Glossary

Loan-backs are loans of assets from a captive to a shareholder or affiliated entity.

Locality Standard is a common law liability doctrine stating that the standard of care to which a physician is held is a function of the locality in which they practice. The rule rapidly lost favor among most courts and is therefore infrequently invoked as a defense to professional negligence. Given the advanced state of communication and travel, even physicians practicing in relatively isolated, rural areas can avail themselves of the most advanced methods of treatment and technology.

Logistics are transportation services that include inbound and outbound transportation management, fleet management, warehousing, materials handling, order fulfillment, logistics network design, inventory management, supply and demand planning, third-party logistics management, and other support services.

London Interbank Offered Rate (LIBOR) is an interest rate that is set each business day morning in London by major banks. LIBOR serves as a worldwide benchmark rate that is responsible for determining the interest rates applicable to many consumer and business financial products, including credit cards, car loans, adjustable rate mortgages, municipal interest rate swaps, and corporate loans. In April 2008, regulators in Europe, the United States, and Japan began investigating reports that a number of major banks colluded to manipulate the LIBOR, an action that would add illegally to their profits. Several of the banks later agreed to pay fines and penalties based on information revealed during these investigations. As of November 2013, authorities are continuing to examine the roles of other banks and their directors and officers in conjunction with the manipulation of LIBOR.

Long-tail liability is the liability for claims that do not proceed to final settlement until a length of time beyond the policy year. High incurred but not reported (IBNR) claims contribute to this "tail" effect, since these losses are usually not settled until several years after the expiration of the policy in question.

Long-term care (LTC) refers to care and service required by an individual on a continuing basis because they can no longer perform some or all the activities of daily living. LTC is often used interchangeably with chronic care in the medical community.

Long-term care insurance (LTCI) is a form of health insurance that provides benefits for a chronically ill or disabled individual over an extended period of time. Long-term care (LTC) coverage provides funds for nursing-home care, home-health care, personal, or adult day care. Most LTCI policies will cover only a specific dollar amount for each day spent in a nursing facility or for each home-care visit. Federal legislation in 1996 established what is termed "tax-qualified long-term care insurance" and standardized coverage to qualify for the tax-deductible plan. Most LTC coverage is written to comply with the federal plan. LTCI policies are either "tax-qualified" or "non-tax-qualified," and there can be significant differences between the two. Standard LTC is often referred to as non-qualified LTCI.

Long-term disability income insurance replaces earnings lost due to illness or disability occurring on or off the job. Coverage may be purchased on an individual or group basis. Individual policies typically do not pay until the period of the disability exceeds a specified elimination period, usually 30 days or longer. Recovery under group disability income policies is often structured to begin after short-term disability income insurance benefits or uninsured salary continuance payments cease. One of the most important provisions in either group or individual policies is the definition of "disability." The broader the definition, the broader the scope of coverage is. Most LTD policies are structured to pay benefits until the insured reaches age 65.

Long-term insurance in certain captive domiciles refers to long-duration contracts such as life insurance.

In longevity swaps, which have been around for a long time, the pension fund buys protection against the risk of beneficiaries living too long (and the fund having to pay out more than expected) in the form of a commitment to exchange payments throughout the term of the swap. In entering into a longevity swap, the pension scheme has typically faced either an insurer or a bank. The insurers or banks have in turn sought to dispose of the longevity risk to the reinsurance market through a similar longevity swap. The two sides of these swaps have matching and opposite concerns. Life reinsurers worry about people dying too soon, while pension funds worry about people living too long.