Glossary

The first named insured is the person or entity listed first on the policy declarations page as an insured.This primary or first named insured is granted certain rights and responsibilities that do not apply to the policy's other named or additional insureds. This primary or first named insured is granted certain rights and responsibilities that do not apply to the policy's other named insureds. Examples of additional rights of first named insureds are the receipt of cancellation notice and return premiums. Unique responsibilities include the notice of loss requirements and premium payment obligations.

The sharing of risk by a reinsurer with the ceding company on a pro rata basis, excess of a specific retention. The proportion is sometimes fixed and sometimes varied according to different classes of risks and the net retentions that the insurer keeps for its own account.

Fixed-cost insurance is a traditional insurance program where the insured is charged a fixed premium rate. The rate is tied to a measure of exposure, such as payroll or sales, but is not loss sensitive.

The fixed amount option is an option that a life insurance beneficiary may select as a settlement, whereby the policy proceeds are paid through periodic installments of fixed amounts until the principal and interest are exhausted.

A fixed benefit is a benefit from a life or annuity insurance policy that does not vary in amount and is paid on a regular periodic basis.

A fixed period annuity refers to an annuity policy that makes income payments for a limited period of time (e.g., 5 years). Payments cease after the stipulated period or upon the annuitant's death.

The fixed period option is a life insurance option that may be selected as a settlement under which the policy proceeds are left on deposit with the insurer to accrue interest and are paid to the beneficiary in equal payments for a specific number of years.

Flat in an insurance context refers to a premium quoted without interest, service, additional charges, or adjustments. For example, when a premium is quoted on a "flat" basis, no additional premiums (or refunds) will be due under the policy, regardless of loss experience or changes in exposure during the term of coverage.

Flat cancellation in an insurance context is the cancellation of an insurance policy or bond as of its effective date, and before the insurer has assumed liability. This requires the return of paid premium in full since the insured has never been covered under the policy.

A flat commission is one with a fixed rate.