policies. An example of this in property would be a list of bridges, tunnels, fine arts collections, and property of similarly high value that is excluded from coverage under reinsurance treaties. Such risks require individual acceptance under facultative contracts.

Tariff In international insurance refers to rates and coverages set and published by the rating bureau having jurisdiction. The rating bureau may be controlled either by an association of companies or by a foreign government.

Tax acceleration refers to taking a tax deduction when an expense is incurred rather than when paid in a subsequent period. This results in an immediate temporary decrease in tax expense and a permanent increase in after-tax income, on a net present value basis, by an amount determined by the length of the acceleration period.

Tax harmonization is a euphemistic term for tax increases, promoted by governments in high-tax jurisdictions, in an effort to encourage other jurisdictions to follow their taxing policies, so eliminating "tax havens" for internationally mobile businesses.

Tax interruption coverage is for governmental entities that have taxing authority. It covers the government's potential loss of income when the property of others, subject to a property or sales tax, is destroyed. A specialized policy can be purchased in the excess and surplus lines market for this protection. Some public entities have also used the contingent business interruption form for this purpose.

A tax multiplier is a component of a retrospective rating plan that represents the costs associated with taxes, assessments, and other fees that the insurer must pay to the states on premiums written and collected.

Tax opinion insurance refers to insurance policies designed to cover costs arising from a specific tax position taken by an insured that is successfully challenged by the Internal Revenue Service. Such a challenge could involve additional tax payments, interest, penalties, and defense costs. A corporation might, for example, consider purchasing tax opinion insurance if its tax return included a substantial deduction for an item that, while legitimate, could be viewed as questionable and ultimately disallowed by the IRS. In this situation, tax opinion insurance would cover the costs associated with the corporation's tax position, except any additional tax due.

The Tax Reform Act of 1984 includes two sections that increased the tax bill of an offshore captive insurer defined as a controlled foreign corporation. One section redefined income related to the insurance of US-based risks as US-source income instead of foreign-source income. Another section made income from the insurance of related risks in foreign countries taxable in the current year. The net effect of these two changes was to eliminate most tax advantages for an offshore single-parent captive.

The Technical and Miscellaneous Revenue Act of 1988 is a US tax Act that contains sections on tax treaties with Barbados and Bermuda and the elections for offshore captives to be taxed as US domestic corporations.

Technique of operations review system is a theory of accident causation and control that states that management and supervision weaknesses are the root cause of workplace injuries and illnesses. Eliminating management shortcomings will eliminate most accidents. Control methods include establishing clear duties and tasks with appropriate reference manuals, improved job procedures with a safety focus, the elimination of workplace disorder, enhanced accountability for all employees, and better management and supervisor training.