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Insurance Glossary

The glossary contains the terms that you can come across in the description of insurance products or which are frequently used in the practice of insurance companies.
To find the meaning of a word, please select in the alphabet the first letter of the word you are looking for. 

 

The dictionary of terms of insurance
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Agent

An authorized physical person or a legal entity in charge to perform the instructions of or act otherwise on behalf of another person or entity (‘The Principal’) The agent usually acts on the basis of a proxy or power of attorney issued by the principal or on the ground of an agency agreement entered by and between the principal and the agent. The agency services are frequently used by insurance companies.

Insurant

1. A physical person or a legal entity with an insurable interest when such person or entity enters civil law relations with an insurer by law or a bilateral deal (contract); 2. Owner (holder) of an insurance policy.

Risk

A contingency that may occur, but not necessarily, and is outside control; an object of insurance; a type of the insurer’s liability.

Insured amount

A sum adequate in size to the insurable interest and insurable risk which is the amount of insurance of property, civil liability, life or health of the insurant. In international insurance practice, insured amount is referred to as insurance coverage.

Premium

The amount payable by the insurant to the insurer for accepting by the latter of the commitment to indemnify the policy holder respectively in the event of occurrence of an insured loss.

Insured event

An actualized risk which entails the insurer’s liability to make a payment of insurance indemnity from the insurance fund. The payment is usually preceded by a detailed investigation of the facts and circumstances of the insured event from the standpoint of its credibility and to eliminate intended action or inaction (actual malice) on the part of the insurant as may have resulted in destructive of harmful consequences.

Accident

An incident, explosion, catastrophe, motor vehicle accident resulting in the death, injury, casualty or damage of the insured object.

Reinsurant

An insurer who underwrites risks or assigns it in part to another insurer (reinsurer).

Broker

An intermediary between the insurer and the insurant (reinsurer and reinsurant) in the execution of insurance (reinsurance) contracts whose intermediary services are subject to the payment of a broker fee. A broker should have the expertise in legislation and insurance practices. It is believed that as a professional, a broker has to know all and everything about insurance and a broker’s knowledge shall be used to ensure best terms and conditions of insurance and insurance premiums for the principal. A broker is the insurant’s (reinsurant’s) agent, not of the insurer/reinsurer. The broker is not legally bound with any liability to the insurant (reinsurant). However, this does not mean there could be no moral liability. If a broker commits negligence in the performance of its functions which results in damages caused to the insurant (reinsurant), the latter is entitled to demand the settlement of the damages so incurred.

Insurer

A legal entity which provides insurance and in charge of creation and expenditure of the insurance fund. By the form of their organization, insurers can be joint-stock companies, benefit societies and state-funded insurance companies. In market economy, joint-stock insurers are the major type of insurance companies.

Updated:   2016-02-09 03:02

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In case of disparity between information presented in Armenian, Russian and English the Armenian variant is preferable.