Glossary

The Insurance Institute for Highway Safety (IIHS) is a nonprofit research and communications organization funded by automobile insurers. The IIHS focuses on the factors that do and do not work in preventing motor vehicle crashes in the first place and reducing injuries in the crashes that still occur. The IIHS's research concerns the countermeasures aimed at all three factors in motor vehicle crashes (human, vehicular, and environmental) and on interventions that can occur before, during, and after an automobile accident to reduce losses. An affiliated organization is the Highway Loss Data Institute (HLDI).

An insurance line is a type of insurance business that is grouped according to the reporting categories used when filing an insurer's statutory reports.

Insurance-linked securities (ILS) are derivative or securities instruments linked to insurance risks. ILS value is influenced by an insured loss event underlying the security. This securitization model was born of efforts by the insurance industry to develop an additional source of insurance and reinsurance capacity by transferring traditionally insurable risks to the capital markets. As the ILS market has developed, it has provided an alternative source of risk capital, most often for property catastrophe risks such as windstorm and earthquake. The ILS market has also been employed for life insurance exposures such as mortality and longevity risk.

An insurance policy, in broad terms, is the entire printed insurance contract. Generally, an insurance policy is assembled with a combination of various standard forms, including a declarations page, coverage form, and endorsements. Sometimes, a causes of loss form is also required. Together, these forms delineate the coverage term, the insurance policy limits, the grant of coverage, exclusions and other limitations of coverage, and the duties and responsibilities of the insured in the event of a loss.

The Insurance Regulatory Information System (IRIS) is the mechanism developed by the National Association of Insurance Commissioners (NAIC) to assist states in overseeing the financial condition of insurance companies. The IRIS ratios are a set of ratios designed to measure solvency and liquidity. They are calculated from insurers' annual statements that are filed with the NAIC, and insurers that fail one or more tests can be placed under the supervision of their domicile regulator.

An insurance requirements clause is the part of a commercial contract in which the types and minimum amounts of insurance the parties agree to provide in connection with their performance of the contract are specified.

Insurance risk management is a term for the traditional risk management concept, which focuses primarily on pure risks rather than operational, market, credit, and other types of risk. This term is frequently used to distinguish between the traditional risk management concept and the more recent practice of enterprise risk management (ERM).

An insurance risk score is a measure developed by insurers based on credit information obtained from the three major US credit bureaus and used as an underwriting tool. Such information includes payment history, number of accounts open, and bankruptcy filings but has nothing to do with a consumer's assets. Insurers base their use of this measure on the theory that people who manage their money well tend to take better care of their homes and to drive more responsibly.

Insurance risk scoring is used by insurers to evaluate an applicant's credit rating as an underwriting tool to slot that applicant into a particular program.

The Insurance Services Office, Inc. (ISO), is an organization that collects statistical data, promulgates rating information, develops standard policy forms, and files information with state regulators on behalf of insurance companies that purchase its services.