INCURRED BUT NOT REPORTED (IBNR) – Losses that have occurred but have not been reported to the insurer as of a particular date, sometimes referred to as “pure IBNR.” The definition of IBNR is often expanded to include future development on case reserves and loss on reopened claims, sometimes referred to as RBNE (reserved but not enough). The amount of IBNR is typically estimated by a casualty actuary.
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INCURRED LOSSES – Losses that occur within a given time period, adjusted or not or paid during that period. Excludes IBNR.
INCURRED LOSS RATIO – The percentage of losses incurred to premiums earned.
INDEMNIFY – Indemnify means “to make whole,” or return one to the state that occurred before the loss incident. Insurers generally indemnify two parties: persons damaged by a liability loss, and the insured damaged by a property loss.
INDUSTRIAL INSURED – An insured which procures the insurance of any risk or risks by use of the services of a full-time employee acting as an insurance manager or buyer and whose aggregate annual premiums for insurance on all risks total at least $25,000 and who has at least 25 full-time employees.
INDUSTRIAL INSURED CAPTIVE INSURANCE COMPANY – Any company that insures risks of the industrial insureds that comprise the industrial insured group, and their affiliated companies.
INFLATION FACTOR – A loading to provide for increased medical costs and loss payments in the future due to inflation.
INSURANCE SERVICES OFFICE (ISO), Inc. – An organization that files rates and forms for its member insurance companies. Insurance companies go to ISO to gain access to forms, exclusions, endorsements, etc. Non-members may also purchase forms for their use.
INTERMEDIARY – A third party in the design, negotiation, and administration of a reinsurance agreement. Intermediaries recommend to ceding companies the type and amount of reinsurance to be purchased and negotiate the placement of coverage with reinsurers.
INTERMEDIARY CLAUSE – A provision in reinsurance agreements which identifies the intermediary negotiating the agreement. Most intermediary clauses shift all credit risk to reinsurers by providing that: (a) the cedant’s payments to the intermediary are deemed payments to the reinsurer; and (b) the reinsurer’s payments to the intermediary are not payments to the cedant until actually received by the cedant. This clause is mandatory in some states.
