NAIC Model Privacy Act
A model bill written by the
National Association of Insurance Commissioners and designed to set
standards for the collection, use, and disclosure of information gathered
for or by insurance institutions, agents, or insurance-support
organizations.
Top | Back
National Association of Insurance Commissioners (NAIC)
In the
United States, an association of state insurance commissioners designed to
promote consistent insurance regulation. Although the NAIC has no legal
power, the recommendations of the NAIC and the actions taken at its
semiannual meetings carry great weight with the individual state insurance
commissioners, the state legislatures, and the insurance industry. Similar
to the Canadian Council of Insurance Regulators in Canada.
Top | Back
National Association of Securities Dealers (NASD)
A voluntary
association of securities firms empowered by the Maloney Act of 1938 to
regulate the affairs of securities firms and to promote fair and ethical
practices in the securities business.
Top | Back
national brokerage houses
Large, independent firms that
specialize in providing risk management and employee benefits advice to
large, commercial clients.
Top | Back
National Organization of Life and Health Guaranty Associations
(NOLHGA)
In the United States, an organization supported by the
individual state guaranty associations which are its members. It serves as
a central source of information for the state associations and helps
resolve problems created by the insolvency of insurers that are licensed
in more than one state. See also guaranty association.
Top | Back
needs analysis
Part of the fact-finding stage in the personal
selling process; the process of developing a detailed personal and
financial picture of a prospect in order to evaluate his or her insurance
needs.
Top | Back
negotiated trusteeship
An agreement resulting from collective
bargaining (negotiation between a union and one or more employers) which
provides group insurance for the members of the union. Also called a
Taft-Hartley Trust.
Top | Back
net amount at risk
The death benefit of a life insurance
policy minus the policy's reserve at the end of the policy year.
Top | Back
net asset value
The value or purchase price of a share of
stock in a mutual fund.
Top | Back
net benefit premium
Under generally accepted accounting
principles (GAAP), the portion of the premium that funds the benefit
reserve. See net premium.
Top | Back
net cost
(1) In individual insurance, any one of several
different figures used to indicate the cost of an insurance policy. (2) In
group insurance, premiums less dividends.
Top | Back
net level premium reserve
The amount of liability that an
insurance company establishes for a policy. The net level premium reserve
is calculated using net level annual premiums.
Top | Back
net payment cost index
See interest-adjusted payment.
Top | Back
net premium
The amount of money needed to provide life
insurance benefits for a policy. The net premium is calculated by using
only an assumed interest rate and a tabular mortality rate. No loading for
expenses is added. The net premium equals a policy's gross premium minus
the policy's loading. Under statutory accounting, the net premium funds
the benefit reserve. See also gross premium, loading, net benefit premium,
tabular interest rate, and tabular mortality rate.
Top | Back
net single premium
The present value of the expected benefits
of an insurance policy. The net single premium is the amount of money that
would have to be collected at the time a policy is issued to assure that
there will be enough money to pay the death benefit of the policy,
assuming that interest is earned at the expected rate and that claims
occur at the expected rate.
Top | Back
no-evidence limit
In group insurance, the maximum amount for
which an insurance company will insure an individual without first
securing evidence of insurability. Also known as the guaranteed issue
limit.
Top | Back
no-load fund
A mutual fund in which the investor buys shares
directly from the fund and no sales commissions are paid.
Top | Back
nonadmitted assets
Those assets that cannot be included on
the balance sheet of a life insurance company's Annual Statement.
Top | Back
nonadmitted reinsurer
In the United States, a reinsurer who
is not licensed to accept reinsurance in a given jurisdiction. Contrast to
admitted reinsurer.
Top | Back
noncancellable and guaranteed renewable policy
An individual
health insurance policy that the insurer cannot terminate and for which
the premiums cannot be raised. See also cancellable policy, conditionally
renewable policy, guaranteed renewable policy, noncancellable policy, and
optionally renewable policy.
Top | Back
noncancellable policy
An individual health insurance policy
for which the premium cannot be raised by the insurer and which must be
renewed by the insurer until the insured reaches a specified age, provided
premiums are paid when due. See also cancellable policy, conditionally
renewable policy, guaranteed renewable policy, noncancellable and
guaranteed renewable policy, and optionally renewable policy.
Top | Back
noncontributory group insurance
A group insurance plan in
which the insureds pay no portion of the premium for their insurance. The
group policyholder pays the entire premium. If a group plan is
noncontributory, the enrollment of group members is automatic; all
eligible group members are covered. Contrast to contributory group
insurance.
Top | Back
noncontributory plan
A pension or employee-benefit plan in
which contributions are made entirely by the plan sponsor. Contrast with
contributory plan.
