Glossary

A group practice health maintenance organization is a type of health maintenance organization (HMO) that consists of various group physician practices including specialists who treat participants of the HMO exclusively. Patients are treated in the offices of the group practices, and the physicians are compensated on a per-patient basis for specific services.

Group property and liability insurance is group coverage for property and liability exposures.

Group self-insurance is self-insurance that is jointly granted to an entire group rather than to individual entities. The sponsors of the group may determine who is eligible to join based on group bylaws.

Guaranteed auto protection is insurance covering the difference between the actual cash value (ACV) of a damaged or stolen vehicle and the amount owed on the car under a loan or lease. This difference arises due to the rapid depreciation of most automobiles in their early years and can prove problematic if the car is totaled in an accident or if it is stolen and not recovered. GAP coverage is often sold through credit unions and automobile finance companies and frequently written on leased vehicles. For example, if a leased car with an ACV of $20,000 is stolen, the physical damage section of the auto policy would pay $20,000 minus any applicable deductible. However, if the lease still had $25,000 outstanding, the insured would be liable for the extra $5,000. GAP insurance would pay the extra $5,000 to the leasing company. GAP insurance is available by endorsement under either a commercial or a personal auto policy.

Guaranteed costs are premiums charged on a prospective basis without adjustment for loss experience during the policy period. A rate is agreed on at the inception of the policy and is multiplied by the appropriate exposure base (e.g., sales, payroll, number of vehicles, or square footage) to yield the premium. With respect to auditable lines of coverage (e.g., workers compensation and general liability), only a change in the exposure base during the policy period will cause the premium to vary. In other words, if the actual exposure base at the end of the policy period is more or less than the estimate used at policy inception, the premium will be adjusted accordingly. Loss experience during the policy period does not affect the premium for that period.

Guaranteed cost insurance is any insurance for which the insured pays a fixed premium (or a fixed rate that is applied to an exposure base) for the policy term, regardless of the number and amount of losses that occur during the policy term. This contrasts with insurance on a loss sensitive plan, in which the final premium is dependent on the actual losses during the period the plan is in effect.

The guaranteed cost premium is a premium that is determined prospectively, locking in the cost for the policy period regardless of the loss experience. The only way the premium can generally change is upon audit of the underlying exposure. For example, a workers compensation guaranteed cost premium is developed from a rate applied per 100 dollars of estimated payroll. If the actual payroll during the policy term is more or less than the estimate, the premium is adjusted accordingly.

Guaranteed insurability is an optional feature in life and health insurance that guarantees the insured the right to purchase additional insurance without undergoing a medical examination or otherwise providing evidence of good health.

A guaranteed investment contract is a funding arrangement most often used with profit sharing and savings and thrift plans in which the insurer guarantees the principal and interest rate, assuming that the contract is held to maturity.

Guaranteed issue refers to the right to purchase life or health insurance regardless of an individual's health, age, gender, or other factors that might predict the use of health services or life span. Federal and state regulations require health insurance plans sold to companies with 2 to 50 employees be on a guaranteed issue basis. Some states allow a policy or plan premium to change under their guaranteed issue regulations.