Glossary

A T3 Lloyd's Form is a coverage form used by the various Lloyd's of London syndicates to provide stand-alone terrorism insurance.

With a reinsurance company's knowledge, table shaving is a concept used by direct writing life insurance companies that allows substandard risks to be placed as standard risks. Table shaving is usually used with permanent products only. Maximums apply on age and amount, and limitations are set on the types of impairments allowed. The reinsurer typically either loads up the rates of the standard risk class or simply uses the same rates that it charges for substandard risks.

The tabular value reserve method is a life insurance reserving method that uses a mortality table to indicate the reserve that applies to the rating of specific insureds.

Tacit renewal is an arrangement in which a contract of insurance "renews" automatically without either insured or insurer having an obligation to act. This renewal happens at a predetermined date, calculated by deducting the "notice period" (most often expressed in a number of days) from the anniversary date of the contract. These "notice periods" can also vary by both country jurisdiction and coverage line of business. For example, in Germany, a 93-day notice period is required; for Canada, that notice period is only 15 days and only for automobile lines of coverage. The obligation to notify the current insurer that coverage is not being renewed has some complexities as well. In some countries, the local client (not the corporate home office) is required to notify the insurance company of intent not to renew.

Tail liability describes claims from workers compensation and liability exposures in a given period that can arise for many years thereafter. The aggregate of such incurred but not reported (IBNR) losses is often called tail liability.

Tail coverage is a feature found within a claims-made policy that permits an insured to report claims that are made against the insured after a policy has expired or been canceled if the wrongful act that gave rise to the claim took during the expired/canceled policy. Tail coverage requires that the insured pay additional premium. For example, assume that a claims-made policy with a January 1, 2025–2026, term contains tail coverage with a term of January 1, 2026–2027. Also assume that the insured did not renew the policy when it expired on January 1, 2026. Under the tail coverage, the insured will be able to report claims to the insurer during the January 1, 2026–2027, period of tail coverage, provided the claim resulted from a wrongful act that took place during the expired January 1, 2025–2026, policy term. Tail coverage, which is synonymous with extended reporting period provisions, includes several important features: (1) the coverage applies only if the wrongful act giving rise to the reported claim took place during the expired/canceled policy period; thus, there is no tail coverage available for wrongful acts if committed during the period of tail coverage. (2) Tail coverage applies for a limited time period, generally 1 year. (3) Purchasing tail coverage for a specific time period does not reinstate the policy's aggregate limit of liability.

Tail value at risk is an economic cost of ruin (ECOR)-like measure in the sense that both the probability and the cost of "tail events" are considered; the calculation differs from ECOR in such a way that it has a desirable statistical property (i.e., coherence).

Takaful is the concept for the sharing of risks based upon Islamic laws. Structured much like mutual insurance, takaful allows participants to pool their exposures to loss by each paying in a specific sum to assist each other in the time of need. The members essentially guarantee each other, with the losses being spread across all participants. A requirement of a takaful cooperative is that it may not invest its funds in any companies viewed to be involved in activities prohibited by Islamic law. For example, investment is forbidden in organizations having any dealings with tobacco, pork, alcohol, entertainment, or gambling. And since the traditional insurance product is considered to have elements of gambling, uncertainty, and interest, investment in a traditional insurer is barred.

Targeted enterprise risk insurance is a class of insurance products used to cover specific financial (e.g., credit), operational, or hazard risk. This category of insurance products has nothing to do with an enterprise-wide approach to risk transfer, insurance, or financial risk management.

Targeted tender refers to the submission of a claim to only one of multiple insurers under whose policies the claimant has insured status. Targeted tender has been advanced as a means of securing coverage exclusively under an indemnitor's policy when "other insurance" provisions in the named insured's and additional insured's policies have not been clearly coordinated to achieve the indemnitee's risk transfer goals. Targeted tender used for this purpose has been allowed only in a few jurisdictions, such as Illinois. It is also called selected tender.