Impaired Insurer

An insurer which is in financial difficulty to the point where its ability to meet financial obligations or regulatory requirements is in question.

Impairment of Capital

A condition in which the surplus account of a stock insurer has been exhausted so that it must invade the capital account (amounts contributed by stockholders) to meet liabilities. Some jurisdictions allow a percentage invasion of capital; some do not.

Implied Authority

Authority of an agent that the public may reasonably believe the agent to have. If the authority to collect and remit premiums is not expressly granted in the agency contract, but the agent does so on a regular basis and the insurer accepts, the agent has implied authority to do so.


Goods or services purchased from another country and brought into one's own country.

Incurred Loss Ratio

The percentage of losses incurred to premiums earned.


To restore the victim of a loss to the same position as before the loss occurred.


Restoration to the victim of a loss by payment, repair, or replacement.

Independent Adjuster

An adjuster who works as an independent contractor, hiring himself out to insurance companies or other organizations for the investigation and settlement of claims. Independent adjusters represent the interests of insurance companies. Contrast with Public Adjuster. An agent operating as an independent contractor under the independent agency system.

Independent Contractor

One who agrees to perform according to a contract and who is not an employee.

Independent Insurance Agents of America (IIAA)

An association of independent insurance agents historically known to represent stock insurance companies more than mutual companies. Members are also members of their state associations.

Index Bureau Experience

A measure of losses relating to claims reported through a claim office during a 12-month period.

Individual Risk Premium Modification Rating Plan

A plan which modifies the premium on large package policies by considering such factors as reduced expenses for handling costs (Expense Modification) and special characteristics of the risk not contemplated by the basic rate (Risk Modification).

Industrial Risk Insurers

A consortium of major stock property and casualty insurers formed to write large, highly protected risks. The organization was formed in 1975 by the merger of the Factory Insurance Association and the Oil Insurance Association.

Initial Premium

An amount paid at the inception of an insurance contract, usually subject to adjustment at the end of the policy period.


Independent checking on facts about an applicant, policyholder, or claimant, usually by a commercial inspection agency.

Inspection Report

A summary statement of the physical, financial, and moral attributes of an insured or an applicant for insurance on his property. Such reports are prepared by inspection bureaus, specialized organizations, and insurers.


Acceptability to the insurer of an applicant for insurance.

Insurable Interest

Any interest a person has in a possible subject of insurance, such as a car or home, of such a nature that a certain happening might cause him financial loss.

Insurable Risk

A risk which meets most of the following requisites:

  1. The loss insured against must be capable of being defined.
  2. It must be accidental.
  3. It must be large enough to cause a hardship to the insured.
  4. It must belong to a homogeneous group of risks large enough to make losses predictable.
  5. It must not be subject to the same loss at the same time as a large number of other risks.
  6. The insurance company must be able to determine a reasonable cost for the insurance.
  7. The insurance company must be able to calculate the chance of loss.


A formal social device for reducing risk by transferring the risks of several individual entities to an insurer. The insurer agrees, for a consideration, to assume, to a specified extent, the losses suffered by the insured.

Insurance Commissioner

The head of a state's insurance regulatory agency in most jurisdictions. In some states the title of Director or Superintendent is used.

Insurance Company Education Directors Society (ICEDS)

An organization of insurance company educators whose primary purposes are to promote insurance education and exchange information on the subject.

Insurance Department

A governmental bureau in each state and the federal government in Canada charged with the administration of insurance laws, including the licensing of agents and insurers and their regulation and examination. In some jurisdictions the department is a division of another state department or bureau.

Insurance Examiner

The representative of a state insurance department assigned to participate in the official audit and examination of an insurer.

Insurance Guaranty Act

The legislation enacted in many states providing for guaranty funds for the policyholders of insolvent insurers.

Insurance Hall of Fame

An institution created to honor those who have made outstanding contributions to insurance thought and practice. Selections are made on an international basis.

Insurance Institute of America, Inc (IIA)

An organization which develops programs and conducts national examinations in Insurance, Risk Management, Management, Adjusting, Underwriting, Auditing, and Loss Control Management. Diplomas are given to recognize achievement in these areas.

Insurance Policy

The printed form which serves as the contract between an insurer and an insured.

Insurance Regulatory Information System (IRIS)

Information and early-warning system used by the National Association of Insurance Commissioners (NAIC) to keep track of the financial soundness of insurers.

Insurance to Value

Insurance written in an amount approximating the value of the property insured.


The party to an insurance arrangement whom the insurer agrees to indemnify for losses, provide benefits for, or render services to. This term is preferred to such terms as policyholder, policy owner, and assured.


The party to an insurance arrangement who undertakes to indemnify for losses, provide pecuniary benefits, or render services. It is desirable to use the word "insurer" in preference to "carrier" or "company" since it is a functional word applicable without ambiguity to all types of individuals or organizations performing the insurance function. The word insurer is generally used in statutory law.

Insuring Agreement (or Clause)

That portion of an insurance contract which states the perils insured against, the persons and/or property covered, their locations, and the period of the contract.

Interest Rate Risk

A risk faced by investors who invest in bonds characterized by an individual being locked into a lower interest rate when interest rates are generally increasing in the economy.


A third party in the design, negotiation, and administration of a reinsurance agreement. Intermediaries recommend to cedants the type and amount of reinsurance to be purchased and negotiate the placement of coverage with reinsurers.

International Insurance Seminars, Inc (IIS)

An institution established to promote worldwide exchanges of ideas and techniques between insurance people. The major focus of IIS is its annual seminar which brings together academicians and insurance practitioners.

Interstate Carrier

A transportation company which does business across state lines.

Investigative Consumer Report

A report ordered on an insured or applicant under which information about the person's character, reputation, or lifestyle is obtained through personal interviews with the person's neighbors, friends, associates or acquaintances. Contrast with Consumer Report.

Investment Company Act of 1940

A federal law which regulates the organization and activities of investment companies and requires the registration of investment companies with the federal government.

Investment Income

The return received by insurers from their investment portfolios, including interest, dividends, and realized capital gains on stocks. Realized capital gains means the profit realized on stocks that have actually been sold for more than their purchase price.

Investment Reserve

An item in the balance sheet of an insurance company which represents a setting aside of assets to compensate for a possible reduction in the market value of securities owned by the company.


A term used to identify a statement in a policy as to what is insured. In a Fire policy one might refer to the contents item, meaning the coverage in the policy which applies to the contents. An individual entry, such as a piece of jewelry, listed with its description and valuation on a schedule by a policy showing items covere.