Glossary

The return of professional fees exclusion is an exclusion found in a number of professional liability policy forms precluding coverage for situations where, as part of the damages awarded to a claimant, an insured is required to return the fees charged for a negligently performed professional service.

The return of remuneration exclusion is an exclusion found within directors and officers (D&O) liability policies precluding coverage for claims arising from allegations that monies were paid to directors or officers without stockholders' approval.

Return on equity (ROE) is a finance term also used in enterprise risk management (ERM) term meaning net income divided by net worth.

A target return on equity measure in which the denominator is adjusted depending on the risk associated with the instrument or project.

Return premium is the amount due the insured if the actual cost of a policy is less than what the insured has previously paid.

Reverse merger refers to a transaction in which an existing shell company (i.e., a publicly traded company with few or no actual business operations) acquires a private company with actual business operations. In this situation, the private operating company takes over the public shell company.

A reverse takeover is a merger between a Chinese company and a dormant US shell company listed on a US exchange—as a back-channel way of listing a Chinese company in the United States. US accountants, lawyers, and bankers who have helped facilitate such transactions are subjects of ongoing federal probes.

Reversionary refers to a contract providing benefits only if the beneficiary is living at the time of death of the insured.

A revision restatement is a financial restatement revision that pertains to a small, relatively inconsequential misstatement or accounting error. Financial restatements of this type are considered adjustments made in the normal course of business and contrast with what are known as reissuance restatements, which address material accounting errors and therefore require reissuance of a past financial statement.

Revocable beneficiary is a provision contained in most life insurance policies that allows the policy owner to remove or change a beneficiary without obtaining the beneficiary's consent.