Glossary

FAS 113 refers to standards for accounting for reinsurance. FAS 113 prevents captives from setting up meaningful spread-loss plans or financial reinsurance accounts.

FAS 115 refers to standards for evaluating assets. FAS 115 requires the inclusion of a significant amount of detail about a captive's investment portfolio in any audited annual report.

FAS 5 refers to standards for recording for contingencies. FAS 5 prevents captives from setting up catastrophe or equalization reserves.

A feasibility study is undertaken to determine whether a contemplated risk financing program is feasible for an organization or group of organizations. An actuarial analysis is often done in conjunction with a feasibility study. It is often used in reference to studies that attempt to ascertain whether the formation of a captive insurance company is a viable risk financing alternative under a given set of circumstances.

The Federal Arbitration Act is a statute enacted in 1925 by Congress that facilitates private dispute resolution through arbitration. The FAA has been construed to apply to all contracts involving interstate commerce in both federal and state courts and regulates the enforceability of agreements to arbitrate.

Federal crop insurance provides coverage for farmers that is overseen and subsidized by the federal government and marketed and serviced by private insurers and agents. Federal crop insurance offers an array of insurance policies that cover loss of crop value arising from extremely hot weather, drought, excessive moisture, flood, wildlife damage, earthquake, insects, and disease. These policies protect a farmer against production or revenue losses when a particular insured crop does not meet a preset production guarantee. The Risk Management Agency (RMA) of the US Department of Agriculture oversees the federal crop insurance program. RMA provides policies for more than 100 crops, which is the majority of US crops, although coverage may not be available for some crops in some areas. Federal crop insurance is also referred to as multi-peril crop insurance (MPCI).

The Federal Emergency Management Agency is an agency of the US Department of Homeland Security that provides a single point of accountability for all federal emergency preparedness, mitigation, and response activities. FEMA's primary purpose is to coordinate the response to a disaster that overwhelms the resources of state and local governments. It works closely with these governmental bodies by funding emergency programs and offering technical guidance and training. In addition, FEMA administers the National Flood Insurance Program (NFIP) and advises communities on building codes, emergency response, and floodplain management.

The Federal Employers Liability Act of 1908 is a federal statute that provides for a liberalization of the rules for determining tort liability applicable to the liability of railroads to their employees for personal injury (PI). Under normal tort rules, the injured party must prove negligence on the part of the defendant and the absence of contributory negligence or assumption of risk on their own part. Under FELA, the employee needs to only show that any negligence on the part of the employer contributed to the injury. However, contributory negligence on the part of the employee reduces the recovery in proportion to the negligence attributable to the employee. The practical effect of this law, as interpreted over the years by the courts, has virtually been to impose a strict liability law on railroads with respect to injury to their employees in a manner very similar to workers compensation but without the limitation on benefits provided under workers compensation laws.

The federal excise tax is a tax imposed on premium payments to offshore insurers: 4 percent on direct premiums and 1 percent on reinsurance premiums. It was once relaxed for premium payments to most offshore insurers/reinsurers in Barbados and Bermuda, but not for long. It can be eliminated if the captive makes an election to be taxed as a US corporation or if the transaction is not really insurance (i.e., not claiming premium deductibility) but argued to be a transfer of self-insurance reserves.

The Federal Highway Administration coordinates highway transportation programs in cooperation with states and other partners to enhance the country's safety, economic vitality, quality of life, and environment. Major program areas include the Federal-Aid Highway Program, which provides federal financial assistance to the states to construct and improve the National Highway System, urban and rural roads, and bridges. This program provides funds for general improvements and development of safe highways and roads. The Federal Lands Highway Program provides access to and within national forests, national parks, Native American reservations, and other public lands by preparing plans and contracts, supervising construction facilities, and conducting bridge inspections and surveys. The FHWA also manages a comprehensive research, development, and technology program.