Glossary

Funded refers to a financial situation in which there is sufficient sums of money to meet future liabilities.

Funded covers are also known as "time and distance"—that is, no real underwriting risk to the reinsurer, only a credit risk, timing risk, or investment risk. The lump sum prepaid premium equals the reinsurance recoverable, recognizing the time value of money. The lump sum prepaid premium equals the reinsurance recoverable, recognizing the time value of money.

A funded pension plan is an actuarially sound pension plan for which reserves are adequate at the time benefits become payable.

Funded retention refers to a risk financing program under which an organization sets funds aside in advance to pay for losses that have been retained by the organization, rather than transferred to an insurer or another party.

Funded self-insurance is a more formalized approach to self-insurance involving the creation of an earmarked asset account to match loss reserves. It is distinguished from "unfunded" or "pay-as-you-go" self-insurance.

Funds control is an arrangement employing an independent third party to disburse the construction funds to the various trade contractors and suppliers on a given project, often mistakenly believed to be a viable alternative guarantee to a contract bond. Marshaling the contract funds and disbursing them pursuant to approved payment requests mitigates the possibility of a payment bond type claim. It does not, however, guarantee that the project will be built per plans, on time, within budget, and that all bills will be paid.

Funds withheld refers to a provision in a reinsurance treaty under which some or all of the premium due to the reinsurer, usually an unauthorized reinsurer, is not paid but rather is withheld by the ceding company either to enable the ceding company to reduce the provision for unauthorized reinsurance in its statutory statement or to be on deposit in a loss escrow account for purposes of paying claims. This enables the ceding company to either reduce the provision for unauthorized reinsurance in its statutory statement or for funds to be on deposit in a loss escrow account for purposes of paying claims. The reinsurer's asset, in lieu of cash, is "funds held by or deposited with reinsured companies."

A furriers block policy is an inland marine insurance covering the inventory of a fur dealer.

Furriers customers insurance is inland marine insurance covering furs that are stored by the insured fur dealer.

A future is an agreement traded on a futures exchange, to make, take delivery of, or effect a cash settlement based on the actual or expected price, level, performance, or value of one or more underlying interests.