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N

Named Peril

Peril specifically mentioned as covered in an insurance policy.

National Association of Insurance Commissioners (NAIC)

An association of the chief insurance regulatory officials of the 50 states, the District of Columbia, American Samoa, Guam, Puerto Rico and the Virgin Islands.

National Flood Insurance Program

Federal government-sponsored program under which flood insurance is sold to homeowners and businesses. (See Adverse selection; Flood insurance)

Negligence

  1. In tort law, the failure to exercise due care.
  2. The failure to protect another or the property of another from unreasonable risk or harm.

Net Amount At Risk

  1. In life insurance, the difference between the face amount and cash value.
  2. Face Amount minus Benefit Reserves

Net Line

The maximum limit an insurer or reinsurer is willing to accept after taking Credit for reinsurance coverage. Such limits are usually expressed per insured, per line of business, etc. See Gross Line.

Net Loss

The amount of loss sustained by an insurer after deducting all applicable reinsurance, salvage, and subrogation recoveries.

Net Premiums Written

See Premiums written

Net Reserves

Reserves after credit for reinsurance.

Net Retained Liability

The amount of insurance which a Ceding Company keeps for its own account and does not reinsure in any way (except in some instances for Catastrophe Reinsurance).

Net US GAAP Reserves

Net US GAAP Benefit Reserves less DAC and PVFP

Ninety Day Rule

The Annual Statement requirement which provides that an insurer must establish a provision for certain balances when it has reinsurance recoverables over ninety days past due.

No Claims Bonus

This is an agreement whereby the non-proportional reinsurer is obliged to repay an amount - a part of the premium income - if the protection is claim-free. In principle this corresponds to the profit commission under a proportional treaty.

No-Fault

Auto insurance coverage that pays for each driver’s own injuries, regardless of who caused the accident. No-fault varies from state to state. It also refers to an auto liability insurance system that restricts lawsuits to serious cases. Such policies are designed to promote faster reimbursement and to reduce litigation.

No-Fault Medical

A type of accident coverage in homeowners policies.

No-Pay, No-Play

The idea that people who don’t buy coverage should not receive benefits. Prohibits uninsured drivers from collecting damages from insured drivers. In most states with this law, uninsured drivers may not sue for noneconomic damages such as pain and suffering. In other states, uninsured drivers are required to pay the equivalent of a large deductible ($10,000) before they can sue for property damages and another large deductible before they can sue for bodily harm.

Non-Admitted Assets

Assets that are not included on the balance sheet of an insurance company, including furniture, fixtures, past-due accounts receivable, and agents’ debt balances. (See Assets)

Non-Admitted Insurer

Insurers licensed in some states, but not others. States where an insurer is not licensed call that insurer non-admitted. They sell coverage that is unavailable from licensed insurers within the state.

Non-Admitted Reinsurance

A Company is “non-admitted” when it has not been licensed and thereby recognized by appropriate insurance governmental authority of a state or country. Reinsurance is “non-admitted” when placed in a non-admitted company and therefore may not be treated as an asset against reinsured losses or unearned premium reserves for insurance company accounting and statement purposes.

Non-experience Rated

A reinsurance arrangement which does not allow the Ceding Company to share in any profits realized on the reinsurance. Premiums for non-experience rated reinsurance generally have smaller loads than premiums for experience rated reinsurance. Compare with Guaranteed Cost Reinsurance.

Non-Life Insurance

See Property Casualty Insurance

Non-proportional

A form of reinsurance where the reinsurer's liability is not fixed in advance, but is dependent on the number or amount of claims incurred in a given period.

Normal Underwriting (Normal Underwriting Procedures)

One of the conditions for automatic reinsurance. The definition of what is normal for the plan is set at the inception of the agreement.

Notice of Loss

A written notice required by insurance companies immediately after an accident or other loss. Part of the standard provisions defining a policyholder's responsibilities after a loss.

Novation

An action that substitutes a new party and discharges one of the original parties to a contract, by agreement of all parties.

Nuclear Insurance

Covers operators of nuclear reactors and other facilities for liability and property damage in the case of a nuclear accident and involves both private insurers and the federal government.

Nursing Home Insurance

A form of long-term care policy that covers a policyholder’s stay in a nursing facility.