Travelers 2004 Annual Report Download - page 55

Self-insured retentions .............. That portion of the risk retained by a person for its own account.
Servicing carrier ................... Aninsurance company that provides, for a fee, various services
including policy issuance, claims adjusting and customer service for
insureds in a reinsurance pool.
Specialty lines ..................... Thevarious kinds of specialized property and casualty insurance that
are written for businesses and professionals.
Statutory accounting practices (SAP) . . . The practices and procedures prescribed or permitted by domiciliary
state insurance regulatory authorities in the United States for
recording transactions and preparing financial statements. Statutory
accounting practices generally reflect a modified going concern basis
of accounting.
Statutory surplus ................... Asdetermined under SAP, the amount remaining after all liabilities,
including loss reserves, are subtracted from all admitted assets.
Admitted assets are assets of an insurer prescribed or permitted by a
state to be recognized on the statutory balance sheet. Statutory surplus
is also referred to as “surplus” or “surplus as regards policyholders”
for statutory accounting purposes.
Structured settlements ............... Periodic payments to an injured person or survivor for a determined
number of years or for life, typically in settlement of a claim under a
liability policy, usually funded through the purchase of an annuity.
Subrogation ....................... Aprinciple of law incorporated in insurance policies, which enables
an insurance company, after paying a claim under a policy, to recover
the amount of the loss from another who is legally liable for it.
Third-party liability ................. Aliability owed to a claimant (third party) who is not one of the two
parties to the insurance contract. Insured liability claims are referred
to as third-party claims.
Treaty reinsurance .................. Thereinsurance of a specified type or category of risks defined in a
reinsurance agreement (a “treaty”) between a primary insurer or other
reinsured and a reinsurer. Typically, in treaty reinsurance, the primary
insurer or reinsured is obligated to offer and the reinsurer is obligated
to accept a specified portion of all that type or category of risks
originally written by the primary insurer or reinsured.
Umbrella coverage ................. Aform of insurance protection against losses in excess of amounts
covered by other liability insurance policies or amounts not covered
by the usual liability policies.
Unassigned surplus ................. Theundistributed and unappropriated amount of statutory surplus.
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