Glossary

Nonprofit insurers are insurer companies that do not operate for profit, such as the "Blue plans."

In nonproportional reinsurance, losses excess of the ceding company's retention limit are paid by the reinsurer, up to a maximum limit. Reinsurance premium is calculated independently of the premium charged to the insured. The reinsurance is frequently placed in layers. Contracts may be continuous or for a specific term.

Nonqualified plans are employee benefit plans not subject to the regulations imposed by the Employee Retirement Income Security Act (ERISA) of 1974. Examples of nonqualified plans include plans falling under other, more specific laws (e.g., workers compensation, unemployment compensation, disability insurance) and unfunded plans maintained solely to provide benefits for certain employees in excess of the limitations imposed on benefits and contributions for tax purposes (e.g., benefit plans for executives or highly compensated employees, such as stock option plans).

Nonratable elements are a type of charge, especially in workers compensation rating, that is based on a catastrophic type of exposure and is thus excluded from ordinary rate making and is also not subject to experience rating and retrospective rating. An example of a nonratable element is an aircraft seat surcharge.

A nonrescission provision refers to a provision sometimes included within liability policies stating that the insurer cannot rescind the policy for any reason. Such provisions are often contained within Side A directors and officers (D&O) liability policies and, less frequently, in D&O policies written to cover privately held and nonprofit corporations. (Side A policies are those covering only the personal liability of the directors and officers rather than the liability of the corporation to indemnify them for their acts.) If an insurer rescinds a policy, it is treated as though the policy never existed, and the insurer must refund the full premium to the insured. Therefore, nonrescission provisions are advantageous for insureds.

Nonresident agent is the terminology for an agent who is licensed in a domicile in which they do not reside.

Nonstandard auto insurance provides coverage for drivers with poor driving records, who may have been denied coverage from standard insurers offering standard auto coverage forms. Such coverage may also be appropriate for an older adult who just got a driver's license or someone who has allowed their policy to lapse and is seeking to be insured again. The premium is typically much higher than that available in the standard market.

Nonsubject premium is a premium that is not a part of a loss sensitive rating formula. For example, in a retrospective rating plan, the nonsubject premium usually purchases the excess insurance (over the loss limits). The expression "nonsubject" refers to the fact that the premium is a guaranteed cost and not adjustable based on losses.

A nonsubscriber workers compensation plan is when an employer elects, by filing appropriate notices required by state insurance authorities, to pay work-related injury loss through some method other than statutory workers compensation. Three states—Texas, New Jersey, and Oklahoma—allow such an election. Note that the purchase of workers compensation insurance is elective in Texas. In New Jersey, employers are required to purchase either workers compensation coverage or employers liability coverage. In Oklahoma, employers must either purchase workers compensation coverage or become a qualified employer under the Oklahoma Employee Injury Benefit Act (OEIBA).

Nonsubscription is an option available only in Texas that permits employers to elect not to participate in the workers compensation system. Nonsubscribing employers can be held liable in tort for injuries to employees, and they are not permitted to use the traditional common law defenses available to employers subject to workers compensation laws. Two special types of insurance policies can be purchased by nonsubscription employers: occupational accident insurance and employers excess indemnity insurance.