Glossary

Rate on line (ROL) is the calculation in percent derived by dividing reinsurance premium by reinsurance limit; the inverse is known as the payback or amortization period. For example, a $10 million catastrophe cover with a premium of $2 million would have an ROL of 20 percent and a payback period of 5 years.

Rating means determining the amount of premium to be paid to insure or reinsure a risk.

A rating bureau is an organization that collects statistical data (such as premiums, exposure units, and losses), computes advisory rating information, develops standard policy forms, and files information with regulators on behalf of insurance companies that purchase its services.

The rating class is the classification for rating purposes of an individual exposure.

Rating experience refers to computing a premium based on the loss experience of the risk itself.

Rating methodology refers to the method used by an underwriter when calculating premiums.

The financial strength of insurance companies and their ability to pay the claims of their policy owners are very important to the insurance-buying public and to the states that license and certify those insurers.

Re-entry term life insurance refers to a form of annual renewable term insurance under which the insured can reapply and be underwritten for the term insurance after a period specified in the policy to possibly obtain a lower premium than the guaranteed renewal rate.

In life insurance, readjustment income is an amount of money to provide for readjustment expenses after the death or disability of the breadwinner.

Real estate brokers errors and omissions insurance is professional liability coverage for persons engaged in buying, selling, leasing, or otherwise dealing in real estate on behalf of others.