LOMA Glossary

The LOMA Glossary of Insurance and Financial Services Terms

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UCR fee. See usual, customary, and reasonable fee.

UL insurance. See universal life insurance.

ultimate mortality table. A type of mortality table that shows the expected mortality rates of people who have not recently been underwritten for insurance policies. See also select and ultimate mortality table. Contrast with select mortality table.

umbrella liability insurance. Liability insurance providing additional liability coverage over and above that provided by a homeowners, automobile, or comprehensive personal liability policy.

unallocated pension funding contract. A type of pension plan contract in which some or all of the plan sponsor’s contributions are held in a pooled account and are not attributed to plan participants until the time arrives for the disbursement of benefits. Contrast with allocated pension funding contract.

unauthorized insurer. In the United States, an insurer that does business in a particular state without becoming licensed to do business in that state in accordance with that state’s law. Also known as nonadmitted insurer.

undeliverable. Term used to describe an insurance policy that the applicant refuses when the agent attempts to deliver it. Also referred to as not taken up.

underwriter. An insurance company employee who (1) assesses and classifies the degree of risk a proposed insured or group represents with respect to a specific insurance product and (2) makes a decision concerning the acceptance of that risk.

underwriting. The process of (1) assessing and classifying the degree of risk a proposed insured or group represents with respect to a specific insurance product and (2) making a decision to accept or decline that risk. Also known as selection of risk.

underwriting capacity. The highest monetary amount of risk that a direct writing company will accept on an individual insured so that unusual fluctuations in claims will not damage ongoing company solvency. Also known as risk-taking capability.

underwriting guidelines. An insurer’s general standards that underwriters follow as they establish the level of risk that a proposed insured or group presents.

underwriting manual. A paper or electronic guide to underwriting action that includes the information an insurer uses to assign relative values to life insurance risks and typically provides descriptive information on impairments.

underwriting objectives. See underwriting philosophy.

underwriting philosophy. A set of objectives for guiding all of an insurer’s underwriting actions that generally reflects the insurer’s strategic business goals and includes its pricing assumptions for products. Also known as underwriting objectives.

underwriting worksheet. For a particular insurance case, a document that contains records of telephone calls and other communications, documentation of requests for reinsurance, underwriting requirements and other information requested, and other notations that explain clearly the manner in which the case has been handled from the time it was submitted to the insurer.

Unfair Claims Settlement Practices Act. A National Association of Insurance Commissioners' model act that specifies a number of actions that are considered unfair claims practices if committed by an insurer (1) in conscious disregard of the law or (2) so frequently as to indicate a general business practice.

Unfair Trade Practices Act. A National Association of Insurance Commissioners' model law that many states in the United States have enacted that identifies certain business practices as unfair and prohibits those practices in the business of insurance if they are committed (1) flagrantly, in conscious disregard of the law or (2) so frequently as to indicate a general business practice.

unfavorable variance. In budgeting, an accounting result in which actual revenues are less than expected revenues and/or actual expenses are greater than expected expenses. Contrast with favorable variance.

unilateral contract. A contract under which only one of the contracting parties makes a legally enforceable promise. Contrast with bilateral contract.

uninsured motorists coverage. Insurance that covers an insured driver and her passengers for bodily injuries and, in some jurisdictions, property damage incurred in an accident with a driver who, contrary to legal requirements, carries no liability insurance.

unisex mortality table. A type of mortality table that shows a single set of mortality rates to be used for both males and females. Contrast with sex-distinct mortality table.

unit contribution margin. The difference between the selling price of one unit of product and the variable costs for one unit of product.

unit cost. The incurred expense attributable to a single measured amount of work or product.

unit of coverage. A basic amount of coverage that insurers use when calculating premium rates for their products. For life insurance, a unit of coverage usually is $1,000 of coverage.

unit trust. See separate account.

unit-linked fund. See subaccount.

unit-linked portfolio. See separate account.

universal life (UL) insurance. A form of cash value life insurance that is characterized by its flexible premiums, its flexible face amount, its flexible death benefit amount, and its separation of the three primary policy elements—mortality charges, interest rate, and expense charges.

unpaid premiums provision. An individual health insurance policy provision which states that when a claim is paid, any premium due and unpaid may be deducted from the claim payment.

unrealized gain (or loss). The difference between the book value of an invested asset and its fair market value. The gain or loss is not an actual gain or loss because the investment has not matured or been sold. Contrast with realized gain (loss).

unsecured bond. See debenture.

up-selling. A sales activity in which customers are invited to purchase a more powerful, more enhanced, or more profitable product than the one a customer originally considers purchasing.

upstream holding company. A holding company that controls the corporation that formed it and can also own other subsidiaries. Contrast with downstream holding company.

USA PATRIOT Act. A U.S. federal law that focuses on reducing terrorist activity by detecting money laundering and other illegal financing activities. Also known as the Patriot Act.

use of funds. See cash outflow.

usual, customary, and reasonable (UCR) fee. The amount that medical care providers within a particular geographic region commonly charge for a particular medical service.

utilization review. A process managed care plans use to evaluate the medical necessity, appropriateness, and cost-effectiveness of health care services and treatment plans.

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