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ACCREDITATION- If a state passes all the National Association of Insurance Commissioners (NAIC) model acts and otherwise passes the periodic examination of an insurance department’s policies, commercial insurers domiciled there will be acceptable security in other States.

ACTUARIAL REPORT- An analysis intended to project ultimate loss costs using probability theory and other methods of statistical analysis. Used to determine the adequacy of a property and casualty insurer’s statutory loss reserves and a life insurer’s unearned premium (technical) reserves. May be the basis of rate development.

ADMITTED COMPANY- A company licensed or authorized to do business in the state or country in which the company is authorized to sell insurance in.

AGENT - Individuals working for an insurer or an independent contractor selling insurance. Must be licensed in all states where the insurance is written.

AGGREGATE- The greatest amount recoverable under a policy or reinsurance agreement from all losses or a single loss incurred during the life of the contract.

AGGREGATE STOP LOSS - Reinsurance purchased for excess of an aggregate loss limit. Aggregate stop loss protection caps the annual aggregate loss.

ALTERNATIVE RISK TRANSFER (ART)- A method of financing risk outside of the commercial insurance regulatory system. This method is typically for the primitive buyer.

ASSOCIATION CAPTIVE - A captive insurer having more than two owners, typically members of an industry trade association. Sometimes the association itself is the owner of the captive.

ATTACHMENT POINT - The point at which the excess insurer or reinsurer starts paying losses on specific or aggregate stop loss basis.