Top | Back
nonduplication of benefits
A method of coordinating medical
expense benefit payments between two insurance carriers that allows the
secondary carrier to pay the difference, if any, between the amount paid
by the primary plan and the amount that would have been payable by the
secondary plan had that plan been the primary plan.
Top | Back
nonelective contributions
In the United States, contributions
other than matching contributions made by an employer to an employee's
Section 401(k) plan (cash or deferred arrangement). The contributions are
made using employer funds and not through a reduction of the employee's
salary. See also elective contributions and matching contributions.
Top | Back
nonexclusive territory
Under the general agency system, a
territory in which more than one general agent may represent the same
insurer. Compare to exclusive territory and overlapping territory.
Top | Back
nonforfeiture factors
Special values, similar to annual
premiums, that some insurers use to calculate their policies' cash values.
Each insurer calculates its own nonforfeiture factor. In the United
States, the nonforfeiture factor can never be greater than the adjusted
premiums required by the Standard Nonforfeiture Law.
Top | Back
nonforfeiture options
The various ways in which a policyowner
may apply the cash value of a life insurance policy if the policy lapses.
See also automatic nonforfeiture option, automatic premium loan (APL),
cash surrender value option, extended term insurance option, and reduced
paid-up insurance option.
Top | Back
nonforfeiture values
The benefits, as printed in a life
insurance policy, that the insurer guarantees to the policyowner if the
policyowner stops paying premiums. These amounts may be used in a variety
of nonforfeiture options.
Top | Back
noninsured pension fund
A pension fund that is not funded by
insurance contracts.
Top | Back
nonmedical application
An application for insurance in which
the proposed insured is not required to undergo a medical examination.
However, a nonmedical application does contain questions that the proposed
insured must answer about his or her health. See also nonmedical
supplement.
Top | Back
nonmedical supplement
A report that describes the proposed
insured's health history. A nonmedical supplement is completed by the
agent based on information provided by the proposed insured and can serve
as part of a nonmedical application. Also called a nonmedical declaration.
See also nonmedical application.
Top | Back
nonparticipating policy
A type of life insurance policy or
annuity in which the policyowner does not receive policy dividends. Also
called a nonpar policy.
Top | Back
nonqualified annuity
A type of annuity in the United States
funded with money that has already been taxed by the federal government in
the year in which the funds are deposited.
Top | Back
nonqualified deferred-compensation plan
In the United States,
a retirement income plan that does not meet the requirements of the
Internal Revenue Service (IRS) for qualified plans. Although such plans do
not receive the tax advantages of qualified plans, they need not satisfy
the restrictive plan design requirements that qualified plans must
satisfy. Nonqualified plans are often used as a benefit for executives or
highly compensated employees.
Top | Back
nonresident license
A license authorizing an agent who
resides in another state to sell insurance in the licensing state.
Top | Back
nonretroactive disability benefits
A type of disability
benefit that is payable only for the period of disability that follows an
elimination period.
Top | Back
nonscheduled dental plan
A dental plan which pays benefits
for procedures based on the dentist's actual charges, as long as the
charges are usual, customary, and reasonable. See also combination dental
plan and scheduled dental plan.
Top | Back
nonsmoker risk class
An underwriting risk class that includes
people who are standard risks and who have not smoked cigarettes for a
specified period of time, usually 12 months, before applying for
insurance. People in the nonsmoker risk class pay lower than standard
premiums.
Top | Back
normal cost
The actuarially determined amount needed to fund
for one plan year the retirement benefits of a pension plan participant or
of a pension plan as a whole. A plan's normal cost is dependent on the
actuarial funding method and assumptions used by the plan.
Top | Back
normal retirement age
The earliest age at which a participant
in a pension plan can retire and receive the plan's specified benefit in
full. Usually age 65. See also early retirement age and late retirement
age.
Top | Back
notched option
A method of integrating private pension plans
with Canadian public pension plans. Under this option, a participant who
retires before age 65 receives a greater benefit from the private plan
until age 65 and a smaller benefit after 65, when the participant begins
to receive public pension payments. When both the public and private plan
benefits are considered, the participant receives the same combined
benefit payment before and after age 65. However, this benefit payment is
smaller than the payment the participant would have received had he or she
waited until reaching age 65 before beginning to receive benefits. The
notched benefit is designed so that the sponsor pays the same total
benefit as it would have if the amount of the private benefit payments had
been constant throughout. Compare to bridging supplement.
Top | Back
numerical rating system
A method of classifying risks in
which each medical and nonmedical factor is assigned a numerical value
based on its expected impact on mortality. See also credits and debits.
