Glossary

Alternative market is a term commonly used in risk financing to refer to one of a number of risk funding techniques (e.g., self-insurance, captive) or facilities (e.g., ACE, XL) that provide coverages or services outside the realm of that provided by most traditional property-casualty (P&C) insurers. The alternative market may be utilized by large corporations, for example, to provide high limits of coverage over a large self-insured retention (SIR) or by smaller entities participating in a risk retention group (RRG) or group captive program. Note that the distinction between traditional and alternative markets tends to blur over time as many traditional insurers expand their offering of products to encompass alternative-type funding techniques and vice versa. Also, retrospective rating plans, especially paid loss plans, are sometimes identified with the alternative market.

Alternative remedial contract strategy contractors are government contractors who provide project management and technical services to support remedial response activities at National Priorities List (NPL) sites.

Alternative risk financing facilities refer to risk financing mechanisms that do not involve a commercial insurance company—for example, captive insurers, risk retention groups (RRGs), pools, and individual self-insurance.

An alternative risk financing mechanism is a legal entity, such as a captive insurance company, that assumes from one or more entities the liability to pay their future losses; it is used as an alternative to commercial insurance.

Alternative risk transfer (ART) refers to financing risks outside of the commercial insurance regulatory system, which is designed to protect unsophisticated insurance buyers. It also refers to transferring risk using nontraditional methods—for example, combining insurance and noninsurance techniques.

The alternative risk transfer (ART) market is a name for the marketplace in which nontraditional risk transfer approaches (as compared to commercial insurance) can be arranged.

The standard Amendment of Insured Contract Definition commercial general liability (CGL) endorsement (CG 24 26) alters the policy's definition of "insured contract," which determines the scope of coverage for contractually assumed liabilities, to require that the injury or damage for which coverage is sought was caused "in whole or in part" by the named insured or those acting for it. Introduced in 2004, the intent of the endorsement is to cause the policy's contractual liability coverage to match more closely the protection provided under the 2004 additional insured endorsements.

AMERCO v. Commissioner, 96 T.C. 18 (1991), aff'd, 979 F.2d 162 (9th Cir. 1992), is one of three cases decided in January 1991 in which premiums paid to wholly owned insurance companies were deemed deductible expenses. Substantial unrelated business, among other tests, was critical.

The Americans with Disabilities Act (ADA) of 1990 is a federal statute primarily aimed at preventing discrimination in hiring persons having a "disability" as defined by the Act. Under the ADA, employers must afford job applicants equal opportunity (i.e., evaluating an applicant solely on their ability to perform the essential functions of a job, regardless of disability) and make reasonable accommodations to allow disabled employees to perform job functions. However, employers are relieved from the reasonable accommodation requirement if it creates an "undue hardship," such as excessive costs or considerable work disruption. Alleged violations of the ADA are one of the leading perils covered by employment practices liability insurance (EPLI) policies. Title III of the ADA is concerned with making public and commercial buildings physically accessible for disabled persons. It imposes remodeling and reconstruction requirements on some organizations that vary depending on the primary use of each building. Some of the requirements apply regardless of whether the building in question must be remodeled or rebuilt for reasons other than ADA compliance. Accordingly, the ordinance or law exclusions in 1995 and later edition Insurance Services Office, Inc. (ISO), commercial property forms contain language intended to make it clear that there is no coverage for the cost of compliance with the ADA.

The American Academy of Insurance Medicine (AAIM) is a nonprofit professional association whose physician members typically serve as medical directors to insurers. AAIM members may be retained by an insurer for underwriting and by consultants for claims and disability management. Other roles include medical and actuarial research, underwriting guideline development, employee health education and care, and liaising with the medical community, legislative bodies, and regulatory agencies. AAIM believes that medical science, especially the science of mortality and morbidity, is the basis for the practice of insurance medicine. Insurance medicine professionals must use that science to support the insurance industry in providing fair and accurate pricing, underwriting, and claims service for its customers.