Glossary

No-pay, no-play laws are state laws that prohibit uninsured drivers from collecting certain types of damages from negligent insured drivers. The theory is that those who do not buy insurance should not receive benefits from those who do purchase it. These laws prohibit injured, uninsured drivers from collecting noneconomic damages and often require uninsured drivers to pay a large deductible (typically $10,000) before they can sue for property damage (PD).

A nonadmitted asset is an asset that may be accounted for in an insurer's balance sheet but not allowed to be counted for purposes of calculating statutory capital or compliance with solvency ratios.

Nonadmitted balance is reinsured liabilities on an insurer's balance sheet (loss reserves and unearned premium reserves) for which no credit is given in the ceding company's statutory statement. This creates a reduction in surplus, unless the reinsurer provides acceptable collateral in the amount of the unauthorized balance.

In most countries outside the United States, nonadmitted insurance—international is insurance written by a company that is neither licensed nor registered to do business in the country where the property or risk is located. Some countries allow nonadmitted insurance; others do not. Since insurance is regulated by the states rather than by a United States federal regulator in the United States, nonadmitted insurance in this country is insurance written by an insurer that is not licensed by the state in question.

In the United States, nonadmitted insurance—US is insurance written by an insurance company not licensed to do business in a certain state. Insurers can nevertheless write coverage through an excess and surplus lines broker licensed in that jurisdiction.

A nonadmitted insurer is an insurer that is allowed to sell insurance in a state without holding a license in that state. There is usually a requirement that the admitted market will not provide coverage.

Nonadmitted reinsurance is reinsurance purchased from a company not licensed or authorized to transact business in a particular jurisdiction. Nonadmitted reinsurance may not be treated as an asset against reinsured losses or unearned premium reserves for insurer accounting and statement purposes.

Nonappropriated Fund Instrumentalities Act (NFIA) of 1952 is a federal act that extends the benefits of the Longshore and Harbor Workers' Compensation Act (LHWCA) to civilians working for the US military. As a result, the Act essentially provides no-fault workers compensation benefits to this employee segment.

Nonassessable refers to an insurance policy under which the insurer (e.g., a stock company) does not have the right to assess policyholders for additional amounts to make up shortfalls in the cost of operating the company. Such a policy is the opposite of one issued by an assessment company.

Nonassignable designates that a policy cannot be assigned by the owner to a third party.