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.
Links for IRMI Online Subscribers Only:
PracRisk, Topic B-2