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T

Target Capital

Varies by location and purpose.  Typically driven by local regulatory requirements and then set by management, (i.e. US 200% RBC, UK 150% RMM, etc.)

Total Equity

Driven by US GAAP accounting standards. Typically Capital plus/minus other accounting differences (i.e. DAC, reserve differences, admitted assets, deferred taxes, etc.)

Target Risk

  1. Certain high valued bridges, tunnels and fine arts collections which are excluded from reinsurance contracts and release the reinsurer of any potential high accumulation of liability on any one risk from various sources;
  2. a large hazardous risk on which insurance is difficult to place; or
  3. a large attractive risk which is considered a target for competing insurance companies and producers. See also Total Insured Value.

Target Surplus

See Target Capital

Term Certain Annuity

An form of Annuity that pays out over a fixed period rather than when the Annuitant dies.

Term Contract

A form of reinsurance contract written for a stipulated term (usually one Year). The contract automatically expires at the end of the term and renewal must be negotiated. See also Continuous Contract.

Term Insurance

A form of life insurance that covers the insured person for a certain period of time, the “term” that is specified in the policy. It pays a benefit to a designated beneficiary only when the insured dies within that specified period which can be one, five, 10 or even 20 Years. Term life policies are renewable but premiums increase with age.

Termination

The formal ending of a reinsurance agreement by its natural expiry, cancellation or commutation by the parties. Terminations can be either on a cutoff or runoff basis. Under cutoff provisions, the parties' obligations are fixed as of the agreed cutoff date. Otherwise, obligations incurred while the agreement was in force are run off to their natural extinction.

Territorial Rating

A method of classifying risks by geographic location to set a fair price for coverage. The location of the insured may have a considerable impact on the cost of losses. The chance of an accident or theft is much higher in an urban area than in a rural one, for example.

Terrorism Coverage

Included as a part of the package in standard commercial insurance policies before September 11, 2001 virtually free of charge. Since September 11, terrorism coverage prices have increased substantially to reflect the current risk.

Third-Party Administrator

Outside group that performs claims handling and, in some cases, other functions for an insurance company.

Third-Party Coverage

Liability coverage purchased by the policyholder as a protection against possible lawsuits filed by a third party. The insured and the insurer are the first and second parties to the insurance contract. (See First-party coverage)

Time Deposit

Funds that are held in a savings account for a predetermined period of time at a set interest rate. Banks can refuse to allow withdrawals from these accounts until the period has expired or assess a penalty for early withdrawals.

Title

Ownership. Also, the document providing evidence of ownership, such as title to a motor vehicle.

Title examination

The process of examining the public records of deeds, mortgages, liens, court proceedings, taxes, assessments and other records to determine the status of the title to real property.

Title Insurance

Insurance that indemnifies the owner of real estate in the event that his or her clear ownership of property is challenged by the discovery of faults in the title.

Tort

A legal term denoting a wrongful act resulting in injury or damage on which a civil court action, or legal proceeding, may be based.

Tort Law

The body of law governing negligence, intentional interference, and other wrongful acts for which civil action can be brought, except for breach of contract, which is covered by contract law.

Tort Reform

Refers to legislation designed to reduce liability costs through limits on various kinds of damages and through modification of liability rules.

Total Equity

Driven by US GAAP accounting standards. Typically Capital plus/minus other accounting differences (i.e. DAC, reserve differences, admitted assets, deferred taxes, etc.)

Total Insured Value (TIV)

A Clause in a reinsurance contract which stipulates that losses relating to risks which have a total insured value in excess of a given amount will not be protected under the contract. In many contracts this Clause replaced the Target Risk Clause.

Total Loss

The condition of an automobile or other property when damage is so extensive that repair costs would exceed the value of the vehicle or property.

Totally and permanently disabled

Insured is wholly prevented from working in his or her profession, the disability has continued for at least six months, and an independent medical examiner provides the opinion that the disability will be continuous and permanent and the disability did not result from self-inflicted injury, attempted suicide or alcohol or drug abuse.

Traditional Reinsurance

Reinsurance purchased to relieve risk or reduce exposure to assumed business. Typically bought to reduce a specific risk to the Retention Limit.

Transparency

A term used to explain the way information on financial matters, such as financial reports and actions of companies or markets, are communicated so that they are easily understood and frank.

Travel Insurance

Insurance to cover problems associated with traveling, generally including trip cancellation due to illness, lost luggage and other incidents.

Treasury Securities

Interest-bearing obligations of the U.S. government issued by the Treasury as a means of borrowing money to meet government expenditures not covered by tax revenues. Marketable Treasury securities fall into three categories — bills, notes and bonds. Marketable Treasury obligations are currently issued in book entry form only; that is, the purchaser receives a statement, rather than an engraved certificate.

Treaty Reinsurance

  1. A standing agreement between insurers and reinsurers. Under a treaty each party automatically accepts specific percentages of the insurer’s business.
  2. A general reinsurance agreement which is obligatory between the Ceding Company and the reinsurer containing the contractual terms applying to the reinsurance of some class or classes of business, in contrast to a reinsurance agreement covering an individual risk.
  3. The written contract defining the reinsurance agreement. The treaty contains provisions defining the terms of the agreement including specific risk definition, data on limits and retention, and provisions for premium payment and duration.

Trust

A transaction in which the owner of real property or personal property gives ownership to a trustee to hold and manage the property for the benefit of a third person, called a "beneficiary." Also, the document setting up the trust. Trusts may be of several kinds; two common classifications are an "inter vivos trust" (one put in operation during the trustor's lifetime) and a "testamentary trust" (one set up in a will and becoming operative after the testator's death).

Trust Agreement

An agreement under which certain assets are deposited by one party (the grantor), for the sole benefit of another party (the beneficiary), into an account managed by a third party (the trustee). In reinsurance, such an agreement is typically established to permit a licensed Ceding Company to take Credit for non-admitted reinsurance up to the value of the assets in trust.

Trustee

The administrator of a trust. A fiduciary.